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The Smarter Startup

To Keep Innovating, Avoid Hiring a Chief Innovation Officer

Innovation is a mindset, not a job title. This article explores an argument by Forbes on why hiring a Chief Innovation Officer (CIO) is a bad idea.

As more big companies make space for the position in their C-suites, hiring a Chief Innovation Officer (CIO) may seem, to the untrained founder, as a sign that the startup has reached a milestone where the institutionalization of innovation will ensure continued growth. After all, these huge companies seem to be doing precisely that, as their innovation luminaries spread the wisdom of techniques like design thinking and agile product development to the organization.

As on-demand CFOs, we often have the benefit of watching how different management teams function and assessing their effectiveness. And our experience indicates that assigning an ‘innovation czar,’ often as a CIO, results in less – not more – innovation. An article published by Forbes a few days ago (Hiring A Chief Innovation Officer Is A Bad Idea, by Chuck Swoboda, February 24, 2020) confirms our team’s empirical experience having worked with hundreds of startups, which depend on innovation to prevail, and brilliantly explains why.

“You’ll have almost no chance to really innovate.”
The Forbes article opens with this courageous statement, after stating in their headline that hiring a CIO is a ‘bad idea,’ and boldly challenges the wisdom of an article published in the Harvard Business Review (HBR), which guides hiring a CIO (What Kind of Chief Innovation Officer Does Your Company Need? by Darko Lovric and Greig Schneider, November 2019). I personally like how Forbes challenges Harvard’s main premise, and totally agree with it based on our collective experience, even though many of our on-demand CFOs and I are Harvard Business School alumni.

Specifically, The HBR article states that the CIO role is ‘one of the hottest jobs in the C-suite these days,’ and does not challenge the premise that needing a CIO in the first place could be a bad sign. This is where Forbes gets it right, based on our experience, we agree with their argument that innovation cannot “be delegated.” They go on to explain that Innovation needs to be engrained in your culture, because:

“Innovation is a mindset—not a job title or a seat in the C-suite. To work, innovation must be part of an organization’s cultural fabric, and everyone has to buy-in. It is much more than something you do; it is the way that your company thinks.”

“It’s the job of the CIO.”
The piece by Forbes explores how the creation of a CIO role sends the wrong signal to the company. They put it brilliantly:

“When you hire a so-called chief innovation officer, you virtually relieve everyone else of the responsibility and accountability for making innovation happen. Rather than elevating—and expecting—the entire organization to pursue breakthrough ideas, you establish an environment that allows people to opt-out or become conscientious objectors to change”

This is entirely logical: there is a person in charge of innovation, everyone else is off the hook. The risk-taking, breaking-the-rules behavior needed to sprout the ideas that keep products and services relevant to customers – and ahead of the startups who see the holes you don’t – move to be the responsibility of one person, not a part of the culture.

An argument could be made that a Chief Innovation Officer is only an enabler of innovation for others. For example, this could be the person who organizes a hackathon to help the engineering team solve a problem, or who finds interesting startups that can result in smart acquisitions or partnerships. The problem is that the rest of the organization often does not see a CIO as just the facilitator of innovation. Why would they? The name of the position says it all: ‘chief innovation officer.’

It’s actually the job of the CEO
Interestingly, it is worth noting what we’ve seen as a critical ingredient to sustained innovation, and which the Forbes article addresses head-on: the responsibility to keep the company innovating rests with the CEO and the founding team. They are the ones who have the vision, the hunger, and ultimately the responsibility to keep the company competitive. Forbes writes:

“So, hypothetically, if there is a head of innovation, it should be the person who, at the end of the day, is responsible for the success or failure of the entire enterprise. It should be the person who has everything to lose if innovation doesn’t happen—a president, a CEO, or a chairman. Not a chief innovation officer.”

Even the HBR article points in this direction – although the writers do not see it. They write of “six main types of innovation officers,” the researcher, the engineer, the investor, the advocate, the motivator, and the organizer. These seem to me pretty much the hats that a good CEO wears as their company evolves. Therefore, it seems appropriate to close this article in the same way Forbes closes theirs – with advice to the CEO as follows:

“Don’t delegate it [innovation] to a chief innovation officer—and put your entire company in a position to really innovate.”