Innovation is not something new. It has always been companies' everyday challenge to adapt and to innovate, to reach more and more customers and gain a competitive advantage. But today, with the explosion of the web and the growing globalization, competition has never been so high. So even if, innovation was useful in the past, today it has become critical for companies to survive. This acceleration of revolutions in business those last years led to the creation of a new position in the corporate structure: the chief innovation officer (CIO). Let's see what this position implies (qualities, missions…) and why companies should have one CIO.
What is a CIO?
Qualities and place of a CIO
As mentioned in the introduction, business is a motor for innovation and so is innovation for business. All the departments of a group are involved in the innovation process, so it cannot be considered as functional, but definitely as a strategic issue. It is not only developing new products, but it is also transforming the organization, in order to be more efficient at each level (from the purchase of raw materials, to the sale in the market). The CIO has to be in the middle of that change. That person needs to have essential strengths.
Business skills
Of course, he must have business skills: Indeed he should have a deep understanding of business processes in many industries, which imply experiences all over the world. Then, the culture of company has to be perfectly clear for him if he wants that everybody understand him. Furthermore, he has to know how to make perfectly clear accountabilities and deliverables. Finally he must be charismatic, and visible in the company.
"People skills"
On the other hand, his attitude has to fit with his job. It means that he must have an analytical spirit, to analyze evolutions, and opportunities. He also has a team spirit, and acts as leader. As he has a transversal position, it is necessary that he considers people for who they are, and not only as commodities. Finally, he needs entrepreneurial skills, in the way of being a pioneer.
Innovation skills
The last strengths he needs are more related to innovation. Indeed, an inventor spirit is definitely required. It means that he must not limit himself to what he already knows, but be ready to learn new things, to adapt to new situations. Then he has to be able to bring new ideas, and more, to recognize the good ideas generating by other people inside or outside the company. The last but not least requirement is the ability to speak as well technologic language as a business one, so as to be understood by engineers and marketing or sales persons. The HTC CIO works on that way, actually, he met the team in charge of the antenna every week for an hour, during a few month to understand the basis of the technology, and to be able ask "stupid" questions to the employees.
Place in the company
The chief innovation officer is going to use all these strengths in the corporate innovation system, which links the leadership to the strategic alignment, to the organization & people, to metrics, and all of three with processes. If a new product is launch, or a new process is adopted, it will influences all the system, and the chief innovation officer has to make sure that everything is going to change in the same way, keeping the company culture.
One of his biggest challenges (and that's why he will need the skills mentioned before), will be that all the employees accept the change. According to the prince Nicolo Machiavelli: "There is nothing more difficult to take in hand, more perilous to conduct, or more uncertain its success, than to take the lead in the introduction of a new order of things, because the innovator has for enemies all those who have done well under the old conditions, and lukewarm defenders in those who may do well under the new"
After having determined all the qualities of the chief innovation officer, let us focus on his tasks.
Missions of a CIO
The chief innovation officer is in charge of the innovation strategy in the company. He has to report directly to the CEO. We could say that he is a kind of assistant to the CEO in order to achieve growth goals.
According to Accenture consulting group, "Innovation is a top priority for companies seeking to increase their revenues, but they usually get a poor return on their investment because of flaws in managing it, such as not having a single executive in charge".
First, the CIO has to identify the sources and drivers of innovation, and then apply innovation not only in one dimension, but in all possible within the company. It includes innovation in products, in processes, in business models, in the company culture, but also in the position on markets.
Applying a common language
In the company we can admit that the CIO is the liaison for business and technology to come together and align their strategies. So, the first task a CIO should implement is to oversee a responsible for executive training which will make sure that everyone, in the group, understand the innovation language (innovation methods and tools), and the principles of it. This language and principles have to be disseminated and practiced in the whole company in order to be part of the corporate culture.
To illustrate that, I can take the example of the Manhattan project. The aim was to create the first atomic bombs during World War 2. This innovative project was led by two persons: an army officer called General Groves, and a physicist R. Oppenheimer. On the first hand, General Groves who understood the army protocol was in charge of administrating the project. On the other hand, Oppenheimer (who had the knowledge) directed the work. The CIO would be more like Oppenheimer, and the responsible for executive training more like General Groves.
The CIO: a point of entry for strategy and innovation
One of the biggest tasks of the CIO is to do a continuous survey. It means that he should try to be aware of all what happens in terms of technological innovation, demographic and lifestyle changes, company environment and so on. He also has to take into consideration what is happening inside, and to regard the employees' ideas. Horace Luke, HTC CIO tells:
"I bring people to my office for three things, one-on-one meetings, to resolve problems between different teams, and the third is therapy where people can come and talk to me. I am always there to listen. My office is very much a think hub".
He has to do that, because innovation can come from everywhere.
The CIO: Defender of breakthrough innovation and architect of the corporate infrastructure
After having done that, the CIO can focus in the different dimensions mentioned earlier, such as products. All products have a life cycle. To increase that life cycle, the CIO can work in the way of doing incremental innovation on products (e.g. Add new functionalities in cars). On the other hand, he can decide, with the agreement of the executives to work in the way of creating radical or disruptive innovation. That will also change the structure of the company (Ambidextrous organizations, merger, acquisition…).
If the chief innovation officer manages to improve the deliberate process, to install a creative climate in the company, and to increase the inclusive leadership, the company will be more and more creative and innovative. That can lead to a better performance, and to be more profitable.
The CIO: maintainer of innovation process
The goal of most companies is to pass the productivity frontier of Mr Porter, to have a better competitive advantage and more added value. The way to do that can be to innovate, notably in process. Actually, returns from process innovation are typically four times those from product innovation. That is why; this is where the CIO has to focus, identifying resources and opportunities.
The productivity frontier (Porter)
The CIO: Source of new markets
Furthermore, the CIO also has to focus on how to adapt, how to reach the market, and which market. Of course he has to work with the marketing department and others. But he should take into consideration the technology adoption lifecycle of Moore. Indeed, if a new product is launched but it does not find any buyer, it is going to be useless. It makes part of his job to find a way to reach first innovators, and early adopters, but also to pass "the chasm", and reach early majority.
To summarize, the CIO has a lot of and very diversify responsibilities. But only a few companies have someone in this position today. Could it be useful for the other to recruit one?
Why a CIO?
Since a few years, companies such as AMD, Citigroup, Coca-Cola , DuPont, Humana, and Owens Corning have recruited a chief innovation officer. They think that it is crucial for their efficiency. Even if they are examples of huge companies, the CIO could also be an asset for smaller companies.
Current tendency
First we have to know that 60% of R&D projects are market failures. That low rate of success could be improving thanks to a better and different management. When we see the figures bellow we understand how it is critical for companies today to improve their innovative process. Of course, they understood that innovation was critical, but they still do not know how to manage it. The result is that the all industry innovation initiative success rate is equal to 4,5%. The CIO could allow them to save a lot money and time.
The increasing competition
As mentioned in the introduction, competition has never been so high in all the sectors. The following bar graph shows the evolution of the number of patents per year. It discloses that companies register more and more patents. It means that the number of innovation never stop to increase. So the more competition there is, the more innovative companies are. To manage this increasing number of innovations, a CIO could be decisive not to waste time, and to take the best of it.
Evolution of the patents issued per year
Mozilla CIO agrees with that statement, according to him, competition is really good for innovation, and that a market without competition can stay in stagnation for many years. He mentioned the competition with Google, Apple, and all the Internet Browsers and he said that thanks to them he everyday has some new ideas, which allow the company to grow and to be more efficient.
The HTC CIO uses the comparison of the smartphones 10 years ago, now, and how they could be in ten years. He mentions the acceleration of the innovation process, and the crucial role of the person who leads and manages it.
Conclusion
To conclude, because of the innovation process acceleration and the competition concentration, the position of CIO has become more important and central for companies. Even if it is a strategic position, it is still a new one (approximately 10 years ago), and the interpretation of its tasks and place could differ between companies. It is obvious that innovation has to be managing in a better way today. So the CIO could be the key success if companies give to him the resources he needs.
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