This post was originally written for the Harvard Business Review.
The best CEOs are excellent at growing and running a company within a known business model. What they don’t do well enough is reinvent and innovate. It’s not because they’re incompetent, they just fall short at the task.
Sure, there are exceptions who are both visionary CEOs and innovators — Steve Jobs and Jeff Bezos, for example — but there are very few companies that can stomach that sort of leadership.
So if the CEO isn’t someone who can innovate, then who should? It’s a question that I’ve discussed with Lean Startup founder Steve Blank and business thinkers such as Yves Pigneur, Henry Chesbrough, and Rita McGrath. We believe that CEOs need a partner for innovation inside their companies, someone who will create and defend processes, incentives, and metrics that encourage radical ideas and find new areas for growth. It’s an executive who can help large companies reinvent themselves while they’re still successful. And this new role needs to sit in the C-suite.
You could call this person the Chief Entrepreneur (CE) — someone who can lead the future of the company while the CEO takes cares of running the existing business. This is a huge divergence from the traditional norm for chief roles, but the CE is a necessary position of power to ensure that a company innovates.
But how do you hire for the role? Where do you look? What qualifications must the candidate have? I’ve written up a job description below to make the search easier for Fortune 50 companies:
Are you a Chief Entrepreneur?
Fortune 50 company seeks a Chief Entrepreneur who will build the future. The Chief Entrepreneur will be responsible for managing a portfolio of entrepreneurs who experiment with new business models and value propositions. The candidate is someone with a passion for taking calculated risks. This is not a CTO role or a role that reports to the CEO. The Chief Entrepreneur is an executive as powerful as the CEO, with clear leadership over radical innovation within the company.
Look at the list below and see if any of this connects with you:
- You’re passionate about building businesses. You produce growth engines with calculated bets, not “wild-ass gambles.”
- You believe anything is possible. You persevere. You have the charm, charisma, enthusiasm, hard work, and marketing mind to encourage and drive your teams to think anything is possible.
- You’ve built a $1 billion+ business from nothing. You’re especially valuable if you’ve met these figures in a large corporation.
- You’re comfortable with uncertainty. You don’t fear failure. You see failure as an opportunity to learn and iterate toward a solution.
- You’re tremendously diplomatic. You address conflict head-on with one focus in mind: secure the money and resources you need to test your ideas.
Sound like you? OK, now let’s consider your day-to-day tasks.
What are your responsibilities?
- Build the future for the company. We cannot stress this enough. The CE is responsible for developing new business models and value propositions for the company’s future growth.
- You guide and support your own team of entrepreneurs. You’ve been here before and you have knowledge to share. Your team will be searching for and validating business models and value propositions around opportunities for growth. This means managing entrepreneurs who can navigate trends and market behaviors.
- Design/construct a space for invention. You are responsible for creating the habitat for your team to experiment, fail, and learn. This is an additional culture where ideas can be thoroughly tested. You must defend the culture, processes, incentives, and metrics that are born in this space.
- Introduce innovation accounting. You must develop a new process that measures whether you’re making progress in building new businesses. How are your experiments helping your team to learn, reduce uncertainty and risk, and move forward?
- Establish and nurture a partnership with the CEO. You will have to work with the CEO to ensure resources and assets are available to validate or invalidate your ideas. You will be responsible for building a partnership to discuss progress and share new ideas. Communication will be key to this partnership because the CEO is the person who can help finance your future experiments. You will also recognize the importance of handing over a validated business model that demonstrates opportunities to scale.
- Report your progress directly to the Executive Chairman of the board of directors. You do not work for the CEO, or alongside the CTO, CIO, and CFO. These roles are mandated to keep the existing business in good shape. If the CE reported to the CEO, then the CEO could veto potential ideas in order to reserve resources and safeguard the company against failure.
Today’s corporate world needs more ambidextrous organizations: companies that execute and innovate at the same time. This setup will be hard to understand and realize because of the immense power that the CEO role has held for decades. But as Steve Blank points out, every large company must face the reality of continuous innovation and disruption or risk becoming obsolete.
There’s no doubt that the CE and CEO are going to experience conflict. But with a bit of patience and perseverance, this new role can be successfully integrated into an existing corporation. Potential CEs may already exist in many companies — we just don’t pay attention to their traits or give them the chance to lead innovation. This person might even be you.