A analysis with Google Trends on “Chief Innovation Officer” shows an increasing interest starting in 2010. The term was actually coined and described by Miller and Morris in 1998, but it seems to have only received interest in the past 4-5 years or so. While the Chief Innovation Officer’s function is becoming increasingly strategic, its description is still in its infancy and varies among companies. In the following we will see why the perimeter of the Chief Innovation Officer should be new territories. Not more. Not less.
This article is based on our book Innovation Intelligence (2015), written after interviewing dozens of Chief Innovation Officers and other C-level functions of large companies.
Chief Innovation Officer: a role in its infancy
The challenge for large companies is to be agile despite their size. A company is designed to have the best P&L. Therefore it is very good at incremental innovation. However, most of the time it sucks at disruptive innovation. The role of the CINO (Chief Innovation Officer) is to redefine what is possible for the company.
The role of the CINO is to drive innovation across the whole company, across the silos, across the functions, across the business units, across the geographical areas, and possibly beyond the company’s traditional borders. Ultimately, the CINO must ensure that innovation delivers business results. Because the CINO function is still emerging and every sector, company, and country is different, we do not pretend to provide here a detailed, comprehensive overview of all the functions of a Chief Innovation Officer. The following should not be taken as the grand truth on what a CINO should do in a company but rather as a common basis for the CINO role in most mature companies:
Role #1 – focus on business value: the purpose of the CINO is to identify disruptive threats and opportunities based on emerging trends. Innovation is business oriented, and so is the CINO. The CINO ensures that innovation initiatives are designed for business value creation. An innovation project should not be undertaken just because it is fashionable (nanotechnologies, drones, 3-D printing, and so forth). To ensure that innovation is focused on business value, the CINO is in charge of defining and monitoring the metrics of innovation performance.
Role #2 – defining language and changing culture: the first function of the CINO is to develop a culture of innovation in the company. To be able to create such a culture, the first key is language. A common language for innovation must be defined across the entire company. A shared language is essential, because it prevents potential conflicts, such as an employee asking, “What is the role the CINO? We already have a CTO.” In addition, once there is agreement on the definition of innovation (specifically, disruptive innovation), determining how to evaluate its performance becomes easier. Core-business innovation is generally a matter of executing the standard processes of the company, and adequate metrics already exist for measuring its performance. On the contrary, evaluating the performance of disruptive innovation, although it is driven by business, cannot be done with the traditional indicators. Once the common language has been agreed upon, another job of the CINO is communication. By communication, we mean both internal and external. Internal communication shapes the company culture. It is the only way to make the residents of the business silos aware that innovation can happen everywhere in the company. External communication can be a means to develop the innovative spirit of the company in such a way that it attracts creative talents and partners from horizons far away from the core business.
Role #3 – organize and leverage innovation-driven intelligence: based on innovation-driven intelligence, the CINO determines the company’s innovation strategy and aggressively manages the innovation portfolio. Knowledge is the CINO’s main key. The issue is that encyclopedic knowledge is no longer possible. The good old days of the Age of Enlightenment are over. Proliferating and dispersed, knowledge represents a real—unsolved—challenge for CINOs. An unsolved challenge, because the volume of information is enormous, and because this information is not only technological but rather begins with the unstated dreams of people. Creating an integrated synthesis of the required knowledge is the CINO’s key challenge. And yet, the CINO must also anticipate and build a long-term strategic vision for the company. Moreover, based on the knowledge and vision, the CINO must take actions.
Intelligence is not a new task. All companies have teams dedicated to technology watching, market analysis, trend analysis, and so forth. The main issue with this current approach is that traditional companies are built in silos, and these individual intelligence tasks are performed by various teams that hardly communicate with one another. Moreover, the people performing these tasks may not have a good understanding of what really matters for the company. Most importantly, these tasks are not synchronized, coordinated, or synthesized to focus on innovation. Intelligence-driven innovation should be concerned with both established knowledge on technologies, markets, and trends and new knowledge generated by the CINO who aims most of his or her actions to transforming assumptions into knowledge. You want to know more about innovation-driven intelligence? Shoot me an email.
Role #4 – fostering idea generation and rapid experimentation: ideas must be tested by rapid, small-scale experimentation that are used to convert assumptions into knowledge, from both a technical and business standpoint. Chief Innovation Officers are not themselves responsible for idea generation, but they are in charge of setting up an environment that fosters idea recognition and rapid experimentation. Such an environment includes the physical place but also the people, tools, and resources (see our upcoming articles on Innovation Labs). The innovation environment inside a company does not depend only on process and tools, but also—perhaps mainly—on people. Therefore, the CINO must cultivate the right talents. A CINO’s team tends to become increasingly multidisciplinary over time, incorporating not only engineers but also marketers, designers, and sociologists, among others. Managing learning is essential. The metrics to evaluate the Chief Innovation Officer’s performance should reflect this notion of creating new knowledge. What did the organization learn? How? How much? How fast? By how much was the original risk or uncertainty reduced? These are the types of questions that should be asked about a CINO’s performance.
Role #5 – bridging the gap between the innovators and the rest of the company: one the most difficult parts of the innovation process. New territories are explored by the CINO leveraging innovation-focused intelligence, ideation, and experimentation. Once a new viable business opportunity has been identified (the CINO having transformed assumptions into new knowledge) and proven both technologically feasible and desirable for users, the project should be transferred to a business unit. The question is how to transfer? The answer is not obvious. Should the project be hosted by an existing business unit? Should an ad hoc business unit be created? Should it be spun off? The choice of approach depends on the situation.
Chief Innovation Officer: multidisciplinary and closer to the CEO
Various studies show that the innovation function is rising in the hierarchy and is getting closer from strategy.
Trend #1: from just a few to thousands of CINOs. At the beginning of the 2000s, there were just a few dozen CINOs in the world. There are probably thousands today, in early 2015. The European Institute for Creative Strategies and Innovation, headed by Marc Giget, conducted an extensive survey of more than five hundred CINOs around the world to gain an understanding of how the function has evolved over the past few years. As of today, half of the large companies surveyed have established a CINO function. The role of the CINO is not yet uniform across companies and is still evolving.
Trend #2: the CINO and his team are becoming more and more cross-functional. The general trend we have observed is that the role (and the team) of the Chief Innovation Officer is becoming more and more multidisciplinary. These teams are transitioning from being a sample of the company to being a sample of the world.
Trend #3: the CINO is getting closer to the CEO. Proximity to the CEO allows the CINO to take a holistic approach across the organization. To be effective, the CINO needs strong support and a clear mandate from the CEO. Because the CINO’s role is to explore new territories, he or she must be able to be challenge silo residents and business as usual.
Chief Innovation Officer: a unicorn?
Because most traditional CEOs cannot assume the function of a Chief of Innovation, the CINO, with the CEO’s mandate, is a person who can apply multiple skills to a broad range of knowledge, knowledge of not only technology but also markets, finance, and so forth. The ideal CINO will know how to seek input from others, both within and outside the company. The CINO is convinced that innovation is a necessity. He or she believes in innovation and is not risk-averse. The CINO is not necessarily a creative person or an innovator. Although many CINOs have a technological bias (although a growing proportion of CINOs are coming from digital, management, and strategy), the ideal CINO combines traits which are very seldom embodied in a single person:
Trait #1 – business understanding. The CINO has a good business understanding, which enables him or her to combine long-term strategic planning and short-term tactical operations. The CINO must have a thorough understanding of the company’s competitive position.
Trait #2 – technological wisdom. The CINO must have a sufficient level of understanding of technologies as enablers of new products and services. Although not necessarily a specialist, he or she should be able to listen to and challenge technical people.
Trait #3 – communicative leadership. The CINO must bridge the gaps among other C-level executives at the speed of light. The CINO is not the only leader but rather is able to bring other functions on board and invite them to contribute to in-house cross-fertilization. Even if the CINO is a born leader and a genius in communication, this can requires the support of the CEO.
Trait #4 – client-centric experimentation. Since innovations must be tested as quickly as possible on users or clients. The CINO has therefore a strong taste for experimentation. He should have a natural empathy for the final user problems and be able to focus all his experimentation on this point.
Trait #5 – ability to connect small worlds. The CINO must be able to bridge disparate areas of knowledge. To do that, the CINO must have a large active network comprised of small worlds and be able to connect the dots.
Steve Jobs had probably all of these qualities, but he was also a very difficult person to work with.
What do you think the role of the CINO should be?