ie. White Paper Rise of the Chief Innovation Officer An Executive Whose Time has Come Contents Executive Summary | 1 Introduction | 2 What Is The Role Of A Chief Innovation Officer? | 3 Why Are Companies Now Appointing Chief Innovation Officers | 4 Which Companies And Industries Are Using Chief Innovation Officers? | 7 Difficulties With The Spread Of The Chief Innovation Officer Role | 8 Key Takeaways | 10 The Rise of the Chief Innovation Officer Executive Summary Innovation is a legitimate and vital business by the Chief Innovation Officer, who identifies process that is essential for companies areas where change is necessary. looking to evolve at a pace that elevates them above the competition. The Chief Innovation Officer has to be multi- skilled and comfortable in a number of Due to the complexity of innovation, there has situations and understand that innovation is to be the infrastructure and business direction essential to solving organizational problems. in place to ensure that innovation can prosper smoothly. This infrastructure is put in place In this whitepaper we will discuss: • If the Chief Innovation Officer is an important catalyst to ensure that innovation can come from anywhere in the organization, not just the top of the hierarchy. What delivery methods could be considered as an alternative to the current outreach. • Whether a creative environment is a pre-requisite for innovation and the necessity of valuing innovation as an effective way of reforming the organization. • The evolving definition of the Chief Innovation Officer. We will also evaluate the key roles of the Chief Innovation Officer and how they impact organizational processes on a daily basis. • How the Chief Innovation Officer is now a necessity and what competitive advantages they bring to the organization. Through the examination of the points above, this research will look at the role of the Chief Innovation Officer and how it is changing approaches to innovation and the wider implications this has to companies. 1 The Rise of the Chief Innovation Officer Introduction ‘Innovation is now seen as a vital cog in the ways that companies grow, with many claiming that it is the single most important way for companies to expand today’ Chief Innovation Officers (CINOs) are now found in companies all over the world, bringing new ideas and creating new cultures. The role is not formally established across industries, meaning that the specific tasks of any CINO can vary considerably from company to company. The role has a wide remit and can include anything from improving communication channels to promoting entrepreneurism at all levels. Due to the lack of a formal and defined set of roles and responsibilities for CINOs, other processes are often included in the role, such as marketing, IT or sales. Much of this is dependent on the career history of the individual. Innovation is now seen as a vital cog in the ways that companies grow, with many claiming that it is the single most important way for companies to expand today. 3 It is for this reason that the creation of a formal position focused around innovation has become a priority for business leaders. This whitepaper aims to discuss the rise of the role in the boardroom, as well as investigate factors that are currently slowing the pace of hires for this position. We will look at which companies are utilizing the position the most and why the role is increasing in popularity. 2 The Rise of the Chief Innovation Officer What is the Role of a Chief Innovation Officer? The role of Chief Innovation Officer is relatively new and due to this, many are establishing An important role for the Chief what duties the position should include. The Innovation Officer is also to make sure role generally sits within the C-Suite, often that the ideas that come through the reporting to the Chief Executive Officer (CEO) company are not purely to create and Chief Marketing Officer (CMO). This allows a new process but that they have the CINO to have a holistic approach across commercial value. 4 the organization, creating processes and best practices throughout almost every department This is a vital aspect of the role and one of the and division. founding pillars of why this is now a position often required in companies - as ideas are The duties of a CINO are non-formalized brought forward the evaluation process needs across companies due to many who hold the to be both thorough and fast, meaning that an position being the first to do so. This situation established role needs to be created in order means that many CINOs will be establishing to take full advantage of potential innovations. the duties as they go and adopting new responsibilities as situations occur throughout their tenure. Some CINOs see the role as taking another 5 to 10 years to either formalize across industries or develop into something different. 1 The role normally constitutes the creation of processes which allow new ideas and innovations within the company to be quickly reviewed and either implemented or rejected. The purpose of this is to allow companies to incubate new practices or products to gain market prominence or maintain performance. Often an idea needs to be implemented quickly in order to have maximum impact and one of the CINO’s key roles is making this process as fast as possible. Innovations and changes can often represent risk, especially with disruptive technologies or practices that change the core functions of a company. A primary role for CINOs is minimizing the risks involved with innovating or making the transitions between old and new processes as smooth as possible, allowing for transfer with minimum disruption to the functions of the company. 3 The Rise of the Chief Innovation Officer Why Are Companies Now Appointing CINOs ‘If innovators didn’t establish new ideas and game changing technologies, there would never have been any successful companies or technological advances’ The importance of innovation has always been obvious: if innovators didn’t establish new ideas and game changing technologies, there would never have been any successful companies or technological advances. However, it is only within the past few years that we have seen the formalized role of CINO, or similar, become moew prevalent in companies. Indeed 70% of executives have now listed innovation within their top five priorities and 18% as their most important. 4 There are several reasons for this: Allows For Real Game of their primary role) produced both Gmail Changing and AdSense, two of the company’s most profitable divisions.3 Due to the unpredictability of worldwide economies and the huge costs that mistakes CINOs allow for this process of can have, there is a real need to support formalization to occur smoothly game changing ideas. A recent Accenture and have the expertise to create report found that companies have become avenues in which innovations can be more conservative with innovations, making communicated and implemented. incremental changes that may extend a line or make small changes to an existing product.4 The gains from these kind of innovations are Quick Evaluation often negligible and do not typically break new ground, meaning that progress and One of the major business developments advancements are slower, resulting in smaller of the past decade has been an increase overall business results. in the speed of change. With the rise of global connectivity, the pace that companies A formalized system of innovation is needed need to implement changes has increased to allow for pipelines to be created where real exponentially. This speed, combined with the ideation can be supported both professionally necessity to produce business results from and financially.4 A prime example of this is new ideas, has meant that established roles Google, where this process of innovation (at to both evaluate and implement new ideas one point their employees could take 20% of have become vital. all working time to work on projects outside 4 The Rise of the Chief Innovation Officer This responsibility falls on the CINO and ideas. However, only 20% believed that their represents a key element in the overall company delivers.3 Bridging this gap through business impact of new innovations. The the hiring of a CINO means that employees success of a new idea or product often feel more empowered and supported in their comes down to timing and whether it can new entrepreneurial endeavors within the be implemented before a competitor. Due company. to this, many companies have found that without proper evaluation, new ideas can have The failure to effectively support these negative effects on the company. entrepreneurial activities can see companies losing some of their most promising A CINO sits in a position employees. The survey found that that allows them to quickly 93% of those who had started evaluate new ideas and their own company had pursued make decisions about an entrepreneurial idea at their whether to support previous company. 57% of these them. had found their previous company had not been very supportive or not Previously this kind of at all supportive and 30% had started work would fall to a their own company to have the freedom to senior executive who had pursue their ideas without having to focus on additional responsibilities, other subjects. 3 meaning that, if speed was required, the evaluation process If a CINO can foster a culture where these would not be as thorough. If it needed to be projects can be undertaken within a company, extensively evaluated, it would take longer. there would be an increased chance of keeping their most passionate and forward thinking employees. Promote Group Thinking and Employee Support Increase Inclusivity The Accenture survey indicated that 60% 53% believe that their company did not of respondents believed that the best support ideas from all levels of the workforce,3 ideas come from a collaborative effort, 3 which implies that leadership restricts its meaning that creating environments in which innovations to business decision makers employees can work together is an important alone.