Leadership and Innovation

LEADERS SAY THAT making top talent available for projects to meet innovation goals is their single biggest challenge in this area. Some 4o percent of them also believe that they do not have enough of the right kinds of talent for the innovation projects they pursue. A different view emerges from below. however. Employees are more likely to believe that their organizations have the right talent but that the corporate culture inhibits them from innovating (Exhibit 3). We, for our part. believe that defining and creating the right kind of culture. however elusive. greatly increases the prospects for successful and sustained innovation. In this culture. trust and engagement are the most important values where employees know that their ideas are valued. believe it is safe to express ideas and learn from experimentation.

Managers and employees broadly agree about the attitudes. values, and behavior that promote innovation. Topping the list, in our research. were openness to new ideas and a willingness to experiment and take risks. In an innovative culture, employees know that their ideas are valued and believe that it is safe to express and act on those ideas and to learn from trying. Leaders reinforce this state of mind by involving employees in decisions that matter to them.

There is also widespread agreement about the cultural attributes that inhibit innovation: a bureaucratic, hierarchical, and fearful environment. Such cultures often starve innovation of resources and use incentives intended to promote short-term performance and an intolerance of failure. Only 28 percent of the senior executives in the survey said that they are more likely to focus on the risks of innovation than on the opportunities, but only 38 percent said that they actively learn from innovation failures and entourage the organization to do so as well.

Our experience helping organizations to innovate suggests that they can make progress by starting with their existing pockets of innovation and positive deviants people who seem to work more effectively than others with the same resources and in the same environment. Much can be learned by beginning from this positive point of departure versus trying to reduce barriers. a worthy aspiration with many challenges. For example, rather than trying to reward failure. focus on increasing experimentation and testing. Rather than trying to reduce hierarchy. try inviting youth to meetings they would not otherwise attend and listen to their perspectives.

Innovation is a balance of bottom-up and top-down activities. It requires leaders set an agenda and create the conditions for innovation that subsequently engage the organization at all levels in all geographies. And it is the responsibility of employees to rise to this challenge. But it is wise to approach innovation in small steps. implementing just one or a few of the ideas we propose and building from there toward a successful journey.