Product innovation at for-profit businesses in the U.S. has declined. From 2016-18 to 2018-20, the rate of companies that reported introducing innovative goods or services dropped from 19% to 9%. This downward trend emphasizes the need for organizational leaders willing to think outside the box.
Leaders who innovate effectively think creatively and are able to innovate by engaging with many perspectives, including those that might not be traditionally part of their industry. Companies like Apple, Nike and P&G are successful as they fully embrace this innovative spirit.
In this blog post, you will explore the essential role of senior leaders in achieving innovation strategy within their teams and organizations. You will also learn how pursuing a Doctor of Leadership program can help cultivate the skills necessary to become a transformative leader.
Why Do Organizational Leaders Need to Be Innovation-Focused?
Organizational leaders must focus on innovation because it’s necessary for success in today's marketplace. Eighty percent of companies surveyed by Boston Consulting Group (BCG) said innovation is a top priority. According to BCG, the most innovative companies achieve superior financial results in the short and long term.
Innovation enables organizations to adapt and evolve, maintain a competitive advantage in a fast-moving world and improve employee engagement.
Transformation
Organizations are facing a disruptive market. Rapid technological advancement, increasing global competition and evolving consumer preferences are just a few challenges. Organizations invested in innovation evolve and stay relevant by embracing and adapting to change, especially amid market uncertainty.
Differentiation
Organizations need to be proactive in staying ahead of their competition. When they prioritize innovation, they can continually differentiate. The most innovative companies outperform others through new product development, markets and revenue streams.
Employee Engagement
Innovation and employee engagement also go hand in hand. Research shows that highly engaged employees perceive their organization as having an innovation culture. Organizations that focus on innovation can attract and retain employees motivated by opportunities to be creative.
Why Do Some Organizations Struggle with Innovation?
Organizations may struggle to innovate for numerous reasons, from misunderstandings about the required resources to misperceptions about the risk involved. Fostering an innovation culture is the first step in driving meaningful organizational change.
Superficial Efforts
Some companies engage in “innovation theater,” a term BCG uses to describe superficial efforts. They prioritize innovation but not in the most meaningful ways. For example, flashy workspaces and perks like unlimited snacks can enhance employee satisfaction but have little impact on innovation.
Irrelevance
Other organizations perceive innovation as irrelevant to their operations. They see it as taking place only in specialized spaces. As a result, they don’t attempt to integrate innovation, instead relying on other entities for innovative thinking.
Perceived Risk
Innovation can also be seen as too risky. This perception can lead to bureaucratic processes and extensive oversight, which stifles creativity.
Regulations
Industries such as healthcare, legal services and education may struggle with innovation because of strict regulations and large, bureaucratic systems. They can slow or even completely prevent innovation.
Leadership
Effective innovation requires leaders who embrace change and have the knowledge and skills to inspire it. Organizations need more qualified leaders to innovate.
How Do Organizations Develop an Innovation Culture?
Innovation effectiveness starts with building an innovation culture. According to BCG, organizations with a culture of innovation embrace risk, collaboration and personal autonomy—and are 60% more likely to be top innovators.
What exactly can organizations do to develop an innovation culture? They should approach innovation with purpose and recognize innovation efforts. Also vital are practicing intentional creativity, empowering leadership and building focused teams.
1. Purpose & Recognition
Developing an innovation culture begins by creating an environment purposefully designed to allow for innovative thought and collaboration. Organizations must link innovation to strategic planning so it's ingrained in visions and goals.
Another component of purposeful innovation is embedding behaviors that foster innovation into operations. They should recognize and reward the outcomes of innovation. For example, Discovery Group created semiannual innovation scorecards for company leaders, making innovation part of the organizational culture.
2. Intentional Creation
Effective innovation is intentional. Organizations need to define specific methods for ideation. The most innovative companies develop innovation ecosystems that integrate all innovation capabilities.
Open innovation is one framework. It strategically uses internal and external resources to create new ideas. In an open innovation culture, organizations harness insights from employees, customers, consultancies and other outside resources.
3. Focused Leadership
Organizational leaders drive innovation culture. First, organizations must determine who is responsible for innovation outcomes and their responsibilities. Then, innovation leaders need to clarify the duties of other organizational stakeholders and establish appropriate incentives and rewards.
Leadership ensures the free flow of ideas and knowledge, the integration of new perspectives and the continuous learning from successes and failures. All of these behaviors support innovation.
4. Empowered Employees
Ideally, everyone in an organization participates in an innovation culture. They should be empowered to spend time thinking creatively about specific problems. Cross-functional teams are another way to engage employees in innovation because they improve collaboration and communication.
3M implemented a rule that allows employees to spend 15% of their time on side projects. As a result, one-third of the company’s sales are from products invented in the past five years.
How Can Organizational Leaders Best Support Innovation Strategy?
Senior leaders who achieve leadership strategy effectively have a combination of conceptual, technical and interpersonal skills. Growing in all three areas enables them to best support the people and processes that affect innovation performance.
Conceptual Skills
Organizational leaders with strong conceptual skills can navigate complexities in dynamic environments. The following conceptual skills are vital for driving innovation:
- Strategic Thinking: Developing a clear vision for innovation strategy based on reasoning and aligning innovation strategy to goals.
- Problem-Solving: Thinking critically to identify and define the challenges that innovation will address, then testing and refining solutions.
- Creativity: Applying new perspectives, experimenting and generating novel ideas to deliver organizational value.
Technical Skills
Technical skills refer to the ability to understand and implement the methods, processes and equipment for carrying out organizational activities. For innovation leaders, communication, data-driven decision-making and managing others are key to effective innovation.
- Communication: Articulating ideas accurately and effectively in verbal and written contexts, facilitating open dialogue and building productive relationships.
- Data-Driven Decision-Making: Making informed decisions by analyzing data to evaluate the impact and feasibility of ideas, including market trends, customer feedback and performance metrics.
- Managing Others: Building collaborative and cross-functional teams, empowering individual autonomy and providing actionable coaching and feedback.
Interpersonal Skills
Innovation leaders need strong interpersonal skills to build positive working environments. They employ empathy, collaboration and self-awareness to help creativity thrive.
- Empathy: Listening to and considering others’ ideas, concerns and perspectives without judgment.
- Collaboration: Exhibiting self-respect, respect for others and the ability to work independently and cooperatively.
- Self-Awareness: Reflecting upon, understanding and editing one’s presentation and behavior, adapting as needed.
Transform Your Leadership with Spalding University’s Online EdD in Leadership Program
Leaders who aspire to guide lasting organizational change can grow their influence by advancing their leadership competencies. Obtaining a Doctor of Education (EdD) in Leadership is a formal educational pathway for accomplishing precisely that.
In the online EdD in Leadership program at Spalding University, you will gain the leadership skills to lead strategically and ethically across various roles in educational, business, nonprofit and public leadership.
Spalding’s online EdD in Leadership immerses current and aspiring leaders in a collaborative, interdisciplinary and globally conscious program. Designed to cultivate transformative leaders, it delivers intensive courses one at a time, enabling candidates to earn their terminal degree while working full-time, graduating in under two years.
As a student, you will develop universally relevant leadership skills across four competencies:
- Advanced Leadership Concepts in Practice: Evolve your leadership approach by analyzing traditional and modern theory and through personal development.
- Global and Cultural Perspectives: Develop a sophisticated awareness and understanding of cultural differences in local, national and global contexts to evolve your leadership practices.
- Organizational Innovation and Change: Use proven methods and systems thinking to facilitate innovation and influence organizational transformation.
- Research-Informed Decision-Making: Apply research-based best practices and methodologies to support impactful, data-driven decisions, as demonstrated in a final capstone project.
With your doctorate in leadership, you’ll stand out as an exemplary ethical leader, exceptional team builder, systems thinker and catalyst for innovation in a global economy.
Spalding supports you wherever you are in your leadership journey. Getting your EdD in Leadership from Spalding can help you inspire change in your workplace and community. Connect with an enrollment advisor to get started.