Organizations around the world define themselves as innovative, but very few really understand the meaning of innovation, and far fewer have a specific plan to achieve it. If you are working on innovation, you need to know the figure of the Chief Innovation Officer . We will tell you!
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What is the Chief Innovation Officer?
An innovative company is one that has the ability to create with an impact on the market . When we speak of “creating” we refer to developing new products or internal processes in the organization. On the other hand, having an impact on the market means that we are able to monetize innovation because it has a value associated with it that people want to pay for.
And all this responsibility falls on a specific profile within the companies and that is part of the CSuite management level, it is the Chief Innovation Officer , that is, the CIO .
It is important to clarify that innovation is not just technology. We can use new technology in our organization and we will not be innovating for that. Innovating is creating with impact. What is true is that in most cases innovation is on the frontier of what is technologically possible .
The 3 horizons of innovation
Peter Drucker, the great guru of business strategy said that throughout his life he met many people capable of managing the long term well, and even met a large number of people capable of efficiently managing the short term, however, they are very few people are able to efficiently manage the balance between the short and the long term .
This efficient management between the short and the long term must be a capacity of the managerial level of any organization, and even more, of the innovation director .
A very useful planning technique for managing this balance and mapping growth is called Three Horizons. This technique appeared for the first time in the book The Alchemy of Growth , but nevertheless, in my daily work as CIO of IEBS Business School I change some aspects in terms of time and form according to the needs of the current digital companies that I pass to you. to explain and that I hope will be of value.
Horizon 1 focuses on the short term. This short term will depend on the type of company, but we could say that it is a period between 1 and 3 years. The type of innovation that is carried out in this horizon is about incremental innovations on the products and services existing in the organization. In other words, we focus on what the market already understands as value. This horizon should consume 50% of the organization’s resources.
Horizon 2 focuses on the medium term, which for most companies comprises a time period of approximately 5 years. In this case, the creation process focuses on new products and services, taking advantage of the knowledge and capabilities that the organization has. In other words, innovation on this horizon focuses on new products related to existing ones . The actions to be carried out on this horizon should consume approximately 25% of the resources.
This horizon is the one that presents the greatest risk, but it is also the horizon that brings opportunities to organizations to break the existing rules of current markets and lead it, and even create new markets.
On this horizon, the objective is to develop new products, services, business models , channels or new companies that have nothing to do with what we know or do. The objective is to reflect on social and market trends and then see what resources we have to address a solution to a problem that does not yet exist, or even that never will exist. Horizon 3 proposes a temporary space of 10 years for digital companies and they are Moonshot- type projects .
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Functions of the Chief Innovation Officer or CIO
The CIO of an organization is a key position that reports directly to the CEO of a company, and it is a position that requires great leadership with specific mindsets and capabilities.
The head of innovation of a company in the current digital age must have a creation mentality , that is, as seen in The Three Horizons, creation is the predominant process in innovation.
In addition, they must be a curious person , capable of wondering the why of things, even those that we consider as true or immutable.
And this is not all, but it has to demonstrate a strong mentality, adaptable to the incessant changes in today’s world, and resilient since innovation is risk and the failures that come cannot change the focus or the plan.
- Regarding the capabilities of the CIO, first of all say that he has to be a person close to the team since he will need to work the culture of the organization towards innovation.
- On the other hand, the capacity for critical analysis is key, the CIO cannot take anything for granted or be guided by lines of general opinion, the head of innovation of a company must have his own opinion about things.
- Finally, you must be an observer of trends and social changes looking for opportunities in changes.
Who said it would be easy to be the CIO of an organization? Those of you who, despite all that we have seen here about the responsibilities of a CIO, remain convinced of becoming one of them, deserve all my admiration and respect, and I sincerely wish you the best of luck.
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