From Product Development Manager to Chief Innovation Officer

By: Idris Mootee

Do large companies need a Chief Innovation Officer? First they need to think more clearly about the range of issues they can innovate their way through and those that they cannot.

The Need

Increasing regulations, management systems, business processes and efficiency initiatives in organizations are becoming less flexible than their knowledge and resources. That means every organization needs to create new organizational space to facilitate product, service and experience innovation on a global scale.

Often organizations duck the innovation imperative with specious arguments – I can’t innovate because I am in a regulated industry. The answer is you have to innovate because of that, and because so many of your management systems are inflexible and uninspiring.

The process of innovation in corporations can also benefit from the 24 hour open innovation network, which essentially opens ideation to wide beyond the product development function.

Life gets more complicated when a product opportunity spans across industries and where businesses unite. The line between product development and corporate intrapreneurship blurs, the mission is no longer about conceptualization and prototyping of a product, it is about forging a new value creation strategy.

Responsibilities

In that case, where should each of the product innovation efforts reside? What other mission critical yet hygienic activities to aid the idea to commercialization, such as marketing feasibility and user research and process and prototype testing, can be distributed cross-functionally and globally and made available to the team a lot faster than it has been possible, in the past?

Then the question of who owns innovation does becomes tricky to answer. Where does it “sit” and “report into” in regards to the organizational structure? This is probably one of most common unsolved problems facing organizations that are setting up innovation departments or initiatives.

Is there is need for a Chief Innovation Officer?

Someone in a large organization needs to be in charge of identifying industry breakpoints, spotting breakthrough opportunities, and needs to be provided with the resource to do that.

This is different from R&D. Take Intel as an example. It spends billions of dollars on R&D, most of which goes on projects to execute roadmap technologies. Only a small amount is dedicated to scanning for weak signals and identifying blind spots. Large successful organizations are particularly at risk of failure due to their lack of ability to read weak signals and see what’s coming.

How many chiefs do we need?

If this is the role of a Chief Innovation Officer, how does that role overlap with a Chief Strategy Officer? How many chiefs do we need?

The chief innovation officer will need the active support of the CMO, CFO, the CMO, and the CSO. The people who are executive roles in those positions in large established multinationals are typically risk averse.

And innovation is risky because there is no way to know what works. The only thing for sure is if they don’t innovate, the cost will be very high. Even the CFO understands this well, it is hard for him or her to put the logic around approving requests for funding.

Then the other question would be if the chief innovation officer does not win budget to launch and test products or equip themselves with some capability to productize their ideas, then their jobs would be limited to coming out with cool ideas and keeping their fingers crossed in the hope they will get an opportunity to productize them.

There is also a huge risk to transferring the ideas early in the process before investments have been made in prototypes and insights, in other words at the stage where learning still needs to be maximized.

For many organizations that are not ready for radical innovation, incremental innovation needs to be institutionalized. Meaning it needs to be very close if not also part of a business unit that owns a P&L. There is no single right or wrong answer to these questions.

Less than 2% have a senior dedicated executive as chief innovation officer.

Our recent survey of 200 large organizations indicates that currently only 7% have dedicated innovation teams, 21% have innovation related titled people in their marketing department, 22% have innovation functions embedded with R&D and 16% have innovation function as part of product development. 33% of respondents acknowledged that they do have any innovation function or team. Less than 2% have a senior dedicated executive (VP level of above) as chief innovation officer.

It does not matter what we title the person, organizations need a role model who acts as the guardian of innovation within the company, ensuring the exploration and activation are aligned with the organization’s strategic goals and constantly looking at the desired futures.

The job also includes designing and defining the right innovation methodology so they are applied uniformly, and ensuring that the organization’s resources are made available to do so. They are the manager of the organization’s collective imagination, the change maker and head of the special forces. When you take into account the natural resistance to change in organizations and the many arguments senior level people will produce for not acting or investing then the Chief Innovation Officer looks more and more a necessity.

By Idris Mootee