Why Should You Show
Innovative Leadership?

We often hear of successful businesspeople being called "innovative". It's probably fair to say that you cannot survive in business without at least a modicum of innovation. Yet is a business that shows a few elements of innovation, an example of innovative leadership? For that matter, does a company that is ruled by a "lone wolf", no matter how original its product offering, show innovative leadership?

Nearly every successful innovative business succeeds because of a team effort. The "lone wolf" approach rarely thrives on any sizeable scale. Steve Jobs may have been the visionary behind Apple, but he was not the only innovator in the company.
Geoffrey Baumgartner in What is Innovative Leadership? believes that "Innovative leaders are creative visionaries who have big ideas and, most importantly, can motivate people around them to turn those ideas into reality". This shows a very important distinction between coming up with creative ideas, and actually promoting your team to utilize these ideas in a practical and useful way.

For businesses, indeed entire industries, to thrive there has to be a genuine culture of innovation. Moreover, for there to be a culture of innovation there needs to be individuals willing to step up and show innovative leadership.
What is innovative leadership?
Innovative leadership has two components. Yes, there is a visionary who leads the organisation, and who can see opportunities outside the box. Just as important, however, is that person's ability to engender enthusiasm and innovation from the other members of their team. The visionary leader may well have original, brilliant ideas. However, he or she needs to foster a team of fellow innovators around them to develop these ideas, and bring them into reality. The innovative leader needs to establish a culture for innovation, where creative thinking and problem solving becomes an expectation at every level within the company.
The innovator's dilemma is that businesses often reject innovations because they
are not profitable for the company.
A truly innovative leader also has to see through the innovator's dilemma. The innovator's dilemma is that businesses often reject innovations because they are not profitable for the company. Innovations often undermine products and services that customers are happy using, and which make the company more money than the innovations would. This means that potentially world-changing ideas go to waste, until some other organisation picks them up. I am sure that the major music companies are now ruing the fact that they ignored the potential of digital downloads for so long, meaning that they unwittingly let the powerbase in the music industry totally change. We will look at the innovator's dilemma in more detail in an upcoming article on disruptive innovation.
Why businesses need innovative leaders if they are to make a difference
There are numerous examples of "one hit wonders" in the world of business. Mark Henricks in Angry Birds Syndrome: The Highs and Lows of Being a One-Hit Wonder has highlighted some examples of companies who have sprung to prominence on one innovative idea, but never managed to find a follow-up. Rovio Entertainment, for instance, has never managed to repeat their Angry Birds success.

The problem for most businesses, however, is that while your firm may be standing still, competitors are continuing to advance, and come up with their own innovations. Over time, a static, conservative firm, lacking in innovative leadership, faces a real danger of their customer base migrating to their competitors.

Markets, technologies and trends change with time. What is "cool" today becomes passe tomorrow. An innovative leader recognises this fact and is open to his or her team members coming up with new ideas that will keep the company ahead of the trends.

Some firms, like Lego, have managed to thrive for years modifying their basic recipe. Their senior management has clearly managed to focus their innovation on modifications to the core product - helped of course that every few years a new generation of Lego fans come along. One example of their innovative leadership has been the creation of their Cuusoo Crowdsourcing platform, which enabled users to submit and vote on potential lego designs. This has resulted in many ideas being created and a huge level of customer engagement. It was a real mindshift for the Lego development team, to effectively add their customer base to their design team, but it has been a highly effective change of thinking.

Innovative thinkers collaborate. An innovative leader encourages this collaboration; in fact he or she actively fosters it. Innovative leaders know how to take the incredible ideas that team members come up with and then run with them. They know the processes and steps that need to be followed to make these ideas a reality.
Why innovative leaders don't micromanage
Nothing kills enthusiasm and spark more than having a boss who micromanages everything you do. Micromanaging is not leadership. Micromanaging is saying, "I don't trust you or your ideas, so do what I tell you".

It will not take long for creative and innovative employees to lose their spark in such an environment. They will either simply become a company drone, doing as they are told, or they will quickly move to somewhere else, which better nurtures their talent.
Micromanaging is not leadership.
Micromanaging is saying,
"I don't trust you or your ideas, so do what I tell you".
Truly innovative leaders realise this. They know that they have to trust their team. There will be mistakes and false hopes along the way; all innovative teams encounter this. Google is an example of a company that is willing to trial quite a few products, but if necessary they will kill products down the track. Google Reader is probably the best-known example of this.

An innovative leader will build up a passion in their team to work towards a central vision. He or she will have no need to micromanage every last detail. Others will take on that passion and run with it, adding their ideas to expand and embellish it. They will drive the company towards its vision, without any need for a carrot and stick approach from above.
How does innovation create value for potential customers?
The modern consumer has extremely high expectations when it comes to innovation. They quickly tire of old products. They are constantly on the look-out for something new.

Of course, innovative leaders do not slavishly follow every whim of their customers. As Henry Ford is famously "misquoted" as saying, "If I had asked people what they wanted, they would have said faster horses". A truly innovative leader understands his or her customers, and constantly monitors their real needs.

People live complex lives and encounter many problems on a daily basis. They are always searching for a solution to these problems. If you can find an answer to one of their problems, you have a potential customer. You just need to let them know how you can solve their issue.

We would still be playing our music on records if it was not for the fact that they scratched, and you were limited to 23 minutes per side. The CD evolved as a solution to this problem. Of course, eventually there was a wish for more storage, and the DVD was a result (which also solved the poor quality and lack of user friendliness of videotape). Consumers then wanted to improve the quality of what they watched and listened to, so BluRay was invented, although this became stuck in a battle between competing technologies, delaying its introduction for a number of years. This left the door open for others to come up with a solution. These innovators, initially outside the industry itself, discovered that they could make life easier for consumers by removing the physical medium entirely, and we entered the age of digital downloads.

Innovation is a gradual process. Each innovation frees the consumers' imagination, which encourages a further stage of innovative thinking.
Types of innovation you can foster
Robert Tucker, author of Innovation Is Everybody's Business, in an interview with the Center for Association Leadership, believes "innovation is approaching any challenge that you face with an open mind and a creative-solution orientation". If you think about this, this implies that there are an infinite number of situations that can be improved by innovative thinking.

An innovative organization is open to energizing and encouraging the creativity of their people. This is the ultimate key to success as an innovative leader. You do not have to have all of the fabulous ideas yourself. You need to ensure that you operate an environment that encourages your team to come up with them.

Innovation is not just grand large ideas. Most innovation is, in fact, incremental, making small improvements to existing products or systems.

Of course, there will be failures. However, the biggest failure is a manager who is too scared to allow the possibility of failures. You cannot predict exactly how something will perform in the marketplace. An innovative leader is prepared to take a measured risk, and accept that there is learning to be had from every failure made. Indeed, this can be considered as incremental too. If the first four innovations marketed fail to perform as wished, but the fifth one does and brings in $50 million additional revenue, then it could be considered that each innovation brought in $10 million additional revenue. If you had not taken any risks, you would not have received that $50 million.

Henry Ford's Model T may have had to be black, but it is clear that he was an early example of innovative leadership. Ford's main strength was that he was able to see the potential benefits of technology and was able to foster a team to use that technology, allied with streamlined systems, to build a car that was accessible to the masses. His biggest failure was that he stopped monitoring his customers' changing needs. So his innovative leadership faltered in his later years as he failed to modify his vision to match a new marketplace.

How much of an innovative leader are you? Are you, as an executive, truly behind the drive to innovate at your company, or are you just paying lip service to it? Are you more stimulated by delivering profits from current operations and maximizing the growth of existing product lines, or are you actually fully committed to keeping your company innovating, even at the expense of the status quo? How important is it to you, to be permanently in a state of evolution, like the computer industry?

As a leader, are you taking a fresh approach to innovation, or are you just following the rest of the pack?
Innovation series
This is the first of our Innovation series of insights. Our second insight is Disrupt or Die (Or Is There A Third Way out of the Disruptive Innovation Dilemma?)