In the post-2008 world, we are seeing the emergence of C-level executives responsible for corporate venturing and innovation strategy, implementation and operations as a mainstream activity.
Although accountability for corporate innovation and its performance can be found under a variety of executive management titles in the C-suite, such as chief strategy officer, chief technology officer, chief development officer, chief financialofficer and, of course, chief executive, there are now increasing numbers of dedicated next generation chief innovation officers (CIOs) running operations with specialised skills, teams, governance and performance and value delivery goals.
The primary forces coming together for this new, dedicated “CIO with operating teeth” position are both corporate-wide and externally-oriented: there is less time to demonstrate first results of the corporate venturing and innovation programme.
Corporate ‘patience’ on innovation heads, given pressure to perform and grow, is now less than three years.
Companies are trying to balance their unique advantages of global scale and market power with the realisation that no one can do innovation alone.
In order to succeed in the post 2008 world, global corporations must hone new types of “give-to-get” outreach and partnering skills. They must also understand and, in many cases, re-evaluate the corporation’s traditional approach to intellectual property.
And, for maximum impact and sustainability, innovation executives must be able to integrate and make systematic all the ‘flavours’ of corporate innovation, including corporate venture capital, incubation, commercial piloting and innovation partnering, while balancing the innovation portfolio to meet corporate financialand strategic goals and timetable.
Future direction
We see the formation of a corporate venturing and innovation (CV&I) unit under a CIO and specifically chartered and managed as a profit and loss (P&L) centre.
Ultimately, innovation must be chartered and managed in alignment with the rest of the business, which, in its simplest terms, means as a P&L table.
The impact of innovation (both cost and return) must be clear within the operating framework of the company. P&L responsibility and revenue production is the language of the mainstream organisation.
But as CV&I units become a mainstream contributor to strategy for corporate growth, they must be run as a portfolio, with a strategic plan to deliver early performance (within the first 2.5 to three years) as evidence of its portfolio power.
This is the ultimate path to sustainable legitimacy within the corporation.
This requires extending the unit’s charter to an end-to-end integrated corporate venturing and innovation portfolio strategy covering management and operational integration with operating control and revenue/P&L rec-ognition based on credit for innovation-based mergers and acquisitions, other partnerships and spin-in and spin-out exits, such embedding in established businesses, joint ventures or trade sales/flotations.
The CIO has to be an important member of the management team, and must operate and be measured commensurately.
This is also why having a dedicated CIO with the specialized skills and chartered with operational ‘teeth’ is an indicator that corporate venturing and innovation is finally becoming a worthy and attractive career path in and of itself.