December 1

Leading FOR Innovation; It’s a numbers game!

Let me make you a promise; nowhere in this article am I going to ask you where you see your leadership style sitting on a scale of 1-10. Nor am I going to set out to tell you that what you are doing is wrong. After all, every organisation is different, and every organisation may need a different style of leadership depending on its current maturity and growth phase.

However, what I am going to do is to set out some numbers and behaviours and questions for you to think about. They may help to reinforce your current leadership ethos, or they may act as a catalyst for change. Either way, it will only take a few minutes to read this article, so what have you go to lose?

My catalyst for writing this article was some research by McKinsey [1], which aimed to identify the leadership traits which mattered in these challenging times. Based on an extensive review of existing literature, the team at McKinsey came up with a top twenty list of leadership characteristics. They then modelled these via a survey of 189,000 executives and cross-referenced answers against company leadership effectiveness.

The outcome of that research highlighted just four key leadership behaviours which accounted for 89% of leadership effectiveness.

  1. Be supportive
  2. Operate with a strong results orientation
  3. Seek different perspectives
  4. Solve problems effectively

However, what I think is particularly interesting is how these four areas correlate so closely with the key drivers of corporate innovation capability and culture. So, without further ado, let’s dive into the top four traits, starting with seeking different perspectives.

Firstly though, this isn’t a rallying cry to think outside the proverbial box, and it certainly isn’t a recommendation to usher in change for change’s sake. But you certainly can’t lead change by promoting existing thought patterns and practices just because ‘they have always stood us in good stead in the past’. Nor are you going to get very far when you tinker around the edges of what’s possible. Despite innovation being widely acknowledged as a driving force for change, 48% of initiatives only deliver incremental innovation. [2] And whilst many of those changes may have been long overdue, you can’t tell me that when it comes to incremental innovation, we’ve moved on from concepts such as staff suggestion schemes which were so prevalent in the 1980s and 90s. And yes, there’s a fine line to be drawn between throwing the organisation into disarray in a wild attempt to do ‘stuff’, and bogging it down in multiple small changes which may feel like you’re doing something but not achieving very much. But that is where real leadership comes into play, turning the VUCA world of Volatile, Uncertain, Complex and Ambiguous into one which is Visionary, Unbounded, Creative and Authentic. It’s hardly surprising therefore that the top trait of the future retail CEO is seen as having a clear vision/change agent [3].

So, ask yourself when the last time you stepped out of the day-to-day to take a look at what’s possible was? When did you see sales figures and metrics not as measuring sticks against competitors but as drivers for change? And when did you last sit down with researchers, academics and startups in your sector and other fields to find out what is new, what is being developed and how that might enable change?

That leads us on to solving problems effectively. Now you don’t have to have all the answers but what you do need to have is a deep understanding of problem-solving processes allied to the ability to create the right conditions for significant innovation. After all, solving problems sits at the heart of innovation, but they do have to be the correct problems. I’ve lost track of the number of times I’ve been told a company is doing lots of stuff, but it doesn’t seem to be translating into the bottom line. It’s great that 83% of leaders are satisfied with their level of R&D [4] but if that truly is the case then why do 72% say there is limited visibility of outcomes from their investment in innovation?

Is there something fundamentally wrong with the culture of the organisation that suppresses innovation outcomes, or are companies simply asking the wrong questions? For significant innovation, we have first to ask if we are looking at something new or different. Still, it then has to solve a genuine problem, add real value to the customer, and provide a return on investment. To take that attitude out into the organisation, leaders need to understand areas such as design thinking, outcome-driven innovation, jobs-to-be-done frameworks, empathy and genuine customer understanding. In short, they need to become fundamentally, human-centric! Unfortunately, in 2018 a survey revealed that less than 5% of companies say their leaders could make objective design decisions? How can leaders create the conditions for creativity-led change if they don’t understand design, innovation and how to develop and deliver a change process to pursue it?

Maybe it’s time to step back and examine your leadership ethos? What are you bringing to the organisation in order to develop the conditions for change? Are areas such as problem-solving, exploration and experimentation promoted or suppressed? What do you need to change in yourself to bring about the change you desire?

Perhaps one of the most substantial challenges to overcome when moving towards a design-led system is the fear of uncontained risk, of the unknown. We see it in the statistics with 27% of leaders feeling it is unacceptable to invest in an innovation project that fails. [5] Those who genuinely understand innovation know that failure is actually a learning exercise rather than a cause for censure and that the most significant innovation efforts take place within a controlled and understanding environment.

It’s hardly surprising, therefore that another of the top four leadership traits is the ability to operate with a strong results orientation. So much so that when it comes to comparing innovation leaders and laggards, nearly three-quarters of innovation leaders are seen to use multiple internal and external data sources and advanced analytics to inform decisions around innovation. [7] In our bestselling book ‘Building a Culture of Innovation’ [8] we showed you how to follow a step-by-step process leading to an organisation-wide culture of innovation. Just as leaders have to set innovation at the heart of the strategy and culture, so too should metrics and processes be designed to deliver innovation. The term ‘Innovation accounting’ may not garner headlines yet, but it does form an intrinsic element of the innovation system.

It’s a straightforward question this time. As leaders, I know you’ll have your finger on the pulse of company statistics. But are those results geared to helping your drive sustainable innovation capability, or are they still geared towards short-term targets?

That leads us on to the final element of outstanding leadership. No-one is an island runs the saying, and that is especially true of leadership. Your people are the ones who will ultimately deliver innovation success. Your task as a leader is to be supportive, to create the conditions in which innovation will flourish. Culture, mindset, skills, attitudes, habits, equality; all these and more add to the innovation mix, and it is up to you to lead the way. And if you’re wondering where equality comes into play, the innovation mindset is shown to be six times higher in the most-equal cultures than in the least-equal ones. [9]

As the McKenzie report comments, supportive leaders “intervene in group work to promote organisational efficiency, allaying unwarranted fears about external threats and preventing the energy of employees from dissipating into internal conflict.” But more than that, supportive innovation-focused leaders not only ‘own’ the innovation agenda, they help their managers to ‘Drive’ that agenda forward and enable their people to ‘Contribute’ to it on a day-to-day basis.

And yet, despite widespread acknowledgement of innovation as a prime driver of future success, barriers such as turf wars, resistance to change, lack of training, or restrictive practices still come up time and time again, so where is leadership going astray?

This then is where we end, but real innovation leadership starts. You can be a blue sky thinker, a problem solver who nevertheless keeps hold of the detail and still fail to lead FOR innovation. Because you also have to be a collaborative empowerer who enables others to succeed in order to generate the right success. Forget the numbers: Are you that person?

[1] https://www.mckinsey.com/featured-insights/leadership/decoding-leadership-what-really-matters
[2] https://home.kpmg/us/en/home/media/press-releases/2019/09/new-survey-data-indicates-increased-confidence-and-investment-in-innovation-among-fortune-1000.html
[3] https://www.green-park.co.uk/insights/dna-of-the-future-retail-ceo/
[4] https://www.ayming.co.uk/insights/ayming-institute/international-innovation-barometer-2020/
[5] http://www.infrastructure-intelligence.com/article/nov-2019/innovation-assured-environment
[6] https://www.mckinsey.com/business-functions/mckinsey-design/our-insights/the-business-value-of-design
[7] https://hbr.org/sponsored/2019/11/the-ceos-innovation-playbook
[8] https://crisbeswick.com/building-a-culture-of-innovation/
[9] https://www.accenture.com/us-en/about/inclusion-diversity/gender-equality-innovation-research
This article was previously published on Outcome.

Tags

Innovation Leadership, Leadership, transformation


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