A chief innovation officer (CIO) evaluates internal systems and external opportunities for ways that a corporation can increase profitability by implementing new ideas and by operating in unexpected ways. Although the concept of innovation has long been part of the corporate lexicon, the inclusion of a CIO position at the executive level demonstrates an increased commitment to operating at the forefront of the industry in a leadership role. A CIO designs a strategy to recognize and explore opportunities and provides the evaluative expertise to manage the risk of being a forerunner against the potential gain.
The chief innovation officer position was developed in response to the technology revolution that shepherded in the 21st century and changed so much of the business-to-consumer landscape. Innovation has always been a goal in the corporate playbook. No company wants its products or operations to seem stagnant or outdated. Globalization of markets through the widespread use of the Internet, the increase in untapped opportunities driven by technological advances and the change in the marketing paradigm as a result of increased two-way customer interaction has lent a new urgency to corporate innovation. Many companies have decided that the best way to embrace the requirements of the perceived 21st-century mandate to “innovate or die” is to task someone to specifically drive the process.
In the old context, corporate innovation was largely functional. It focused on incremental improvements in brand strategy or operations, or it focused on spotting industry breakpoints or breakthrough opportunities. Those tasks are still relevant to the chief innovation officer, but the more relevant aspects of the job involve designing a corporate culture of innovation that is sufficient to keep the company in a leadership position through rapid changes in the marketplace. The CIO works with employees to define and implement an innovative work methodology that provides an outlet for individual creativity.
More importantly, the chief innovation officer has more of a responsibility to look outward for opportunities for innovation. The CIO develops strategies to innovate around the Internet, social media and sustainability, three of the driving forces behind digital globalization. Whereas production and operations were the key focus of corporate innovation in the past, marketing has become the canvas for innovative approaches as the barriers between businesses and consumers around the world fall away.
As crucial as it is for a corporation to internalize innovation and to identify new opportunities, no company can afford to chase new opportunities indiscriminately. A chief innovation officer applies expert analysis and professional judgment to opportunities, assessing the risks versus the rewards. The position has a significant strategic planning component because the CIO is a key voice in determining the company's direction.