Five by Five / 5×5: Which CxO Owns Innovation in a Company?

by | Friday, September 13th, 2013

Every Friday — even on Friday the 13th — RE:INVENTION’s team reviews a recent news article or study and provides our thoughts and commentary based on our unique individual perspectives. We call this weekly blog feature, 5×5.

This week we’re reading a recent Forbes story titled “Cleaning Marketing’s House,” written by brainy Mikal Belicove. Experts featured in the story question the role of CMOs and suggest that everyone in a company should be involved with marketing and “changing the game.”

The notion that “traditional” CMO tasks need to be distributed throughout an organization intrigues us. According to an Oracle-sponsored survey by the Economist Intelligence Unit, 45 percent of respondents believe that CMOs and marketing teams are responsible for leading innovation initiatives, putting that functional role for marketers in the company of product development (47 percent) and research and development (44 percent). No other business unit got a response of higher than 25 percent.

THIS WEEK’S QUESTIONS

In light of this article — and RE:INVENTION’s new service launch, CxO For the Day — we’re asking these thought-provoking questions:

Should every CxO — the CEO, CIO, CTO, CFO, and COO — not just the CMO — be equally responsible for innovation, change management and new product development? What impact can various CxOs have on innovation?

OUR TEAM’S RESPONSES

Joe Barrus (“The Technologist”)

There are a number of reasons why ANY activity within a modern organization shouldn’t be the exclusive domain of one function or CxO-led division. Companies must consider two drivers when they design their organization to divide and conquer:

  1. The boundary between pure “business” and “technology” has fast become a single, merged boundary. There are very few modern companies where technology has not become integral in the value and delivery chains. Many products and services either are fully digital or have digital counterparts. Think eBooks. And the delivery chain is fully digital. Think Amazon.com. Buying an eBook requires no interaction with sales or fulfillment personnel. Buying an eBook takes only seconds to complete the transaction. IT departments are increasingly being asked to move beyond being a cost center to become revenue centers for organizations. Any company that thinks they can separate marketing, sales and fulfillment functions from technology functions are making a big mistake.
  2. Accelerating advancements in technology are allowing innovations on these models to equally accelerate, shortening windows of opportunity to capitalize on these innovations. Companies need to find ways to create more cross-functional organizational structures, move away from specialists to generalists, and build in mechanisms that highly leverage cross-functional group think in order to adapt and change as quickly as their markets dictate. Execution of any modern business function requires competencies beyond the specialized skills of that function. Keeping with marketing as the example, a modern marketer must understand not only marketing principles, but also must have skills in psychology and sociology in order to understand how to optimize marketing outcomes in modern social environments and must have strong technical skills in order to operate within, adjust to and configure these environments.

Innovation, in particular, is neither a technical discipline nor a marketing function. Innovation is about stepping out of your narrow box (marketing?) and understanding how mixing together different ingredients (technology, consumer insights, marketing, operations) in unusual ways can create something of unexpected value. Innovation by definition needs to be a cross-functional activity. Organizations must embrace this reality and allow every CxO have a stake in innovating the business model and create mechanisms that encourage and drive collaboration across the C-level functions.

Kirsten Osolind (“Ms. Operations”)

Companies can no longer afford to take a “design-at-any-cost” approach to marketing, change management, and product development. CEOs, COOs, CIOs, CTOs, CMOs, and CFOs are all equally integral to innovation.

CEOs create a climate in which innovation can flourish; they set vision. CIOs and CTOs can customize technology tools to make complex, real-time calculations and support scenario planning. They can help CMOs and marketing teams understand engineering cost drivers and their potential effect on total product lifecycle costs. They can drive high-value new information assets throughout the company and transform big data into big insights and big opportunities. CFOs and smart financial planning can lower overall product lifecycle costs and demonstrate bottom-line value to the business. COOs make sure a business runs well internally. Their work ensures that innovative initiatives are implemented and executed successfully, marshaling resources toward their most productive uses with the aim of creating maximum value.

No one can make good decisions without considering all of the facts. Innovation is an all-hands-on-deck activity involving cross-functional leaders and team members at all levels.

Chris Lathrop (“The Digital and Social Media Thinker”)

Making innovation the exclusive domain of a CMO is a dicey proposition, as it excludes other areas of a company from being dialed in to what drives revenue. As Belicove mentions toward the end of the article, participation without action is ― here comes another P word ― pointless.

Facebook likes, Twitter followers and blog shares are great, but if they don’t equate to dollars at the end of the day, they mean nothing. Everyone in the organization should be aware of how their own innovations impact the bottom line, and thus be encouraged to offer insight on how to sell those innovations to the customer base.

As a digital marketer, I welcome this valuable insight from colleagues, both internal and outsourced, because it helps me do my job better. And while I am ultimately responsible for the tactics that convey that information to customers in a way that inspires them to act, everyone should be involved in the process that leads up to that rubber hitting the road.

Jorge Barba (“The Culture Expert”)

Innovation is not the exclusive domain of the CEO. Ultimately, he sets the tone. But, in an innovative culture, improvement (either incremental or radical) is an expected given from everyone in an organization.

Put simply, if people are not improving themselves, then why would the organization they work at be any different?

It is also important to remember that, a strong signal that a company is innovative, is if the CEO is an innovator. This can mean many things, but a key attribute is that he/she is open minded and encourages others to contribute ideas.

Dennis Jarvis (“The Marketeer”)

Ever consider how effective an innovative game plan for a wannabe Super Bowl Champion would be if the quarterback found himself alone in the huddle or waiting for the snap of the ball? After all, he finalizes the play calling based on the game strategy and input from the offensive coordinator, with the option to audible based on the defense.

However, without the skill and focus of the remaining team members, the result would be “not at all effective.” When the quarterback attempts to go it alone, the typical result is another P word ― punt.

Innovation in business is a team play and not the exclusive domain of the CMO. This was true decades ago and holds even more so today. Digital technology has accelerated the pace of innovation and, even if by default, enabled participation not only by others in the C-Suite, but also throughout the organization. What is essential is that innovation matches the needs of the marketplace – which is importantly different than wants – that are based on insights gleaned from a knowledge base with multiple dimensions that require perspective from multiple disciplines. The CMO plays a key role, but not the only one in ensuring the alignment of marketplace needs and innovation. An effective CMO can assume a lead role in innovation by developing a team mentality that includes the expertise from all CxOs, with a vision built around common goal. This inclusionary dynamic leads to great results. When it doesn’t occur, and the CMO attempts to go it alone, the result is typically a punt.

THE FINAL WORD

So. What do you think? Should every CxO — the CEO, CIO, CTO, CFO, and COO — not just the CMO — be equally responsible for innovation, change management and new product development? What impact can various CxOs have on innovation? Add your thoughts to comments below.

4 comments
Roman
Roman

Just saw the latest interview Penina Mezei made with Bezos, explaining the future plans for amazon. Penina asked some interesting questions

Mikal E. Belicove
Mikal E. Belicove

Thanks for calling attention to my September 6, 2013, article for Forbes.com. It's an honor to have RE:INVENTION take notice and pursue an item related to the points raised in the piece. As for my take on where the leadership for innovation should live within the SMB/SME or larger, I tend not to notice or care so much in which office it lives (i.e., CMO, CEO, CIO, CTO, CFO, COO, etcOO), as the case can be made for it to live in each and elsewhere. I'm more concerned with three other factors first... 1) That it exists at all; 2) That there's a real commitment to it from both the Board and CEO; and, 3) That everyone in the organization is involved and it's more than a just digital suggestion box.

Kirsten Osolind
Kirsten Osolind

Thanks, Mikal. Your article was thought-provoking and provided great inspiration. We agree with your three factors as well. Innovation initiatives require top-down and bottom-up involvement. Vision is critical to successful implementation and effectiveness. And it should definitely involve more than a simple suggestion box.

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