Innovation is critical in a knowledge
economy — driving growth, new products, and new methods of delivering value to
customers. According to PwC’s 2015 study on Global Innovation, U.S. companies spend $145 billion dollars
in-country on R&D each year.
And yet, despite its importance, innovation is
a difficult quality to cultivate both in leaders and in organizations. In Conference Board’s 2015 CEO Challenge
study, 943 CEOs ranked “human capital” and “innovation” as their
top two long-term challenges to driving business growth.
This is a key talent
challenge for most organizations, and a talent gap that needs to be closed,
starting at the top – with the role of the CEO.
XBInsight has collected competency
data on nearly 5,000 leaders across a wide range of industries. Analyses were
done to identify the competencies that innovative leaders share. The top five
competencies found in our research are outlined below, including their
corresponding behaviors. Every CEO should be cultivating these behaviors to
maximize innovative thinking:
The most innovative leaders:
Manage Risk
Innovative leaders scored 25%
higher than their non-innovative counterparts on managing risk. Innovative
leaders are bold when it comes to experimenting with new approaches. However,
they will initiate reasonable action when potentially negative consequences are
expected. When risks do present themselves, they develop plans to minimize the
risk and identify where it is needed most.
To develop better risk
management behaviors, CEOs need to:
List a minimum of eight ideas
for new initiatives. Benchmark best practices for each and identify five
opportunities that can be implemented immediately within the organization.
Identify, document and plan
for risks as part of developing strategic alternatives.
Shift your approach from
thinking things through thoroughly toward getting started without knowing all
of the answers and adjusting as needed.
Set a time limit for analyzing
a particular situation to avoid overthinking decisions.
Stop and look at the downside
risk of every decision. If you can live with the consequences of a decision,
then stop analyzing and go ahead and make the decision.
Demonstrate Curiosity
Innovative leaders also scored
higher in terms of demonstrating curiosity. They exhibit an underlying
curiosity and desire to know more. These leaders will actively take the
initiative to learn new information, which demonstrates engagement and loyalty
to company goals. Keeping their skills and knowledge current gives them the
competitive edge they need to lead effectively, and also stimulates new ways of
thinking in other workers.
To develop and demonstrate
curiosity, CEOs need to:
Evaluate their current
knowledge and skills. Examine how these skills will help achieve long-term
goals. Identify what other skills or knowledge would move you in this
direction.
Create a learning environment
or community to encourage the free flow of new knowledge and perspectives.
Stimulate new thinking by
examining mistakes and setbacks as opportunities to learn. Mistakes prompt you
to look inward and think about your limitations.
By studying your patterns of
behavior, you can recognize and correct your behaviors that repeatedly result
in mistakes, miscalculations, or the misreading of a situation.
Make time for developmental
activities, such as taking classes and participating in workshops.
Lead Courageously
Innovative leaders are
proactive and lead with confidence and authority. They turn tough circumstances
into prime opportunities to demonstrate their decisive capabilities and take
responsibility for difficult decision making.
These leaders are sure to
engage and maintain audience attention in high-stakes meetings and discussions,
and they do not avoid conflicts and differences of opinion.
CEOs who wish to lead more
courageously need to develop the following behaviors:
When facing a tough decision,
consider the alternatives, identify and confront risks, and prepare to deal
with other people’s reactions.
Look for an opportunity to
share your feelings and opinions with clarity and conviction, despite any
resistance you may experience.
Think about the difference
between being assertive and being aggressive. Identify situations or people
that fall into both categories. The trick to being assertive is to share your
views, but not to force them. Assertive leaders are effective because they look
for win-win solutions and show respect for others (even when they disagree).
Learn to recognize and
appreciate leadership qualities in others as well as in yourself.
Seize Opportunities
Innovative leaders scored
higher when it comes to seizing opportunities. They are proactive and take
initiative and ownership for success. These CEOs anticipate potential obstacles
before taking action, but avoid over-analysis.
They push for personal
performance and are able to work independently for extended periods of time
with minimal support. They are also able to change directions quickly to take
advantage of new opportunities when they come up.
CEOs who wish to become more
adept at seizing opportunities need to:
Examine setbacks and problems
related to creating new opportunities and competitive strategies within your
own company. Learn to see advantages in changing situations and new
developments. For example, a leader will need to evaluate the capabilities of
his or her current project delivery team and consider whether additional
resources will be required to meet all objectives, expectations and timelines.
Consider past opportunities
that you declined. What do these opportunities have in common? What intimidated you about them?
Remember that you do not need
to undertake opportunities alone. Make it a collaborative effort by asking
valued employees to help you out.
Maintain a Strategic Business
Perspective
Lastly, our research found
that innovative leaders score higher when it comes to maintaining a strategic
business perspective. These leaders demonstrate a keen understanding of
industry trends and their implications for the organization. They thoroughly
understand the business, the marketplace, and the customer base and are adept
at identifying strategic opportunities or threats for the business. They
actively participate in community, industry and leadership organizations to
understand the external environment, and have an ability to articulate
convincing approaches to moving their business forward.
To develop a strategic
business perspective, CEOs need to:
Create and/or participate in a
cross-functional committee.
Perform a knowledge-based SWOT
(strengths, weaknesses, opportunities, and threats) analysis, comparing your
organization’s knowledge to that of its competitors and to the knowledge
required to execute your organization’s own strategy.
Rather than accept the
learning opportunities that happen to occur, try to stage activities that
broaden learning in areas considered strategic. Start by defining what your organization
knows about competitively important factors (e.g., why do customers buy your
product or service?). Proactively create
learning opportunities around these factors.
Involve people throughout the
organization in the strategic planning process.
Develop a multi-year strategy
that includes steps for you and your staff to take in order to grow the
business. Analyze where your successes have been and how they will apply to
likely future trends.
There is one competency where
innovative leaders perform more poorly than less innovative leaders —
maintaining order and accuracy. For this reason, organizations need to
supplement innovation initiatives with people who are strong in project
management, or provide tools and training to help the innovators manage the
details more effectively.
Our data also suggested that a
strong customer orientation is a starting point for building a strategic
marketplace perspective in leaders. Identify early career employees who
consistently consider the customer perspective when making decisions. These
individuals may be future innovators. Exposing these customer-centric employees
to strategic projects and to work that touches the customer experience along
the life cycle will groom them to be future innovators.
Finally, we analyzed the
behavioral styles of the highest-level innovators and found four subsets.
Leaders with “driving styles” were the most likely to be innovative because
they are willing to chart their own course and to stand alone in developing a
creative, fresh approach to a product or service. People with “impacting
styles” are also likely to drive innovation through their ability to convince
and persuade others toward a new way of thinking. On the other hand,
“supporting” and “contemplative” individuals tend not to be innovative
leaders. They need more organizational encouragement and structure to
help them bring their out-of-the-box ideas to the table.
The data suggests that the
most innovative CEOs don’t ignore risks – they manage them. These leaders
anticipate what can go wrong without getting boxed in. They’re curious, and
they seize on clear opportunities, balancing exploration with being
opportunistic. The CEOs who are most likely to lead innovation are driving,
high-impact individuals, who aren’t afraid to be assertive, independent, and
above all, curious.
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