Innovator's Dilemma - Esse Quam Videri .... & the emerging Chief Innovation Officer

From a current inc.com story: "... at the country's fastest-growing companies, you see a new kind of CIO springing up. Not the "information"-warden-type CIO, but rather, a Chief "Innovation" Officer. It's a sign that corporations and governments are wringing their hands and sharpening their focus, all on the hunt for new ideas."

Now decades into globalization, the mountains and valleys of differentiated costs for producing at better margins (facilitated by free trade agreements that toppled tariff barriers, communications technologies that allowed access to inexpensive human resources in emerging nations, as well as policy agreements that opened access to inexpensive nations that do not support full freedoms and liberties) are gradually leveling off globally (i.e.: outsourcing firms based in India are scrambling to find cheaper human resources in 2nd & 3rd tier remote Indian communities, as well in lower cost of living areas of impoverished Eastern Europe ... in response to competitive pressures from outsourcing firms in Vietnam, China and other lower cost of living areas).

Recorded history is fundamentally about development where "building-up" areas present bigger and better opportunities than "built-up" areas (i.e.: a new bridge project provides opportunity for jobs - until the bridge is completed ... then bridge workers must either find the next bridge project or change careers). On the macro level, peoples have migrated from homelands throughout recorded history to find opportunity to earn income.

In the USA, the American Heartland started to be coined 'The Rust Belt' back in the 1970s as the ripple effect of the OPEC oil embargo began to change the economics of everything that depended upon the this natural resource beginning primarily with the automobile industry. Pressure grew to offset the cost-shock increases in oil (including the igniting of the domestic Sun Belt boom as businesses and homeowners considered relocation based on the escalating factor energy costs were having on budgets). Besides domestic relocation to warmer climates (often with local break tax incentives as well), from automation innovation to process innovation (then eventually international relocation/off-shoring which really began to accelerate in the 1990s), the nation that evolved over generations to eventually have one of the world's highest standards of living was now ripe for economic alternatives (again, also facilitated by the emerging and embraced notion of globalization). The latest example of a historical pattern repeating again.

The inc.com story's mention of the emergence of the new CIO (Chief Innovation Officer) is evidence that the decades old approach to cost reduction innovation via Chief Information Officer focus is beginning to run it's functional life cycle. Longer term, assuming relatively open global free trade, regional cost advantage gaps will continue to narrow ... putting increasing importance on growth to pivot from the late 20th Century's generational focus on cost reduction innovation ... to pure new product innovation.

While Steve Jobs has been heralded as our generation's Edison, do not fail to also understand that Jobs was a do-it-cheaper zealot beginning with his computer in the 1980s when he demanded his folks produce a desktop that had the power and functionality of a $12K device ... for about $5K (still pricy at that time but point being that even the great innovator Jobs viewed cost advantage as vital). To many, Jobs' greatest lesson may have been his differentiated approach to totally controlling end-to-end with in-house/turnkey ecosystems ... what one could call process innovation.

Of course Jobs' products were innovative as well ... but from my vantage point, I sat in AT&T HQ planning meetings back in the 1980s where we envisioned and began planning for how to get legacy IT infrastructure to support the inevitable multi-functional hand held PDAs. Jobs wasn't the only one who saw the need and envisioned the ideas manifested in the iPhone, but Jobs had the ability to control his company's climate to facilitate seizing opportunity in this area better and faster than corporate telecom titans who had at least 3 strikes against them:

1) Back to Clayton Christianson's concept in his book 'Innovators Dilemma' that is fundamentally about the business politics of self cannibalization (creative destruction) that stalls innovation until the last drop is squeezed out of the turnip/business plan of the prior innovation (a strategy that's fine if you have no competition),

2) Post deregulation break-up challenges to be competitive, and

3) Chasing the financial ghost that at the time was MCI/Worldcom ... the historic corporate financial fraud that handicapped/severely wounded the telecom industry's ability to innovate because relentless cost cutting into bone was the priority-order from on high for years in response to trying to meet shareholder/investor demands as all were fooled by the criminal financials perpetrated by MCI/Worldcom's deceitful leadership.

As the 4 year old Great Recession continues with continued record unemployment, real estate values continuing to plunge, about 100 more US bank closures in 2011, ominous signs from the EU and beyond, the emerging Chief Innovation Officer will have one of the most important roles in the 21st Century and beyond to help get out of the current global economic quagmire and envision not only new products, but innovative policy and strategy to facilitate sustainable long term growth, as well as the broader challenge to evolve business thinking, investor thinking in terms of paradigms that define true, sustainable success.