You may have noticed the rise of a new C-level executive called the chief innovation officer. This is a relatively recent phenomenon, especially in the insurance industry, where both Chubb and AIG have chosen to invest in creating this position at a global level.
So, where did the role come from and when did it start? Checking with Google Trends, it would appear that the role first started being talked about online around 2008.
With circa five years under its belt, I guess we could argue that the role has arrived as a concept in our world. Certainly, there have now been a number of articles published in the press focused on promoting it. For example, HBR have published a couple of interesting blogs recently from Daniel Burrus positioning the chief information officer for this role and the chief technology officer for a transformative role.
As if chief innovation officer wasn’t enough, we were approached recently to help an executive search firm to find a chief disruptive innovation officer for an insurer. Yes, normal innovation wasn’t what this insurer was looking for. They wanted to focus on ‘disruptive innovation’ instead. Now, I should emphasize at this point that Celent is not a recruitment firm and that we declined to help. So, please — no CVs or resumes. That said, it was still interesting to speak with them to hear about the challenges they were facing in trying to find the right person.
First of all, the pool of people with this title already is pretty small. So, not a great place to start if you’re looking to present a range of options to your client. It makes for a very short short-list.
Secondly, if you’re going to expand the net to capture more people, where should you look? There is no well-trodden career path that I’m aware of that culminates in the destination of chief innovation officer. The other CIO maybe? (not the chief investment officer but chief information officer). “Too technology focused,” was the reply. “Technology is important but this is a business issue.” So, what about looking outside of the industry, perhaps targeting a proven entrepreneur? “Possibly. However, we’d need to think about cultural fit and understand why a proven entrepreneur from outside the industry would want to join an established insurer.” In the conversation that followed, it was clear that they too were struggling with the concept. Candidates were either unproven, too academic, lacked C-level gravitas or too fixed in their ideas and experience.
Finally, the other big issue for them was that there is no standard job description for a chief innovation officer to follow. The brief that they had been given was broad, and indicated that they were looking for someone who could lead the organisation through both the exploration and then exploitation stages of ideas, taking the rest of the organisation along with them for the journey. A pretty tough ask in my view — a transformative role for an organisation of their size and complexity, and a role that the cheeky side of me thinks “Isn’t that the CEO’s role?”
So for me, this begs the question “What do you need to do to be successful as a chief innovation officer?”, especially when there is no job description or well-trodden career path. Well, one way to learn is from others doing all or part of the job already. Understanding how they have tackled the role will help to avoid the common pitfalls. For example, helpful questions may include: where to prioritise at the start?; how to avoid becoming an ivory tower?; what new capabilities are required?; how to engage the wider firm?; how to prove success?; and how to strike the right balance between incremental innovation in the existing business versus disruptive innovation in new models and propositions? These are great questions that could save a lot of time and pain when establishing the role.
On October 2 this year in San Francisco, we will be holding a roundtable on "Making Innovation Happen" to tackle these type of questions. This roundtable event is targeted solely at senior leaders across Financial Services who have been given a responsibility for fostering innovation within their firms. It will be an opportunity to share ideas and concepts about what’s worked and what hasn’t. So, if you have been charged with making innovation happen, then please get in touch. We’d be keen to hear from you.
Finally, I should not forget to mention another great source of learning on the topic, that is to to dip into the extensive management literature written on the topic of innovation. David Teece at the University of California, Berkeley, Haas School of Business has written some great work on Dynamic Capabilities. Although I don’t believe that his research goes as far to define a job description for the Chief Innovation Officer, it certainly outlines many of the critical capabilities required by firms to succeed. I’m a recent convert to his work — it makes a lot of sense to me. However, a quick word of warning, his background is in economics — so be prepared for some heavy reading.
This blog has been reprinted with permission from Celent.
Jamie Macgregor is a senior analyst in Celent's insurance practice, and can be reached at firstname.lastname@example.org.
The opinions posted in this blog do not necessarily reflect those of Insurance Networking News or SourceMedia.
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