The Emerging and Evolving Role of the Chief Innovation Officer

We're on. Good. Well, look, we have 30 minutes and luckily the team have done a really great intro, so we won't spend any time on intros. Suffice to say, Marika, that you've had a really interesting and storied career so far in Chief Innovation Officer roles, and we've just heard about the importance of CIO role in Allcharts from, from Tendayi. Looking back on your career so far, and this is something that we talked a lot about when we first met and And we talked about over pizza last night as well. Why do you think it's still so uncommon to, A, see a chief innovation officer role in most corporates, and B, even rarer to find it sat at the top table?

I think we almost heard that in the previous conversation, the fact that it's, what did we say, 3% of CEOs who think it's important that growth comes from innovation. So when I'm looking for new jobs or roles, really talking to the CEO and understanding that they are really there for wanting innovation. If you don't have that, it's gonna be a very tough journey. And I'm sure many of you also recognize that in your conversations. So I think unfortunately that is, and I love that there is more conversations about it now and people are listening to really brilliant people who know, saying you have to focus on it, otherwise it's not gonna work. But I think that's why the role is not that big yet. But I think it's an incredibly important role, and not buried down in an organization. It just doesn't work. Then it's like any other role. It needs to be that role that sits next to the CEO and have exactly all of those conversations that Tendayi just had. So it's how do we work with HR? How do we remove the obstacles when hiring or moving people around? Or how do we make sure that finance understand that we do need to have metered finance over time and longer-term investment horizons? How do we make legal understand that maybe they have to hire some people who are in a different field than they have been before because it's a different type of maybe business models that we've had before? So it continues that conversation. It's absolutely critical. Otherwise, it's hard, really hard to do innovation and be successful.

And if you were kind of, let's say you're in this room, you're in a Chief Innovation Officer role, maybe you're kind of buried down in the org chart a little bit, or let's assume that maybe you're kind of pitching a new role to a, I don't know, Fortune 500 CEO. What would you pitch as being the number one benefit of having a CIO report directly into a chief exec?

So I would say that there's 2 things. So the first one, if you're pitching the role upwards, I think it's just kind of the question of, to the CEO or to whoever you're pitching, why do you have innovation? What do you want the output to be? Most of them will say, well, we need either to become much more efficient about what we're doing, if you do the incremental part, or it's like, we want to grow. Okay, then that's then aligning with the strategy and the CEO saying we want to do the same. So that's kind of like saying we need to get the attention of it. Then on the other side, it's do we have the knowledge on C-level and in middle management to do this? Most likely the answer is no. And of course, we cannot say to people that every day you're gonna have to sit and understand innovation if you work in the deepest operational part. But wouldn't you, if that's so important for the company that you do grow or you become more efficient with innovation, that we have some level of understanding? And how do we get that? Well, it has to kind of come filtering down from the top. So at least the CHRO knows a little bit, the CFO knows a little bit, and they can then take that accountability of filtering it down. That's how you get that culture, and that's also how you get the results.

And we talked a little bit, Tendayi touched on how difficult it is to have these sort of siloed, isolated conversations with sort of legal, HR, sales, IT, finance, whoever it might be. And I guess one of the huge benefits of having CIO on the board is that it kind of breaks those silos down, right? And it means that there's one conversation to have and that fewer things get lost in translation between a CIO, CTO, you know, chief product officer maybe.

Yeah. And the other thing is that, and I'm sure you, most of you've seen that, is that when you actually do something that's new, You don't know what all the obstacles are gonna be. If you are, I think you're probably some type of, like, have a crystal ball of some sort, meaning that you will run into obstacles for new things. If you then have to take 6 months because you have to talk to all the different instances, then your project— and so why don't you have any results in innovation? But if you have someone sitting at the top saying, we know we have this, we just can't get to action, access to the market, or we can't— we have a really big problem because of compliance, whatever it might be. You can take that conversation directly, and you can take it to all of the top level at once. And then they can just go, oh, we need to fix this. We cannot wait for 6 months. This is too important for us.

So it's a big kind of blocker remover. And how else would you define success in the role? So, you know, thinking about the roles that you've held at Noble, at Maersk, at kind of E.ON, what What's the big sort of success criteria for the Chief Innovation Officer role? How would you measure it yourself? Not how is it measured by the chief exec, but what measures would you place on it?

We've heard that today as well, and I have one employee in the audience today, and I think she would agree with that somewhat. I drive a lot. Unfortunately, the case is it is top line, bottom line. You have to show the results from a financial perspective. Yes, the time horizon can be a bit longer, But it has to come. If you don't, you are going to get killed. It is just like that. And then the other benefit of sitting there at the top is that you always hear what is the most important thing at the moment for the company. And then you also can kind of shift the conversations in your unit or in innovation to be like, just remember right now they're really pressured in a specific area, financial. Then maybe today is not the day to come and say, I want that those $5 million. Let's do it next week. So you can time it much better. But for me, it is that bottom line that's important. It's just how it is.

And let's dig into this sort of issue, I guess, around sort of time horizons and sort of measuring that success. So when the payoff, I guess, from most of the work that's happening within the innovation teams that we all kind of work in or work for is maybe 5, 10 years away, beyond, sometimes way beyond the tenure of kind of most modern chief executives. What's the strategy, Marika? How do you, um, yeah, how do you do that at the top table?

Well, again, it's coming back to dialogues and the human interaction, as we heard before, because I just like to ask my peers and the CEO, what do you want the outcome to be? And people are people, they're not unreasonable. So if they say we want to have this massive stake and maybe grow by $2 billion, then I say, okay, you're not gonna get that next year. We can start and we can do and we can have a good plan and a good funnel with a lot of things to be able to get there, but you're gonna have to give me time. I'm very happy to give it the metered way and we, you know, get funding over time, but they also realize you can't get that. You potentially can if you buy another company, but then you kind of say, hey, We either can do it internally with help of externals and maybe buying pieces on the way because we're so uncertain of the business model today, or we go the M&A route, and then we would go into another discussion. It's setting the expectations right. I think that's a lot what a lot of innovation functions unfortunately don't do. They don't dare to have that conversation. Then if the CEO or the C-level says, well, We can't wait for 10 years. Fair. But then you're going to get something that's a little bit maybe lower in ambition with a little bit— yes, we still hit the bottom line, but it's not going to be by $2 billion. It might be by $100 million. So I think it's kind of those conversations, and it's easy to have when you sit there at the table.

And when you're sitting around those tables, do you feel— so you've got to rely on kind of leading indicators, right? Because actually, if there's a 10-year, $2 billion growth, plan, you know, the CEO is going to be there for another 18 months, there's a new one coming in, he'll be there for sort of 3 years, and, and maybe another sort of 2 or 3 by the time you get to the end of this 10-year plan. You have to use leading indicators, I guess, across portfolio, perhaps kind of ventures that you're building or investments that you're making. In your experience, do the rest of the C-suite understand the language of leading indicators and startup No, but again, that's your role as the Chief Innovation Officer to help them.

So I've usually, when I start a new job, I would have, with the help of the CEO of course, some type of training for the C-level, and then do it in a way that they really get to experience. Say, for example, take them outside of where they are. Don't sit in the office. Go to some cool companies who are doing great innovation, and However, be mindful of which industry you're in and what type of business models you're working with, because that's kind of what they're comfortable. So you don't push them way out into, say, work for heavy asset. Maybe not the best thing is to take them to the most digital innovative company who has a completely different business model, because you get a complete mismatch. But if you take them to a company, it doesn't have to be the same industry, but something that's doing something Say then with heavy assets, with somewhat similar business model, but they're super innovative, and then kind of help them with the language over there. Then the other thing is taking people in. This is always— that's why you're always taking consultants to use the same language as you do. So when you take them out, they've heard it from me once, but then they hear it from all these other people around, and then they go, that's a term, and now I get it, and now we can have that conversation. So, and you have to get— of course, it takes a lot of time and effort for top executives executives to say take 2 days out of their busy schedule. And that's where you need the CEO. And the CEO goes, nope, but this is very important. We need to be an innovative company. So you are putting aside all the other stuff you're doing, and you're going on this innovation journey and letting this chief innovation officer lead the way for those 2 days.

I guess the other place that sort of the board can learn— and we tried this with a client 2 or 3 years ago— was we toyed with the idea of kind of doing like a startup safari, right? Where you go to the Valley, hop out of a car at sort of interesting startups, startups. We actually felt that the missing piece of the puzzle was that they didn't speak the language or understand the philosophy of venture capitalists, and that actually we'd maybe be better off spending a day with them at Index Ventures hearing about their thesis and their portfolio strategy and learning about TPVI metrics and IRR metrics. Do you think there's a— do you think that that that that is almost a larger gap, the gap between organizational, institutional, financial knowledge and shifting mindset towards a more sort of VC philosophy rather than sort of large auto startups? Do you think that the sort of VC mindset is something that is missing in a lot of boardrooms?

That's a really good question. I haven't experienced that, but I'm sure it's there. But I think that's kind of the key again. It's the human factor coming into a company and understanding where are they on their journey and how does their normal day look like. So again, it's not, I'm an innovator, I get to work on all the cool ideas. No, I get to understand how the actual operations of today works and how the finance team is working today. And then how can we then bridge the gap to where we need to go and what are the conversations we need to have and Where do we need to take them? Because I've also worked for companies who have actually been quite far advanced, and if I would then take them to— then they would sit there and, we know this already. So it takes a lot of time. I wouldn't go in my first day and say, let's go on a trip. No, I would do it probably after 6 months when I really know where they are to bridge that gap, whatever the gap might be.

If there— and I guess there are a few, like, aspiring chief innovation officers in the room, maybe just the few of us that aren't completely embittered just yet by the whole experience. You know, if that's the long-term view, if Chief Innovation Officer is, is kind of what you are sort of aspiring to in your corporate innovation career, what's the, what kind of one piece of unconventional or controversial advice would you give to people in the room who are sort of aspiring to that CIO role?

So when you are either pitching for the role or applying for a role like that, you have to be willing to say no to the role. And why do I say that? It's because a lot of these roles are set up to fail. So, for example, don't you— are you down there in the organization? That necessarily doesn't need to be a no, but the person sitting on top of you Are they a hierarchical person who would be really offended if you every other day went to the CEO without talking to him or her? That would never work. You have to go through someone all the time. Would you have the possibility of talking with C-level and board on a more continuous basis? We also heard, are they willing to set aside a budget, even if it's metered, so they can be as big set of money, but you can only unlock it by doing certain things. Is that okay? Also, is this— sorry, getting back to CEO— is the CEO even willing to have these conversations? Is he willing to take time out of his normal— or I say him, him or her, sorry— busy schedule to actually sit down with you and your teams on a regular basis to talk about these incredibly important topics? And if I would say, if none of these are there, or they're not even willing, I would actually say, well, I'm sorry, this is not going to be going well. I don't think we will have the possibility to be successful here, and say no. So that would probably be my advice.

So yeah, so be ready to turn a lot down. And Marika, I sense that you're speaking from experience here. What are some of the really common sort of red flags that you see? So when people are sort of hiring Chief Innovation Officer roles, so apart from the obvious, like, There's no budget, but there's a metaverse strategy. Like, what are the other sort of big red flags that you see?

I'm sure a lot of you've heard that one, is that we tried it, it didn't work. And then you ask why, and then they can't really tell you why. So it's just like that curiosity mindset. It's one of those things that it's fine for me. I've had— I actually got recruited to a role like that. where they said, we've tried and we tried and it just doesn't work. And I asked them and they said, we don't know, but can you help us find out? Then I was like, yeah, I can do that. We're humble enough to kind of have those conversations. That's for me a big red flag. The other red flag is, again, if— getting back to the CEO, but the CEO is not willing to work with the other executives. So having that like, okay, trying to silo it too much because we heard it takes a village. So I don't think it needs to be a very entrepreneurial HR or a very entrepreneurial finance, but they need to be willing to have the conversations, and it helps if the CEO is also pushing them. I'm thinking if there's anything else that's a super, super red flag.

And so conversely then, kind of like, what are the green flags? flags that you're looking for on, you know, sort of first conversation with the chief exec?

Already said it once, like the curiosity thing. Like, oh, we're intrigued to learn, we're intrigued to kind of figure out why it hasn't been working for us before, we're willing to try new things. So that's one. And the second thing is also, as I've also said so many times, the willingness to be okay, we dare to do something And yes, we want it to hit the bottom line, but every single project doesn't have to. So we're willing to take risks, calculated risks, but that's for me a very big. Then the other thing is it's not a set model you come in and say, this is what we are doing in innovation. It's like super narrow. We have already decided it's only incremental innovation. Then for me, that's again coming back to curiosity. It might be the thing that's right for the company. So I'm not arguing against that, but if they're so set on it already, then there's not that exploration mindset. And you want to work through with C-level what you should be doing instead of just kind of saying, this is what it is. Another green flag is I would also talk to the employees in the organization. So see, how are you? We talked about all the hurdles that you have to jump over. It's fine that there's hurdles because it's your job to kind of remove them. Together with the others. But if the hurdles are— you hear that, yeah, but I get stopped everywhere in the organization by my manager and this manager and that manager, and it takes me like just 10 steps to even get to talk to the right person. That's a little bit a lot of hurdles. So I would say like if people— yeah, they're already conversations, they're already— they're kind of already bubbling a little bit. They want to, but they don't maybe know exactly how to structure it or how to really have the right conversations about things, or they don't have the right vocabulary, or whatever it might be, then I'm also green flag and I will go for it.

And let's sort of dig into sort of boardroom dynamics a little bit, because we've talked about the relationship between Chief Innovation Officer and the CEO. I'm curious to learn more about the relationship between Chief Innovation Officer and those other sort of executive roles. Who is the natural enemy of the Chief Innovation Officer? For Chief Marketing Officers, it's usually the CFO, right? Who's the natural enemy of the Chief Innovation Officer? And what advice do you have about what you've learned about working with other maybe difficult members of the C-suite and kind of bringing them around to your way of thinking without mentioning any names?

Well, So I think it's very much dependent on which company you're working for. In some organization, the chief commercial officer is absolute king and he owns the customers and they are not allowing you to talk to them. In some, it's operations, and it could be legal, it can be finance. I think I've seen it all. I think it's very much dependent on person. Actually, the former CFO I worked with was incredibly innovative and we had no issues at all. But my tip again, and I said it a little bit before, is you have to understand what they do on a daily basis. Like, it helps you therefore to sit up there because you know their problems right now. So what are their pains? And then you need to be the politician and angle what— okay, what we are doing innovation actually will help you over time. And there is pains everywhere. And also we had this story about legal because they often get annoyed. It's like breaking the rules again. I've broken a lot of rules in my career. So, but then it's again talking to them about what are the most important things that we have to do. And then setting up the forums for that. So that's something I've also done a lot, setting up those forums we just heard for like, okay, we have the legal team sitting together with the innovation team. And even better if we can have forums where the legal team sits with the finance team, with the sales team, together with innovation on a specific topic to really make sure we can solve that. But it is, You have to understand what they're doing, and you have to be the human in it, and you have to be like, okay, we're here together. We're here for the same reason. It's because we want the company to succeed.

I'm going to move into sort of prediction territory. So we're seeing the CIO role become more prevalent in kind of boards and C-suites. Still nowhere near where it should be. Arguably. What are your big predictions for what the future of the role looks like over the next decade?

That's a really good question. So my hope would be that it's really a hand-in-hand role with the CEO. So that's the first thing. I've even heard the term Chief Entrepreneurial Officer. So it's almost like the person next to the CEO who's handling all the new bits, because it is very hard to both think today and tomorrow and operational. It is very, very difficult. But then I also— we've heard that a lot today as well. There is today so many ways from like with generative AI and those tools to be able to sort through ideas better, to be able to kind of maybe move the funnel a little bit faster, Being able to find the partners a little bit easier. So that's kind of, for me, the technology side. And on the role, well, my dream is actually that there is no role needed. That sounds a bit weird. I'm getting rid of my job because I want company to be that innovative because companies have to realize it is moving. And if you don't catch on, you're gone. But I don't think that's gonna happen.

And I guess bringing it back to sort of present day, and maybe to set us up for the next couple of days that we've got here in, in Milan. In your view, as an experienced Chief Innovation Officer, what is the biggest problem that corporate innovation, corporate innovators have in 2024 that nobody wants to admit, and how do we overcome it?

That's such a hard question. I have a few. Am I allowed to say, like, I'll say a few. So one is that I think unfortunately, because there hasn't been— companies have had results with innovation, but there's been much more companies who haven't had results with corporate innovation. So innovation has almost in some instances become a little bit of a bad word. And I have also heard a lot of people say, yeah, innovation in our organization doesn't have a good reputation. Which is really sad. So I think it's overcoming that challenge to really still prove that it's something that's worth doing. I really believe that. I believe if you get it right, you can do some incredible things. And I've seen that a few times, and it's absolutely amazing. But I think unfortunately, and maybe, you know, we've changed names for everything, and maybe innovation would be called something else because we were like, forget about innovation, but we're actually doing the same thing. So I think that's one thing. And the other thing is, unfortunately, it's that it's not taken serious by the top. So we are bearing it down in the organization. The C-level just simply don't take time, especially today in the financial climate. It's all about operations today. We need to make money. Shareholders, they still want their money now. So it has to become more of a longer mindset, and we have to help The executives understand that with help of innovation, we can actually make more money even today, because you can. There are ways to do that as well.

So the next couple of days, how do we fix our PR and image problem maybe? And also, how do we convince those around us to take a longer-term view of what we're building? Marika, it's been a real pleasure. We're all that stands in the way of these people and lunch, so we better get out of here. But yeah, thanks for joining me.

Thank you so much for having me.