SXSW Experience

I had the great honor and pleasure of speaking at South by Southwest in Austin on Saturday. The room was packed to participate in a discussion on the rising role of the Chief Innovation Officer.

I set the stage by giving my hypotheses for the increasing demand for organic growth from innovation. For the past thirty years large corporations have employed two macro strategies for growing both the top and bottom lines.

The first is expanding distribution globally. Large multinationals have become even more global as they have expanded into market after market around the world. This has often required adapting products and solutions for local markets, and sometimes developing products in market to meet local demands. This has been a very successful strategy for increasing revenue, but eventually these organizations run out of new people to sell to. Until we open up interplanetary markets, the whole world is all we got.

The second macro strategy is the drive for greater levels of efficiency. This approach has improved profitability and allowed firms to increase the bottom line. Starting in the 80s with the reengineering revolution through six sigma, outsourcing, automation, and investments in integrated enterprise systems, these trends have also been wildly successful at increasing productivity and growing the bottom line.

Both of these strategies are nearing the end of their useful lives. Global distribution is limited by the size of the globe and there is only so much blood that we can squeeze out of the efficiency turnip. Progressive organizations are realizing this and are increasingly turning to growth from innovation to replace these strategies for delivering both the top and bottom lines.

This is one of the explanations for the rapid rise of the Chief Innovation Officer role and the overcrowded room at SXSW. In 2012, 43% of large organizations had an executive with accountability for delivering innovation results. That was up from 30% just a year earlier. Growth from innovation is hard. The Chief Innovation Officer is responsible for making it happen. The imperative is clear.