The Struggle to Innovate
It is clear that no matter how established a corporation is, it is never truly safe in being able to hold its position and market share in its particular industry. Companies continue to face the threat of being disrupted by up and coming startups. These startups threaten to take away the stability that many older and more established players hold. As startups venture into providing innovative products and services while operating under newer and more lucrative business models, they intently raise customer expectations in the way they solve the pain points that their target market experience. In this way, startups can capture leads from their corporate competitors before they can adapt to the new customer demands.
Startups are known to be agile in the way that they operate. They can disrupt industries in remarkably rapid ways because they lack the bureaucracy that often plagues larger corporations. With the absence of the red tape that hinders decision-making for corporations, startups can get new ideas off the ground efficiently. Understandably, corporations will often have higher levels of bureaucracy and rigidity due to their traditionally larger employee bases and systems. Despite this, it is still precisely this bureaucracy that makes innovation so difficult to accomplish for them.
In addition to high levels of bureaucracy hindering corporate innovation from flourishing, many company leaders have difficulty managing innovation strategically. These leaders often lack the vision needed to align innovation with the overall business objectives that they seek to accomplish. According to a 2017 report conducted by PwC, 54% of corporate executives struggled in aligning innovation strategies with their company goals.
Enterprise Innovation Heads in Unlocking Corporate Innovation
To combat the bureaucracy that hinders innovation and the difficulties in strategically managing innovation, organizations must integrate a strong innovation and collaboration culture into every aspect of their operations. One way to accomplish this is by appointing a leader who will ensure that there is support for innovation throughout the different areas of the company. With the right leadership, corporations will be able to quickly adapt and navigate through the ever-present dynamism in today’s business environment.
One of the most prominent positions to emerge in major companies over the last decade is the Chief Innovation Officer (CIO). This position goes by many names, from the Head of Digital Transformation, Head of Innovation, to Chief Digital Officer. This position was virtually unheard of in the past but has recently grown tremendously in popularity. In fact, by 2017, 29% of Fortune 500 companies had a chief innovation executive. To foster innovation in organizations, it has become the role of this executive to cultivate a collaborative work culture that ensures company initiatives and resources continuously keep innovation as a key focal point. The CIO plays an integral role in managing change to align innovation efforts with concrete business objectives, maximizing innovation capabilities within company operations, and building a culture that promotes innovative mindsets amongst employees.
Due to the broad nature of what a CIO seeks to accomplish, the responsibilities and tasks depend primarily on the industry that the CIO’s organization belongs to. Companies that deal with specific products and services require a level of expertise in handling specific business scenarios. The needs and focus for innovation will vary depending on the company’s sector, and so the qualifications of a CIO are never truly clear cut across a broad range of industries. Despite this, an innovation survey conducted by PwC (2017) noted that 54% of executives emphasized that technology and business model innovation were their key areas of focus. In this regard, the CIO should manage the innovation process by initiating strategic change and leading the digital and technological transformation. The CIO should identify the various strategies and opportunities found in technology that help build the company’s capabilities to respond to the disruptions brought about in the ever-changing business environment.
The Philippine Context
This rise in corporate innovation executives is not exclusive to the companies of the west. The presence of this executive position is becoming increasingly widespread even across the organizational structures of many Philippine-based corporations. Innovation has become a top priority for many of these companies to maintain the strong positions that they already hold in their respective industries. The establishment of the CIO position in these companies only emphasizes the importance that they put on building their innovation capabilities. In the past decade, there have been five major Philippine conglomerates that created CIO positions to manage their innovation capabilities strategically. These companies include the following: (1) RCBC, Yuchengco Group, (2) Aboitiz Equity Ventures, (3) Ayala Corporation, (4) JG Summit Holdings, Inc., and (5) Udenna Group.
Despite many corporations formally establishing the CIO position in their organizations, many companies continue to struggle with understanding what innovation means for them. Given the organizational position’s infancy, struggling to understand what innovation means is understandable especially considering how rapid technology and its applications are developing. For organizations to succeed, their leaders need to possess a strong understanding of the multiple applications technology has, and at the same time, be agile enough to see the utilization of this technology through. Embiggen Consulting was created to ensure that leaders are well-equipped with the necessary skills for digital transformation regardless of whether or not their corporations have formal CIO positions in their structure.
The increasing number of CIO positions in corporations signifies the commitment that companies have towards formalizing innovation systems in their respective organizations. Beyond this, CIO positions also act as a signal to a greater emphasis on innovation extending to the entirety of numerous industries. A rise in strong innovation leadership within companies has the potential to revolutionize how corporations deliver value to their customers and the rate at which they continuously develop.