CIOs Can Be Chief Innovation Officers, Too

We’ve all noticed that CIOs are acquiring responsibilities outside of IT. Examples include David Johns of Owens Corning (CIO and chief supply chain officer), Sheleen Quish of Ameristar Casinos (CIO and SVP of HR), and Karl Salnoske of GXS (CIO and EVP of service delivery).

But an even more interesting dual role has emerged that I call the “CIO squared”—the combination of chief information officer and chief innovation officer. Examples of the CIO squared include Tim Stanley, former CIO and senior vice president of innovation, gaming and technology at Harrah’s Entertainment; and Ben Allen, who is both chief innovation officer and chief information officer at the professional services firm Marsh and McLennan.

The chief innovation officer position is less than a decade old, and most companies still don’t have one, so there’s certainly no predetermined place within the corporate structure where the role should be located. The position is meant to ensure that there’s someone to shepherd innovation activities (ideas, processes and incentive programs) and be responsible for the success or failure of innovation.

Given today’s business trends, the CIO-squared combo makes a lot of sense. With the rise of social media, mobility, the consumerization of IT, big data, and business intelligence, IT-centered innovation is growing. IT leaders are well positioned to sit at the hub of discussions with the heads of business units and departments about the sources of innovation and the technology to support them.

Trends within the IT department also make CIOs suited to be the shepherds of innovation. Success in innovation requires the ability to rapidly prototype and incubate ideas so they can be tested by internal and external users of the ideas. Moreover, leading IT departments have begun to incorporate agile practices, which focus on iterative development and iterative validation of ideas.

Stanley came to the CIO-squared position at Harrah’s from the IT side, albeit a very business-savvy IT side. He drove a lot of the advances in Harrah’s legendary CRM system, called Total Rewards. As a result of managing and synthesizing the data that helped the marketing department make better decisions, Stanley developed a true business perspective, calculated the ROI for almost all IT investments, and proved the business value of IT. By speaking with leaders from across the business about needs and strategy, he was able to identify where IT could make investments that would provide the highest value.

Allen came from the innovation side. He was CEO of Kroll, a former operating company of Marsh and McLennan that was sold to Altegrity in mid-2010. Allen rejoined Marsh and McLennan last May as its first chief innovation officer, with a mandate to partner with leaders at the firm’s various operating companies to create market-driven products and services that help drive growth for the firm as a whole. In September, he was named chief information officer, in addition to his innovation post.

“It’s a natural dual role,” Allen says, “particularly in businesses where information is central to the creation of value for clients. In the Marsh and McLennan family of companies, we provide advice to clients and that advice is based on three things: the expertise of our people, information or data, and analytics.”

As the chief information officer role becomes more strategically important, and as CIOs become more focused on delivering tangible new value to the businesses and customers they serve, we may see more cases of CIO squared.

Peter High is president of Metis Strategy, a CIO advisory firm, and author of the book World Class IT: Why Businesses Succeed When IT Triumphs.