The rise of the Chief Entrepreneurship Officer
It’s a known fact that large organisations — or legacy organisations- are struggling to keep the pace with new entrants, in particular, if they are entrepreneurs leading audacious start-ups. An entrepreneur is someone who is not afraid of being disruptive, breaking the rules while trying to build something, and not particularly worried, at least in an initial moment, with the current “fiscal year”.
In contrast, the CEO is worried about the fiscal year, the P&L, managing day-to-day operations. Reducing the risk of not meeting financial goals is a key priority. Failure is not an option for CEOs, and that’s great but it’s insufficient if you operate in a highly competitive and volatile market. Unless you are government, you fall into the latter.
But is there a problem with the CEO being worried about managing today? Of course not, but it’s insufficient. A good CEO should be responsible to manage today (what we know), but also inventing tomorrow (what we don’t do and know but we can explore, and invent). If the CEO is not able to do both, and most probably he isn’t because his background is a typical MBA career path, he can delegate the responsibility of ‘tomorrow’ to the Chief Entrepreneur.
Who is the Chief Entrepreneur?
The Chief Entrepreneur is someone who understands about balancing ‘today’ while exploring, and inventing the opportunities of tomorrow. It’s someone with a broad scope of skills in many different areas, a background in entrepreneurship (ideally he/she has started a few companies already), and a background in a medium to large corp as well.
The Chief Entrepreneur understands strategy, innovation, and technology. He can wear a suit or a pair of jeans and a t-shirt while doing something serious. He is able to make solid presentations in the board room but he/she is also able to ‘go outside’ and explore unmet customer needs using behavioural approaches that a formal management training doesn’t teach.
Why the Chief Entrepreneur is not the CIO or CTO
How many CIOs (Chief Information Officers) were able to become more than a CTO (Chief Technology Officer)? Can we say 2%? Maybe 3%? That’s right. The typical CIO is still worried about the datacenter, IT governance frameworks, licensing, the help-desk, and keeping the scrum teams efficient and effective.
How many CIOs do you know that are able to understand and apply growth hacking, design thinking, lean-startup, strategy, marketing, design? How many CIOs do you know with experience trying to set a start-up and make it scale in a short time period?
It’s going to be hard to transform the majority of CIOs/CTOs into the Chief Entrepreneur, so probably the CEO should recruit in another place.
What’s the Chief Entrepreneur responsible for?
He is responsible to manage the innovation agenda. The innovation pipeline. If the CEO is responsible to manage the financial P&L, the Chief Entrepreneur is responsible to manage the ideas P&L. He is responsible to track and review ideas, decide how to experiment on those ideas (internally, externally, …), and then scale successful ones into the core, or not. Sometimes the option is to start a ‘child’ business instead of trying to integrate into the core. Think about Elon Musk’s portfolio: Tesla, SpaceX, The Boring Company, and now an insurance company as well.
The Chief Entrepreneur is responsible to manage the portfolio of ideas. He is responsible to invent the future, today. He is responsible to bring the necessary acceleration and braveness to become an attacker — start-ups attack incumbents all the time and they don’t have a legacy. Start-ups have the speed, the ‘guts’, the will to challenge the status quo. Disrupt or you will be disrupted.
Speed and braveness is critical to stay relevant
If you are studying innovation, you probably know about the famous three horizons model. It’s a model that helps to organize initiatives/projects (among other things) into today, tomorrow and the future. In short, it tells you to manage daily operations and at the same time start exploring, smoothly, different business models that can be applied tomorrow (e.g. adjacent markets) or in the future (new needs, new markets, usually disruptive like the apple store was and the iPhone).
A good example of the three horizons is applying, for instance, an innovation lab approach to innovation. Horizon 1 is your organisation and you setup a fail-safe environment to play around with ideas. Is this fast enough? Or is this a shy approach? Is this still the famous R&D department? Probably. Steve Blank thinks so. In his most recent article, he explains why the three horizons model is almost dead — because today you are able to invent something new in days, not in years.
So, how do you cope with innovative threats?
Mr CEO, assume that it’s a matter of time (maybe 1–2 years) and you will be running into a serious problem. Or assume that you are already in a serious problem because, in fact, you are.
Be the one leading your disruption.
Do you want to learn more about corporate innovation?
Visit www.theinnovation.cafe and watch the Netflix of Corporate Innovation at www.youtube.com/theinnovationcafe
Do you need an Innovation Advisor / Strategist? Reach out to Hugo de Sousa via LinkedIn.
