The Importance of Corporate Innovation and the Chief Innovation Officer Role in the age of AI

In the era of Artificial Intelligence, Innovation is becoming a critical function for every company — regardless of its size, market, or geography. With the accelerated pace of change, streamlined business operations, and easier access to information and knowledge, competition will be getting tougher and the only real differentiator for companies will be their ability to innovate, continually. This race for differentiation and market share will put the Chief Innovation Officer on the spot — as the orchestrator of an always-on, effective Innovation Function.

Artificial Intelligence is entering into every aspect of human life. Very soon, daily habits like searching online, learning, creating content, consuming news, or collaborating online will start changing — drastically. Especially in our professional and business worlds, generative AI and applications powered by AI will impact the professional status quo in previously unthinkable ways.

The (obvious) impact of AI on business activities

With the assistance of Artificial Intelligence, a vast number of activities — primarily those that are already digitized — will be performed at a fraction of the time and effort and with good enough results (compared to ‘legacy’, manual methods). To give you a sense of the impact, for certain tasks, AI will be able to deliver sufficiently good results in minutes (literally) versus days (or more) that a human professional (or a team) would need.

Consider for example, how AI-powered tools such as Microsoft Copilot will change the typical ways of working. Copilot integrates AI into existing digital tools and experiences and further empowers typical Office and collaboration features — offering unprecedented speed and easiness in performing various non-trivia and, in many cases, quite sophisticated tasks such as drafting documents, creating presentations, summarizing text, helping with managerial tasks and, many, many more.

The (less obvious) case of AI performing creative tasks

But even for creative activities (that until very recently we thought were future-proof and ‘safe’), AI is now becoming superior to humans: Artificial Intelligence can now design, visualize, write code, debug software systems, and even generate business ideas and compile business plans! In all these cases, and many more, Artificial Intelligence is taking the lead — producing answers, providing information, creating digital artifacts, or performing labor tasks through robots and robotic systems (e.g. in a warehouse or a production line). And all these in an impressive, super-fast, and ever-improving manner.

Artificial Intelligence taking over Business Intelligence

As AI is becoming smarter in mathematical reasoning, the impact on business management will be rather dramatic. AI will be able to understand data models, schemas, entity relational diagrams, reports, and all the data objects that are typically found in a modern Business Intelligence environment. Moreover, AI will be capable of understanding the data representing essential business activities — it will be able to obtain the big picture by processing vast amounts of internal and public domain data.

Consider, for example, the scenario where a company connects a modern AI system to its data repositories — e.g. a Datawarehouse or a Data Lake and its Business Intelligence infrastructures. Artificial Intelligence will be able to ‘comprehend’ the massive amounts of data that typically ‘live’ there (volumes of data that are often considered unmanageable and rarely used in meaningful ways). It will be able to cross-analyze these data with content from the public domain and the broader ecosystem and start spotting opportunities, issues, macro trends, and other correlations — adding a new layer on internal corporate data and redefining functions such as Business Intelligence, opportunity discovery, and business decision-making in general.

A new operating model for businesses

The AI revolution has a massive impact on the operational model and the organizational design of companies with cascading effects at the market level, the supply and demand of certain skills, the startup ecosystem, and the dynamics of the market in general.

As Artificial Intelligence gets integrated into the typical digital platforms and tools used in a typical business environment, most processes will get streamlined and at least partially automated, resulting in smaller teams and more compact organizational structures able to produce the same work with less effort, and faster.

Taking into consideration the easiness of adopting AI technologies and the apparent economic benefits (more automation, better decisions, lower costs of running the business), companies will start embedding it into their core operating model. This new reality will lead to simpler, ‘optimized’ organizational structures, and smaller teams with various roles merged or even eliminated (The significant risk of massive technological unemployment is discussed in detail check this article)

As AI will be streamlining and accelerating various business tasks, teams will shrink in size and companies will become smaller in terms of Full-time employees.

A new form of corporation

In the ending notes of my first book - The Innovation Mode (Springer, 2020), I described the ‘corporation of the future’ as a platform for innovation. More specifically …

“… . in a fully digitized environment, powered by Artificial Intelligence, operational aspects get streamlined, efficient and eventually fully automated. The distinct parts of the organization connect to a digital backbone in real-time, forming a ‘living entity’ that captures signals from its environment, consumes information, decides, and reacts. In this environment, the focus shifts from running the business to pursuing opportunities.

In the organization of the future, effective leadership will be about directing and fine-tuning the innovation machine, a complex system that converts signals to ideas and then opportunities to realized innovation; in a fast, adaptive way.

In this system, humans will play a substantial role in forming opportunities through business creativity — one of the few areas that AI hasn’t outperformed us, yet.”

This AI future is here. As the typical operations and internal functions of a corporation become streamlined, automated, and easy to clone and replicate from any company — established or startup - innovation will become even more important: Companies will have to invest in their ability to conceive, validate, and pursue new opportunities fast and at scale.

The company of the (near) future will need an opportunity discovery function — a capability allowing rapid identification of new opportunities and fast validation, testing, and informed decision-making. This will embed opportunity discovery into the operating system of the business and will allow for smart decisions that balance risks and potential in alignment with the strategy of the company; an always-on innovation system enabling continual experimentation and testing of new products, services, and ideas.

The (empowered) role of Chief Innovation Officer

In this context, the Chief Innovation Officer becomes even more important — a critical role that orchestrates the Innovation Function and empowers the company to discover opportunities, experiment and make the right calls for taking high-potential, validated products and services to the market.

We are entering an era of continuous innovation led by the Chief Innovation Officer. The CINO and the Innovation Team will play a critical role in the age of AI, and the corresponding skills will be soon in high demand, from every corporation.