The Role of Leadership in Innovation

Now more than ever, companies are putting more attention to innovation that make their products and services more competitive, thereby enable them to survive and flourish in the changeable and challenging global environment. Innovation is regarded as a key driver of competitive advantage in organizations.

Innovation is defined as the first attempt to carry out a new creative idea, and translate it into practice. However, it isn’t easy; it’s a difficult and complex task. There are two primary factors influencing the success of innovation: technical resources (people, equipment, knowledge, money, etc.) and the abilities in the organisation to manage these resources to encourage innovations.

Organisation is a kind of breeding ground for generating creative idea and capturing new opportunities. An innovative organisation has several key components: appropriate structure, effective team working, external focus, leadership, key individual, creative climate and etc. All the factors are absolutely essential.

All innovative organisations needs leadership at every level. There is a positive relationship between leadership and innovation. There are increasing evidences to prove that unique leadership asserts great importance to innovation efficiently and effectively. In an organisation, half of the changes in performance are attributable to leadership directly and indirectly. Steve Jobs, the CEO of Apple, who has led Apple to become the giant in the technology market with innovative products, is a typical example to illustrate how important and influential of leadership to innovation and creativity, in order to make his organisation a household name within the industry and worldwide alike. Leadership is becoming more and more popular nowadays. There are cases about how a CEO joining a badly performed company makes the company stop losing money and even regain profit in few years time. And with successful leadership, company has successfully developed a new product. Undeniably, leadership capabilities are the paramount element to sustain an organisation to top the innovative rank and achieve remarkable revenue.

What is Leadership?

There are many definitions of leadership. Leadership can be viewed as a group process rather that a role, which is conducted by the group leader through leading and managing his or her followers to influence the process so that they can successfully accomplish their tasks and meet desired common goal.

No matter the size of a company or an organisation, leadership is vital. With poor or no leadership, an organisation will be chaotic. Plenty of examples show that strong leaderships can reverse the worsening business situation. Apple former CEO John Sculley replaced Steve Jobs as the new Apple CEO in 1985 with a high salary plus big bonuses guarantee. During his tenure, he made a big mistake that was to give Microsoft the authority to use Apple Macintosh graphical user interface in Microsoft’s windows operation system. The wrong decision opened the door to Microsoft’s Windows Vista and Window 7 operation system, for which the graphical user interface is similar to Macintosh’s look and feel, to compete with Apple, and resulting in the latter losing in the lawsuit of plagiarism. Also because of his inaccurate perceptions to Apple’s product line, Apple launched the world first PAD Newton, which produced disastrous sales because of the high price and bad software problems. Under his leadership, Apple’s market share and stock prices continued to slide, and could not recover for several years until Steve Jobs took control of the Company again. Similarly, 3M is known for years as an innovator. However, several years ago, under the leadership of former CEO James McNerney, 3M shifted its strategy from innovation to quality control by implementing Six Sigma. Thousands of budgets were cut, hundreds of R&D engineers were laid off, and many innovative projects were suspended. Although 3M had had a sound financial balance sheet at the beginning of his tenure, however the long-term damage is detrimental to the whole business. 3M has slided downward from the top rank of innovator ever since.

Type of Leadership

Leadership may touch on all the employees in an organisation, and can be found in every level. There are two different forms of leaderships, which are assigned leadership and emergent leadership. The people get the formal position to be a leader in an organisation, such as the team leader, department manager, CEO, etc, which are called the assigned leadership. Nevertheless, those people with nominal position sometimes are not the real leader but a figurehead for the team in some particular circumstances because of the lack of sufficient personal competence. On the opposite, some people who have not been officially assigned to a leader position, but they perform as a leader with the chief characteristics for a real leader, they can take the challenge to fulfill the team goal, and be regarded as a leader by the people in the organisation, called them as emergent leaders. IBM e-business’ real leader David Grossman is an example. When David Grossman came to IBM as a programmer, he found the importance of open internet to expand IBM’s business, therefore, he tried to convince IBM top management the bright future of the new e-business. Eventually, IBM accepted his proposal and started opening up their e-business. With his effort, IBM successfully developed its e-business under his leadership, which transformed IBM from a broken up big blue-chip company to a new dot-com company. Dave Grossman was only a programmer, but he has the characteristics that leader should have such as vision and passion. No doubt, Grossman, at the time, was an innovative leader, who had a clear vision and successfully turned around and transformed an underperformed company from its old business model to a brighter future.

Characteristics of Innovation Leader

Leadership always has some visions on bringing about the organisation better prospects. In this sense, leaders are necessarily innovators, who facilitate inventions to materialize their visions of better future. A leader is not necessarily a “great man” or “hero” type of figure, and do not necessarily have university certificate. We heard a number of innovation leaders, who did not graduate from college but still have achieved great successes. Bill Gates, founder of Microsoft, Steve Jobs, CEO of Apple, they both did not finish their college (Although they tried to get degree after their successes). Nevertheless, they have devoted most of their lifetime to pursue their goals, and have secured unprecedented achievement. It’s the passion to their business and success, which keeps driving them.

leadership and innovation

Although there are no universal characteristics that an innovation leader should possess, generally, other than passionate about the business and success, people usually think a good leader should possess good communication skill, administrative and social capability, skills in their task domain, responsibility, and energetic, initiative, flexibile.

Importantly, an innovation leader must be a good communicator, who is able to help their followers to fully understand the strategy of the organisation, and make sure all of his or her followers will be able to implement the leader’s strategy correctly. At the same time, this can guarantee that all followers be timely informed of the progress of the organisation and what the progress of each individual. This can ensure the whole process be smoothly and precisely completed task by task and therefore achieve the common strategic objective.

Internally, a innovation leader should administrate well the process of implementation of each task, and make sure the team can complete the task in time and meet all requirements. Externally, the leader should take the responsibility to build up a social network that can promote the product or service on behalf of the company, so that the product and service can be developed and commercialized successfully, which requires the social skill of the leader. Therefore, a innovation leadership should be a good communicator, a good administrator, and a good social swinger.

To lead an innovative team, innovation leaders should have substantial knowledge of his given domain. Expertise can be taken as a power by leader to influence their followers. Other than expertise, cognitive-processing skills are crucial factors to an innovative leader. Combination of expertise and cognitive-processing skills can allow leaders to communicate more clearly with their followers, to better understand the exact needs from their followers, and provide them with prompt and correct support. Outside, the expertise leaders can present their team more effectively. We can look back to the earlier example of the Apple former CEO John Sculley, his inability to Apple’s product line is the big reason of his failure.

There are thousands of reasons to determine how innovation leaders should be responsible for their task and willing to take the responsibility for all the actions during the innovation process. To get respect and trust from the followers, the most important thing to do is to give them the credit for all achievements and successes, and take the responsibility for any fallings or mistakes. Therefore, followers will be motivated and will be more willing to be led. Due to the dot com bubble in 2001, Cisco had suffered a lot, sales has plunged largely and stock price fells down sharply, more severe, the employee has became very anxious and lost their desire. During the rough time, Cisco CEO John Chambers, took this as his responsibility, requested to reduce his salary to one dollar annually without any bonus until the recovery of company performance. Urged on by his behavior, employee has cheered up and work harder so that Cisco could return to profitability by 2004.

Innovation Leadership and Doing the ‘Tight Things’

Leadership is very important in every step of innovation process. Although some innovations are created by the employees, who are not in the positions as nominal leaders or anyone in the management board, generally speaking, almost all the innovations emerge from a clear strategy and all-around support from the leadership. By assessing the right things a leadership should do such as making long-term strategy, dealing with turbulence and uncertainty, serving and supporting their followers, etc., we can generate an outline that explains how leadership contributes to the promotion of innovation.

Mapping out a visionary strategy is the fundamental task for an innovative leader to guide the followers to think and behave in a right direction and thus complying with the organisation’s specific goal. Creative teams have clear and common goals. Although freedom is one of the most important part to creativity, which is an essential part of innovation, generally, creativity stems from people’s reaction to a specific goal rather than waiting for people’s affective appeal. Goal-setting has been viewed as a motivational technique to creativity. Firstly, it gives the followers a general framework of what kind of idea that will be appreciated and applicable in the organisation in a specific time; Secondly, in an organisation, a common goal can make all the members work more closely that can enhance the communication in organisation and facilitate information sharing so as to ignite the spark of creativity and innovation.

There are many uncertainties in innovation process. An effective leader should have the ability and sight to forecast and preview possibilities that may occur during the process. As for the existing uncertainties and turbulence, leadership can solve these problems by several strategies including buffering, smoothing, adapting, and rationing, at the same time, the leadership can give followers some directions, encouragement and trust to motivate them, so that the process can operate as efficiently as possible in every aspect. A great leader understands the perspectives of uncertainty and turbulence as full of opportunities and as the outcome of innovation. In 2001, after dotcom bubble busted, Apple’s CEO Steve Jobs launched hard disk based iPod, with a high storage of 1000 music songs, and entered the “much crowded” MP3 player market. This was viewed by many as bad entry timing. Previously, this market sector was dominated by flash memory based MP3 players from Sony and many small manufacturers around the world, with 512MB storage much less than iPod. iPod was a user-friendly, click-wheel interface driven by a powerful marketing campaign overseen by Jobs personally. Jobs’s vision was realized in 2003 when Apple opened its first iTunes store, selling licensed music tracks to consumers. This demonstrates that Jobs understood the competitive edge of his iPod and launched it in the aftermath of crash of dotcom bubble. The success of iPod and iTunes has shown a great example of the combination of innovation and strategy at work. Of course, it further enhances the position of Jobs being the leader of innovative product in IT world even at the time of uncertainty.

There is an another important concept in leadership called servant leadership which means the leaders firstly should serve and help their followers, and understand their needs and provide the support, which is essential for innovation. For example, in order to gain market place through innovative products, an organisation must commit strategic resources, which are controlled in the hands of top management, in another word, the leadership. This is obvious that when a leadership is reluctant to commit resources, innovation can hardly be nourished. We can see the release of Betamax in 1970s, the first generation of video cassette recorder, was the strategic initiative of Akio Morita, the late founder and chairman of Sony Corp at the time. Akio dedicated resources to the R&D team for the Betamax development.

Leadership is about transformation and has largely to do with challenging the way business have been achieved so far. They usually do things differently, rather than do things better. Transformational leaders will have the encouragement to rebel the stereotypes, and spend time to ‘thinking out of the box’. Beside, they like to ‘taking thoughtful risks and building strong teams of people to work across boundaries. By doing things differently or unconventionally, distinguishes innovative leader from ordinary leader.

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