Ten years ago, you’d have been hard-pressed to find a chief innovation officer on any company’s leadership team. Today such leading companies as AMD, Citigroup, Coca Cola, DuPont, Humana, and Owens Corning each have one. Many others, including Johnson & Johnson, have senior leaders who are tasked with heading innovation in effect, if not in name. Not that innovation is new: Organizations have been innovating as long as companies have existed. Why the new role now? There are many reasons. Three stand out.
- First, the across-the-board digital revolution that began in the early 1980s intensified greatly in the dot-com era of the 1990s, during which the rate and scale of disruption brought about by innovation was massively accelerated. In 1958, the average length of time a company remained on the Standard & Poor’s 500-stock index was 57 years. By 1983 it had dropped to 30 years. In 2008, it was just 18.
- Second, companies have increasingly come to understand the commercial potential of sustainability innovations to reinvigorate mature industries and create entirely new ones. GE’s commitment to “Ecomagination” only begins to suggest how thoroughly sustainability has entered the commercial mainstream and raised innovation to a strategic imperative.
- Third, we now have a much better understanding of the dynamics of innovation, as well as the scale of the threats and opportunities it presents, thanks to investigators and practitioners such as Clayton Christensen of Harvard Business School (a co-founder and board member of Innosight, whose seminal work on disruptive innovation has not only gained wide currency, but also been tested in numerous ventures. As a result, companies understand better how to manage innovation—and why they must do so at the highest levels of leadership.
Because the CIO position is relatively new, its precise contours are still emerging. While each company is different and the role of innovation will necessarily vary from company to company and industry to industry, there are three critical areas of innovation for which all top innovation executives should take responsibility: language, learning, and long-term structure.
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