Innovation: Does leadership make a difference?

Many organisations recognise the need to innovate but find it challenging to deliver any real outcomes. A question I was recently asked was does leadership behaviour or style make a difference to an organisation’s ability to innovate?

Intuitively, many of us think that it should make a difference. But what does the research show and what types of leadership behaviour or capabilities are required?

The short answer to the question is yes; research indicates that leadership behaviours do make a difference and potentially a big difference. Not only is a leader’s support and guidance required to stimulate innovation efforts at the initial creative stage, it is also needed to create the organisational climate for successful implementation of innovation. As an example of the research, Mumford and Licuanan studied health care teams and concluded that where teams lacked an identifiable leader, process innovation suffered.

The long answer is more complicated because innovation is a complex process and leadership is one of many factors involved.

Leading innovation through the process of idea generation to innovation outcomes requires a versatile leader who has the ability to invoke creative leadership and operational leadership.

In the early stages of the innovation process, a creative leadership style that creates an environment of experimentation, encourages openness and risk-taking, and develops both human and social capital is essential. However, once an idea is ready to go to the next stage of development and commercialisation then an operational leadership approach is needed to drive innovation processes. Of course, in many cases a leader will have many projects in multiple stages and so will need to switch styles frequently which requires situational and self-awareness.

Research by Makri and Scandura in high tech firms indicates that leaders who can simultaneously “explore and exploit” will develop firms that outperform those that focus on one at the expense of the other.

Like most complex issues there are other factors to consider, many of which are also under the senior leadership team’s control. Two other key areas to consider are management levers and business processes. For example, does the organisation structure and systems support the type of innovation required. There are many types of innovation, not just product innovation. For example, Dell transformed the PC market not by product innovation but by business model innovation. Other organisations innovate in business processes to achieve competitive advantage. Not all innovation is radical or disruptive and so it’s essential to understand what the organisation is trying to achieve and set a clear mission for the innovation efforts.

In terms of business processes leaders need to evaluate if the organisation’s project management tools, processes and capabilities are sufficient to deliver innovation projects or review how projects identified, resourced and funded. Many good ideas never see the light of day as they didn’t reach the right level of decision making in the organisation so having a way of flagging ideas up through the organisation is also important.

If an organisation is aiming to increase its innovation capability leadership development is not a bad place to start. Increasing leaders’ understanding of innovation and developing the appropriate style and behaviours for their organisational setting can be a big step in the right direction.

Email us for more information on our innovation leadership programmes or please join us at our upcoming breakfast seminar with Deloitte where we will explore the topic in more detail.