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Dawn Of The Idea Czar


Billy Edwards' colleagues at Advanced Micro Devices Inc. (AMD) have called him their utility infielder. AMD's human resources chief Kevin Lyman calls him the chipmaker's agent provocateur. Officially, though, Edwards is called AMD's chief innovation officer, a newly created role for this senior vice-president.

Although Edwards, 50, has a PhD in materials science engineering and has worked around semiconductors for much of his career, he has also headed up strategy at the Sunnyvale (Calif.) company, run a startup, and worked as a consultant for The Boston Consulting Group. So when AMD formalized a role that would lead its innovation effort last September (or, as Lyman describes it, "put an 'X' on the back of someone to consciously drive it"), Edwards' diverse experience, gregarious personality, and penchant for disrupting traditional ways of thinking fit the bill. "A chief innovation officer needs to be this blend of marketer, technologist, strategist, and business person," says Lyman.

In other words, Edwards' new role goes far beyond dreaming up the next chip iteration for AMD. Rather, he'll be spearheading audacious projects that don't neatly fit into any of the company's current functions. One such example is AMD's 50 x 15 initiative, with its goal of getting Internet access to 50% of the world's population by 2015. He's also experimenting with ways to teach AMD engineers to imagine a wide range of scenarios, in an effort to reframe what he calls their "mental maps." And he's sponsoring contests for students to design technology solutions for the world's low-income populations, a vast and potentially huge future market for the company. "When people think about innovation, they think about inspiration, which is a little single-dimensional," says Edwards. "The most powerful [innovations] cross a lot of boundaries."

NEW HYBRID

A thirst for internal growth across Corporate America has made innovation a critical management mandate. As a result, the initials "CIO" have increasingly begun to refer not to chief information officers but to yet another C-suite label, the chief innovation officer. That and similar titles, such as vice-president of innovation, are popping up in companies from Citigroup (C) to Coca-Cola (KO) to health insurer Humana (HUM). Titles of this magnitude send a clear message to the organization: Innovation is an urgent priority and someone should be accountable for it. Most of the large executive search firms are reporting a dramatic uptick in requests for such people. Heidrick & Struggles International Inc.'s (HSII) Jane M. Stevenson, who heads the firm's global search practice for chief marketing officers, says she has seen a fourfold increase in these positions in the last three years, with most of that growth coming in the last 18 months.

While companies have long had VP-level scientists running research and development, or marketers steering new product development, these innovation chiefs are a new hybrid breed. If they don't directly report to the chief executive, they typically have direct access and, like Edwards, their jobs are more broadly defined. As companies continue to figure out just what innovation is, managers charged with running it have seen their responsibilities evolve. Rather than encompass only new products, innovation has come to include everything from finding new business models and fresh ways to glean customer insights, to shaping a more creative corporate culture.

The structure of the role varies widely: Some CIOs have sizable teams while others are more like internal consultants, and the job may be most closely tied to strategy, marketing, or R&D. Tierney Remick, a managing director with executive search firm Korn/Ferry International, says most of the innovation officer-led teams she's seen have started small and grown over time as the responsibilities of the role have expanded.

That's the case at Humana, which named its chief medical officer, Dr. Jonathan T. Lord, to the newly created post of chief innovation officer in 2001. Initially, Lord's approximately 15-person team was formed to find new innovations for Humana's core insurance products. "It was a smaller team, a smaller scope, and a narrower agenda," says Lord.

But over time, Lord's team, which is housed on the company's "Innovation Center" floor in its Louisville headquarters, has itself become a corporate function. The team has swelled to 150 employees, many of whom Lord has recruited from places like General Electric Co. (GE), Procter & Gamble Co. (PG), and the defense industry, with an eye toward bringing in outsiders' perspective and expertise. Lord now keeps a hodgepodge of corporate initiatives under his umbrella. Among them: ethnographic consumer research, external partnerships, and, beginning last year, mergers and acquisitions.

As Humana shows, there seems to be a place for innovation czars at companies of all stripes, but they are particularly hot in the food and consumer-goods industries. P&G, Kellogg (K), Hershey (HSY), Wm. Wrigley Jr. (WWY), and Newell Rubbermaid (NWL) have all added high-ranking innovation execs to their lineups in recent years. A CIO role is also becoming more common in mature companies looking for a boost to their revenues. "Companies that are still emerging through rapid growth tend not to need a separate [CIO] because most often the CEO is still the chief innovation officer," says Heidrick's Stevenson. "It's the more mature companies where perhaps [innovation] no longer remains the focus."

"SILVER-TONGUED"

According to headhunters, candidates with marketing backgrounds are filling more of the newly created CIO positions. Although some level of technical knowhow -- or a lot, at a tech company such as AMD -- confers credibility in this cross-functional gig, CIOs have to be able to sell high-risk new ventures throughout often-skeptical corporate fiefdoms. "Marketers are typically pretty silver-tongued," says Greg Welch, who heads up the marketing officer practice for executive search firm Spencer Stuart. "They know how to whisper 'this is our initiative' to the CEO and [win support] more so than some 20-year R&D person."

Whether the CIO is a battle-tested company vet or a fresh-thinking outsider, idea generators with little experience implementing them aren't right for the role. That's one reason why Yankee Candle Co. (YCC) chose veteran brand manager Rick R. Ruffolo when it expanded its chief marketing officer role to link R&D, brand strategy, and marketing. Before arriving at Yankee Candle in September, Ruffolo had launched new product lines for Limited Brands' (LTD) Bath & Body Works and managed brands at S.C. Johnson & Son and P&G. Now the product development and marketing departments report through Ruffolo, whose business card reads senior vice-president of brand, marketing, and innovation.

If that title's a mouthful, consider the multifarious duties that confront Ruffolo: establishing a more disciplined way to evaluate and execute ideas, meeting with operations about innovative manufacturing processes, and scouting global markets for new devices to deliver Yankee Candle's fragrances. "If it was just a purely innovation role, I might just run after all these different gadgets," says Ruffolo. "But by linking it to a senior management role, it's not innovation for the sake of innovation."

For Ruffolo, the chief innovation post meant a higher level of seniority; for Lord, becoming a CIO was largely an expansion of his responsibilities. Still, the CIO job is hardly an established rung on the standard-issue corporate ladder -- and the risk of failure is high. But able candidates are drawn by the position's high visibility and the rewards that could accompany any successes. "If they're incubating truly new businesses, they could ultimately go run [one of them]," says Spencer Stuart consultant Cathy Anterasian. "That's very exciting."

By Jena McGregor, with Amy Barrett in Philadelphia


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