Are Chief Innovation Officers Delivering Results?

Back in the mid-2000s, a new class of senior managers emerged at forward-thinking companies. Sometimes called chief innovation officers, or innovation catalysts, their job was to help their organization drive growth and transformation in a more systematic way. Companies including Humana, Whirlpool, GE, Coke, BBC, Shell and many others embraced the new position. And many others followed suit.

Before, most companies used vice president-level scientists to run disparate R&D outposts, and myriad marketers managed new product development. But the arrival of innovation czars represented a new approach to driving organic growth. The idea was to “put somebody in charge” who would lead innovation efforts. “A chief innovation officer needs to be a blend of marketer, technologist, strategist and businessperson,” observed BusinessWeek in a 2007 article.

Fast-forward almost a decade and you can’t help but wonder: how’s it going? Are these new-breed CIOs delivering the goods? To find out, I’ve been speaking with CIOs in the US, Europe, South America and Asia-Pacific. I’ve also been pouring over various innovation, trying to gain an objective pulse on what’s going on.

The good news: the funk and uncertainty of the Global Financial Crisis is mostly history, and innovation is definitely back on the agenda. Boston Consulting Group’s annual survey of 1500 executives finds that “76% of respondents ranked innovation as a ‘top three priority,’ while 40% ranked it as the top priority — the highest level since the survey began in 2004. And some research suggests that the CIO trend is again on the uptick. According to Cap Gemini’s 2012 global survey of 260 innovation executives, 43% say their companies have a formally accountable innovation executive, up from 33% the year before.

But are these idea czars proving effective in sustaining the new, more comprehensive approaches to innovation management?

In the giddy days of 2007, an Accenture study boldly concluded that “companies that have a single point of accountability for innovation report higher innovation performance and capabilities as compared with their peers at a ratio of 2:1.” And a 2012 Booz & Company study indicated that companies with “highly aligned innovation strategies and highly aligned cultures generate 30% higher enterprise value growth and 17% higher profit growth” than industry peers. Which begs the question: how do you obtain that vaunted state of strategy/culture alignment and what are the traits of CIOs who succeed in achieving that synergy?

The Cap Gemini survey suggests that they are facing stiff headwinds. “Only 24 percent of CIOs believe they have an ‘effective organizational alignment of innovation efforts’,” notes the survey. “The absence of a well-articulated innovation strategy is by far the most important constraint for companies to reach their innovation targets,” concludes Paddy Miller, professor of innovation at EISE Business School in Barcelona, and lead author of the report.

This is roughly the same level of satisfaction level as a Coopers & Lybrand study indicated 12 years ago.

In my own research, I find that today’s innovation managers are often newly appointed to the role, and the position newly created. They are often poorly trained, and surprisingly isolated from more experienced CIOs. Quite commonly, they have no network of other practitioners in other organizations to call upon when dealing with intractable challenges. Often, they are tasked with leading a multi-faceted, complex and evolving mission, for CEOs who are distant and uninvolved.

When they speak candidly, they will tell you how they get pushback both subtle and overt, and indifference from line managers and division heads. They are often tasked with delivering on a portfolio of projects, while also thinking ahead of the curve. Yet still, some are succeeding despite the odds.

The best ones bring new thinking to the table. They gain the ear of the CEO. They create strategic alliances and collaborate with customers. They embrace open innovation. They gain respect because they bring home the bacon.

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Robert B. Tucker is the President of The Innovation Resource Consulting Group. He is a speaker, seminar leader and an expert in the management of innovation and assisting companies in accelerating ideas to market.