EXCL – The unstoppable rise of the Chief Innovation Officer in 2023
More and more UK businesses are making innovation a priority. The conviction is growing that tech and the implementation of innovative solutions drive business growth and help firms to stay ahead of the competition.
It is therefore no surprise that the chief innovation officer takes an increasingly prominent position within many businesses, and that won’t be any different in 2023.
Brexit and the pandemic, in particular, prompted the rise of CIOs as continued innovation became vital to thriving in an increasingly competitive market.
Time for City PM to catch up with Paul Dodd, in charge of innovation at, and the co-founder of, pan-European e-commerce fulfilment start-up Huboo.
Businesses investing in innovation are always in the headlines, but why are we suddenly seeing such a rise in the prominence of Chief Innovation Officers (CIOs)?
The rise in CIOs is quite simply a reaction to external pressures, with increasing economic challenges, supply chain issues and rising competition forcing companies to find ways and means of keeping ahead. Big innovations are always in the news, but what we don’t see is how the company has got to that point.
“In the past, it has probably been the work of many different teams coming together with innovation almost an ‘add-on’ to their day to day.”
Paul Dodd
But we are seeing a big change in that, with companies recognising its importance in leading them out of more challenging times. My own role has always been innovation focused, but shifting to CIO from CTO, as a co-founder, shows how much I personally believe in it!
It is no longer enough to ‘hit and hope’ with innovative activity – it needs a dedicated person to drive it and have a say in business decisions across the board. Indeed, recent research by ForrestBrown shows this is happening – 1 in 10 FTSE100 businesses now have a CIO, and outside the FTSE100, 71 per cent of CIOs sit on the board.
Would you agree that Brexit and the pandemic have prompted the rise of CIOs, as continued innovation is becoming vital to thriving in an increasingly competitive market?
Good question, and yes. Both have been extremely disruptive to most sectors and business have had to adapt to survive. That naturally lends itself to more innovative activity that needs driving on a daily basis.
The same research from ForrestBrown also showed that, when faced with a crisis, businesses turn to innovation. Two fifths of businesses increased their investment in innovation as a result of Brexit, and over half of Chief Innovation Officers (CIOs) would do the same should a recession occur in the next 6- 12 months.
“The businesses that didn’t adapt struggled, so the proof is in the pudding and highlights innovation as the core marker of success within this competitive market.”
Paul Dodd
What does the role of a CIO entail?
The role of a successful CIO is to encourage and drive innovation for more efficient and more profitable ways of doing business. Doing this successfully means making sure that you are always innovating internally at a faster rate than the world moves externally. You have to get there first!
Heading up a new team at Huboo that will be solely responsible for innovation is a new and exciting venture for me, and it will take a combination of approaches to ensure we are always innovating faster than the external world. There is the more traditional, structured route that follows certain processes, almost funnelling different discoveries down a very specific path, to deliver the desired outcome.
“The second approach is relying on the ‘strokes of genius’ – employing people inspired by the Steve Jobs’ and Elon Musks’ of the world who hone in on a vision for the market and make it happen.”
Paul Dodd
In reality, scalable innovation – the foundation for any modern R&D business – needs both, and the role of the CIO is to motivate and drive both types of employees on their team to deliver the best possible results. Obviously, there is also a need to meet business targets, and sourcing the right funding for innovation is another vital part of the day job.
So what does it take to become a CIO, and what kind of backgrounds lend themselves to the role?
Traditionally, there appears to be a very typical career trajectory to most C-suite positions, but this isn’t really the case for a CIO – it is somewhat of an anomaly, with a multitude of different backgrounds lending themselves to it. If you look at all the backgrounds of CIOs in the FTSE100, there is a spread of experience from marketing to IT, and this is the case even in the most R&D intensive sectors like manufacturing or Aerospace and Defence too. This is actually a real benefit – the mixture of backgrounds is useful when it comes to innovation as everyone comes at it from different angles and with different points of view.
Why are some sectors on the forefront of innovation in the UK, while others are lagging behind?
The UK has various schemes in place that offer tax relief to encourage R&D activity. But, as with any policy, there are nuances as to how it can be used and exemptions that apply that have varying impacts on different sectors. For example, companies can only claim for activity that takes place within the UK borders but this impacts some sectors more than others.
Manufacturing, for example, often relies on activities in technical specialism to drive innovation as a means of addressing the widening skills gap in the UK, but if that activity does not count it cannot claim the funding it is entitled to.
Reforming the criteria of the R&D tax policy to include innovation that happens abroad, as long as the company is headquartered with most of its operations in the UK, would go a long way in reviving sectors that might be struggling in innovation.