Organizing for Corporate Innovation. One Size Does Not Fit All!

Innovation takes many forms across the enterprise: Chief Innovation Officers, centers of excellence, specialized innovation functions that work between business units. As more companies grow specialized C-level posts, you’ll see these roles proliferate. But do companies need them?

In reality, what you call innovation doesn’t matter too much as long as leaders make it a company-wide priority with clear accountability for success.

I hold two seemingly conflicting thoughts on innovation. First, I advocate constantly for the C-Suite to champion innovation and deploying change agents through the business to guide execution. Yet, I’ll also be the first to say companies don’t necessarily need a Chief Innovation Officer (although it does make sense at times).

While innovation must align with the CEO, the actual function of innovation must be the change catalyst to advance the strategy of the company as it drives profitable growth. The titles and names don’t matter; success lies in shaping organizational behaviors, bending the proper boundaries and empowering the company to disrupt markets and grow profitably.

Don’t get me wrong, what you call something makes a difference and many companies absolutely benefit from a Chief Innovation Officer, but executives must consider where the company sits in its innovation maturity cycle and back it up with deliverables that make a difference.

No Innovator Is An Island

One factor kills innovation functions quicker than any other: isolation. No matter the good intentions of senior leadership it launched with, innovation functions die when its the tasks are isolated from the strategy or reality of the company. Autonomy certainly allows innovators to develop solutions free from the pressures of quarterly results, but we walk a fine line between avoiding distraction and becoming irrelevant through disconnection. 

Without accountability or connection to the broader business strategy, an innovation function will rapidly lose credibility and purpose, potentially causing more harm to innovation goals than good. Either way, innovation strategies should align with CEO priorities alongside the realities of each business, purposefully advancing strategy across disciplines. Not only does this empower employees to innovate at every level, it enables a broader culture of creativity and problem-solving throughout the company. 

Roadmap for Innovation

As you organize your company for innovation, you need to think about the following:

Purpose

Is this a purposeful priority of the board and CEO, enabling the strategy of the company? This may seem like a no-brainer, but companies go through phases of the innovation lifecycle as priorities shift among senior management. Profitable growth should always be a priority, but perhaps your company needs to invest in compliance issues or has a significant focus on cost reduction. While I will always argue for focusing on future growth and market needs, it will impact where and how you focus innovation activities.

Impact

The innovation function needs to be cross-functional in its impact and influence. This gets to the critical question of who “owns” innovation in a company. Although it takes time – and innovation functions or executives can lead this charge – innovation needs to be part of the DNA of the company, embedded in its culture. Ultimately, the operating units “own” innovation in that the results of your innovation activities will ultimately translate to growth and profits across the business units. 

As companies work toward growth, an innovation process-owner can serve as a forward-thinking catalyst to counter the short-term demands of the organization. For this reason, the innovation “leader” may have a staff focused on advancing the long-term growth activities of the company, paired with the access and influence they need to influence all functions and business units.

Culture

Cross-functional ability requires an innovation leader who can create cultural change in the company. If I were to ask who is the C-level executive in charge of innovation, would you have a clear answer? CMO, CTO, Head of Strategy?

Whatever the title, companies need a champion who can influence culture and strategic priorities at the highest level. Tech-driven companies might choose a CTO to get ahead of emerging trends. Others might empower a design-thinking CMO who acts as the voice of the customer and the market in the boardroom. The answer depends on how the company structures its roles and holds executives accountable for innovation.

Process

Identifying the innovation leader and function also gets to the question of who owns the process of innovation? Leaders commonly think of an innovation function only as R&D or an idea incubator. While possibly correct, it should only scratch the surface of a high-impact innovation function. 

While the lab may incubate ideas, the function should also pioneer processes and metrics that foster innovation into the organization while being a catalyst to fuel new growth tangents. To sustain innovation beyond a single idea, companies must commit resources and clearly define roles to sustain the process of growth and innovation.

When To Empower a Chief Innovator

The need for a Chief Innovator varies within each company, but it boils down to this: is innovation a one-off marketing stunt or inherent to long-term success? If it’s the latter, an innovation champion should be part of the CEO’s leadership team.

Putting an officer – a CMO, CTO, CIO, anyone – at the forefront of driving cultural change in your company sends a strong message to your employees and the market that you are serious about innovation. I find that message fails only when companies do not give that innovation executive and their department the authority, influence, and resources to make an impact and get work done. Without that, it will just be an empty token and potentially do more harm than good. 

This is why you see great success in companies that empower the CMO or Chief Strategy Officer with innovation. By definition, these leaders bring a customer focus and long-term perspective to the company which should be the catalyst for innovation. They, like CTOs who also have success leading innovation, also have the budgets and access to work across disciplines and silos. In many cases, these executives will have an innovation leader and function within their organization. This is critical as innovation is a full-time endeavor and is destined to fail if it is not the primary focus of the designated team. With the innovation team sitting next to marketer, strategists and other key stakeholders within their function, it allows the company to move in the same direction efficiently in its pursuit of strategic growth.

I have also seen great success with some companies that have a dedicated innovation executive reporting directly to the CEO. As mentioned before, it may be to send a clear message to employees and the market. It may also be to not distract other functions from core operating activities and have the innovation function focus on more disruptive and non-core strategic innovation that does not fit within the core business. With the support of the CEO and the ability to have the right talent and resources, this is also a great approach for the right company at the right time.

The labels and location of an enterprise innovation function matter, but its organization and level of influence make the difference. Equipped with CEO alignment, visibility across the company, cross-functional purpose, and the resources to create change, innovators can make real impact in the organization. With all this in place, you will focus more on the results of innovation instead of what you call it.

This article was originally published on Enterprise Innovation, a leading publication for corporate innovation profiles, news and guidance.