Organizations led by 'inventor CEOs' produce higher-quality innovation: report


The quality of an organization's innovative output has a positive correlation with the installation of a CEO with a proven track record of high-impact inventions, a recent report suggests.

The report, published in the Journal of Financial Economics, studied nearly 1,000 CEOs at high-tech companies in the U.S. Approximately 20 percent were listed as an inventor on at least one patent, and were thus labeled "inventor CEOs." The report's authors then examined each organization's history of patented technologies, looking at both quantity and quality.

"We found that inventor-led companies were not only awarded more patents, but these patents were commercially more valuable and scientifically more influential than patents awarded to non-inventor-led firms," the authors wrote in a follow-up article for the Harvard Business Review.

The correlation was further proven by the authors' findings that the volume and impact of companies' patents "significantly declined" after an inventor CEO's departure. They concluded, "Whatever the underlying reasons behind the success of inventor CEOs, our evidence suggests boards of directors at high-tech firms should pay close attention to the inventor credentials of any potential CEO. They may bring unique innovation-enhancing capabilities to the role."

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