Strong leaders drive innovation in successful organizations

Tags: talent management

Innovate or stagnate might well be the mantra for many companies, and whether they move ahead or tread water depends, in large part, upon the leadership of the organization.

Indeed, innovation and creativity are essential to success in today’s economy.

Managing innovation often challenges existing ways of doing things and is a complicated process. As a result, leaders have to tightrope the innovation vs. “if it’s not broke, don’t fix it” wire.

Savvy business leaders understand that creating new products, services or operating procedures is both expensive and time-consuming for an organization, yet can be vital to long-term survival, says Michael D. Mumford, a distinguished research professor of psychology at the University of Oklahoma.

He cites companies like 3M, DuPont, General Electric and IBM, all great innovators of American business, as existing today because of innovations that benefited them long term.

Ideas and creativity, says Mumford, occur as the result of collaboration; people getting together to make ideas grow. An innovative product or service is not just one idea; rather it can be many ideas added to the original proposal. That’s why collaboration is essential to creating new products and services.

An effective leader will force collaboration if it does not already exist, he added. In fact, says Mumford, leadership matters more for innovation than in other areas of the organization.

“The critical thing that leaders do is to motivate and inspire people,” he says. “They will identify areas worth exploring and put together product development teams for long-term gain.”

A leader needs to define problems and outcomes as well as to clearly espouse a mission; creative people work best when they believe in the mission.

Also, an organization’s leadership must create a culture of innovation, where the development of new ideas and processes is encouraged and not considered a waste of time.

To do that, says Mumford, requires a certain amount of courage on the part of leaders.

“After all, most new ideas fail. The literature estimates no more than 10 percent of new ideas are workable, yet the figure is probably closer to one percent,” he says.

So, why do organizations emphasize innovation? Because strong leaders are aware of the need to change and to get new products into the pipeline. They must be willing to make changes, even when things seem to be going well, according to Mumford. “They are looking at long-term survivability and realize the cost of innovation outweighs any short-term benefits.”

While some would say that is a risky way to operate, Mumford says successful companies follow a planned, long-term view of risk. Sometimes they are willing to kill an old product line in order to bring in a new one. “It is not risk tolerance, rather it is a controlled relationship to risk,” he says.

The identity of many companies, large and small, is built on being innovative and forward thinking. Yet, innovation doesn’t necessarily have to lead to a breakthrough product; rather it could be as simple as a new way of doing things, fine-tuning an existing procedure or providing a new service. The end result, though, creates value for both the organization and its customers.

Mumford says innovative leaders are highly involved in the creative process, setting direction and providing feedback. Characteristics of innovative leaders include expertise, intelligence and critical reasoning, creative thinking and skills to implement processes, openness to new ideas, self-discipline and an awareness of the business environment, both external and internal. They also need to be skilled in appraising people’s strengths and weaknesses, so that the right people are in place to effect change.

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