Leading Innovation

WHILE SENIOR LEADERS cite innovation as important, few explicitly lead and manage it. Those that do (27percent). see results for doing so. These leaders feel more confident about their decisions and say that they have implemented ways to protect innovation and align the right talent.

In a survey of 6oo global business managers, and professionals, the respondents pointed to leadership as the best predictor of innovation performance. As with any top-down initiative, the way leaders behave sends strong signals to employees. Indeed, senior executives believe that paying lip service to innovation but doing nothing about it is the most common way they inhibit it. The failure of executives to model innovation-encouraging behavior, such as risk taking and openness to new ideas, places second. Rewarding nothing but short-term performance and maintaining a fear of failure also make it to the top of the respondents' list of inhibitors.

Holding leaders accountable for encouraging innovation makes a big difference. Thirty percent of the senior executives in the survey were accountable for it, through formal targets or metrics, in their performance reviews. They were more likely than the broader group of respondents to view innovation as one of the primary growth drivers, to manage it formally as part of the leadership team or through an innovation council. and to learn from their failures to achieve it.

Leaders in development organizations can also take a number of other practical steps to advance innovation.

  • Define the areas of innovation focus or platforms (e.g.. climate change) that support strategic objectives as well as the type of innovation, new development or scaling existing initiatives. By doing so. employees understand the type of innovation needed. In the absence of such direction, employees will come back with incremental and often familiar ideas.
  • Add innovation to the formal agenda at leadership meetings. We observe this approach among leading innovators. While sending an important signal to employees about the value management attaches to innovation, it also builds familiarity and over the long term reduces risk.
  • Set performance metrics and targets for innovation. Leaders should think about what metrics, for example. would have the greatest effect on how people work. Leaders can also set metrics to change ingrained behavior, such as the "not invented here" syndrome, by requiring 25 percent of all ideas to come from external sources.