Leadership: Coaching_Focus Paper

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What kills innovation? Your role as a leader in supporting an innovative culture

Nelson H. Soken and B. Kim Barnes

Abstract

Purpose – The purpose of this paper is to suggest a set of leadership practices that can help to build

and sustain a culture of innovation.

Design/methodology/approach – The article is based on the authors’ many years of consulting and

facilitating learning experiences in innovation management in a broad range of organizations. The

authors have observed that specific leadership and management practices seem to be strongly related

to the success or failure of organizations in building self-renewing innovation environments.

Findings – Leadership and management behaviors that engender fear, a lack of focus and

communication about organizational innovation strategy, a paucity of resources (time, money,

encouragement) are among the factors that make innovation less likely or less successful. A clearly

communicated purpose, the ability to accept and use failure, and an accessible process for getting a

hearing on ideas are among the supportive factors.

Practical implications – Many leaders understand that innovation is key to their organization’s ability to

survive in a connected and competitive business environment. Fewer understand and/or are willing to

make the changes that will create and sustain a culture of innovation. Leaders who are willing to adopt

some of these practices are likely to achieve better results in encouraging talented people to contribute

their capabilities, ideas and efforts to strategic innovation initiatives.

Originality/value – Successful innovation is not created through magic and good fortune. It is the

product of strategic thinking, a supportive culture, great talent, managers who know when to be involved

and when to step back, and leaders who listen, support risk, and learn from failure.

Keywords Leadership, Innovation, Culture, Management, Organizations, Risk-taking

Paper type Viewpoint

E xecutives see innovation as the way to long-term success. According to a McKinsey

worldwide survey, over 70 percent of the executives view innovation as one of their

top three growth drivers over the next three to five years. These organizations have

incorporated innovation into their vision, mission, and strategy. One of the first issues that

arises is that many of them do not have a common definition of innovation. People in these

organizations often conflate creativity and innovation. They may believe that it belongs in the

marketing department or R&D. If innovation is to be an important factor in organizational

strategy, the word must have a shared meaning to everyone in the organization. In the

managing innovation course developed by David Francis, PhD and B. Kim Barnes,

innovation is defined as ‘‘optimizing the potential benefits embedded in an idea that is new to

you’’. Two concepts contained in this definition are that innovation is about creating value

and that it requires individuals and organizations to embrace something new. It is not just

about generating good ideas, but also about taking these good ideas and bringing them to

fruition. Innovation requires people to change and move beyond the status quo. Vision,

motivation, focus, perseverance, and leadership guidance are required to achieve success.

In that same McKinsey survey, 65 percent of the executives surveyed are disappointed with

their ability to stimulate innovation in their organizations. It is not as if these leaders and

DOI 10.1108/ICT-09-2013-0057 VOL. 46 NO. 1 2014, pp. 7-15, Q Emerald Group Publishing Limited, ISSN 0019-7858 j INDUSTRIAL AND COMMERCIAL TRAINING j PAGE 7

Nelson H. Soken is based at

N.H. Soken Consulting,

Hugo, Minnesota, USA.

B. Kim Barnes is based at

Barnes & Conti Associates,

Inc., Berkeley, California,

USA.

organizations are not investing in innovation. They invest in workshops on innovation,

experts come in to consult with leaders on innovation strategy or recommend building

‘‘creative spaces.’’ They recognize that creating a positive and cheerful workplace is

important to employee engagement and productivity. Unfortunately, they see few new

products or services emerge from their development teams. They find that clunky processes

continue to slow things down. The mood and climate of the organization’s physical and

social environment remain dull, subdued; even, at times, depressing. People celebrate

Fridays and hate Mondays. Talented individuals leave for greener pastures at other

companies that they perceive as more exciting. What’s wrong with this picture? Frustrated

leaders throw up their hands and ask themselves and others, ‘‘What am I supposed to do to

create a real culture of innovation?’’ Richard Danzig, former US Secretary of the Navy, states

in the February-March, 2000 issue of the magazine, Civilization: ‘‘Organizations are a kind of

fossil record of what bothered their predecessors. That record should be studied, he argues,

to anticipate better how organizations will change. The issue is not whether they will

encounter different types of crises; they will. The issue is whether or not they will change fast

enough to be prepared for those crises when they occur.’’

What are the barriers to an innovative culture? Employees (and ex-employees) often cite the

following factors in describing the human environment of organizations that have lost or

never had a culture that is supportive of creativity and innovation:

B Fear and punishment (cannot co-exist with a willingness to take the risks that innovation

requires).

B Lack of meaning (if you do not know where you are going, any road will get you there – no

vision; no innovation).

B Not seeing that you make a difference (if your work falls into a black hole and seems

disconnected from organizational vision and goals – why bother?).

B Loss of confidence (if you only hear about what does not work and never hear any

appreciation, you may start to discount your own ideas).

B Resentment and frustration (why should you do something above and beyond for an

organization that does not treat you well?).

B Lack of control, powerlessness (micromanagement and inability to make decisions kill

initiative).

B Win/lose mentality – internecine warfare (we have met the enemy and he is us).

B Incessant distraction, clutter, and busyness that fills people’s time, saps them of their

natural creative energy and excitement, and wears them down (time-intensive activities

that at times feel meaningless and counterproductive to progress, such as sitting in

endless meetings. How can you innovate if you do not have the time to think?).

B Implicit and explicit reinforcement of the status quo (if you step out of line, you will be

pulled back into the fold or be pushed out).

B Lack of flexibility and openness to new opportunities and/or ways to measure their

potential value (if you do not have an enormous set of slides with reams of statistical data

about a potential customer or new offering, it must not be a worthwhile innovation to

pursue).

B The physical and social environment is sterile, more focused on uniformity – sometimes

called alignment – than on stimulating individuality, creativity, and out-of-the-box ideas

‘‘ Innovation requires people to change and move beyond the status quo. Vision, motivation, focus, perseverance, and leadership guidance are required to achieve success. ’’

PAGE 8j INDUSTRIAL AND COMMERCIAL TRAININGj VOL. 46 NO. 1 2014

and behaviors (the ‘‘organizational immune reaction’’ kills anything that generates

variability and non-conformity).

A total of 94 percent of the executives in the McKinsey survey concluded that people and

culture are the most important drivers of innovation in organizations.

Business leaders need, first of all, to recognize that their organizations are not machines but

rather are comprised of human beings with all their assets and liabilities. The human

environment of an organization can be friendly or hostile to innovation and creativity.

If people and culture drive innovation, how can leaders create and sustain an environment

that is conducive to innovation? In an Oliver Wyman and the Economist Intelligence Unit

survey, executives from 17 industries worldwide identified proactive leadership as a major

factor in the success or failure of efforts to foster an organizational environment that is

supportive, open, and conducive to innovation and intelligent risk-taking. Leaders of

organizations need to establish clarity of purpose around innovation so that people feel that

the organization truly sees innovation as a business priority.

Successful innovation requires true leadership, not just good management. Some leaders

see their role as primarily focused on directing and controlling people and resources to

accomplish desired goals. True leaders engage people at a different level of interaction and

relationship. These leaders focus on inspiring employees with a common vision, mission,

and values. They engage their team members; encouraging them to bring all their skills and

energy to bear in order to achieve important results. Leaders of successfully innovative

organizations encourage an organizational climate that harnesses employee’s natural

energy, creative spirit, and desire to do amazing things. They provide a laser focus on a

common set of goals.

Beyond sharing or co-developing the vision, mission, and strategy of the organization, what

do leaders need to do to foster a culture of innovation? How can they establish and share

norms and values that support innovation? Leaders need to develop the appropriate

mindsets and skill-sets to foster and support innovation and encourage others to do the

same. Self-reflection and self-awareness are fundamental to having an impact on the

organizational climate.

All of us can learn to adapt our mindset and learn skills around innovation; however, a recent

Harvard Business Review article by Cohn, Katzenbach, and Vlak entitled ‘‘Finding and

grooming breakthrough innovators’’states that only 5-10 percent of high-potential managers

have the skills to be breakthrough innovators (Cohn et al., 2008). The authors highlight the

importance of identifying and nurturing leaders who are particularly adept at demonstrating

an innovation mindset. This requires them to recognize what they are good at and to be

unthreatened by others with different skills – team members who will help the organization

stay at the cutting edge and bring unique value to the organization. These leaders should be

nurtured through challenging assignments and provided with the support of high-profile

mentors and peer networks at the highest levels of the organization. Ultimately, these

individuals should be placed in the middle of an organization so they can influence from an

‘‘out of the box’’ position that goes across organizational boundaries. They can then serve as

the focus of ‘‘innovation hubs.’’ Let’s consider innovation issues from the point-of-view of

such a leader.

‘‘ Business leaders need, first of all, to recognize that their organizations are not machines but rather are comprised of human beings with all their assets and liabilities. The human environment of an organization can be friendly or hostile to innovation and creativity. ’’

VOL. 46 NO. 1 2014 j INDUSTRIAL AND COMMERCIAL TRAININGj PAGE 9

Clarifying your purpose in your area of influence

Innovation is not generic. In practice, it is focused on specific arenas. In order to focus the

innovation energy of the people in your organization, you need to be open and clear about

your approach to innovation.

Communicating a clear purpose related to innovation requires considerable skill. The

message needs to go beyond an intellectual and analytical statement of the vision, mission,

and strategy. It is as much about the heart as it is the mind; it has to be practiced as well as

preached:

B Have you made the innovation vision, mission, and strategy ‘‘real’’ to the employees in

your area of influence and demonstrated that you are truly committed to it and sincere

about its importance? What are you doing to motivate and inspire; to capture employees’

hearts around innovation?

B Have you considered measuring innovation efforts differently from regular projects? For

example, P&G measures total input and output rather than individual projects – rather like

a venture portfolio with varied opportunities maturing at different times.

B Are there clear customer and business needs identified and prioritized to demonstrate

that innovation is truly a top priority? Does everyone know what he or she should focus on?

Do you identify high-profile, well-established leaders to drive these efforts?

B What are you doing to infuse your employees with energy and a sense of urgency that

inspires them to make a real commitment? How do you gain their trust and confidence

and provide a realistic sense of security about the future?

B Do you regularly communicate to your employees why innovation is important? Do you let

them know what we need to worry about in the external competitor and business

environment so we have a context for why we are doing what we are doing?

Practicing what you preach

Albert Schweitzer once said: ‘‘Example is not the main thing in influencing others. It is the

only thing.’’ Set an example that generates trust and confidence through your actions.

Communicate openly about organizational goals, how the organization is doing, and what

employees can do that will contribute to achieving the goals. Let people know where

innovation is welcome and encouraged. Ask for ideas and suggestions and listen deeply

before evaluating them positively or negatively:

B Do you always keep the door open to your employees? Are you generous with information

that affects them? Well-informed employees are more eager and better prepared to

participate.

B Do you encourage a wide variety of ideas, including ones that make you and others

uncomfortable? Do you seek diverse perspectives?

B Do you suspend judgment, and avoid evaluating ideas either positively or negatively

before they have been well developed? Do you ensure that there is a large number of

ideas under consideration before you express your opinion or preference? Early positive

evaluation of one idea by a leader can channel the discussion in a particular direction and

make it difficult for unusual ideas to get a hearing.

‘‘ Most innovations require teamwork. Rarely will one person have all the skills and knowledge needed for an innovative project. Internal competitiveness and a lack of trust and respect are fatal for collaboration. ’’

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B Do you model desired behaviors? Are you consistent in what you say and what you do?

(For example, do you encourage intelligent risk-taking and reward ‘‘good’’ failures –

those that are the result of making a courageous and informed choice?).

Taking risks

Risk is inherent in innovation. There is a chance that your idea will not work, be too costly, or

too late to the market. Your customers may not see a need for it or your competitors may

capture the market before you get there. Successful innovation requires tolerance for risk,

ambiguity, and failure:

B Are you willing to share your own personal experiences with failure in order to create an

open atmosphere for discussing failure and risk-taking?

B Do you share the challenges of innovation with your team so that they feel like everyone is

in it together when it comes to risk-taking and decision making?

B Have you given employees specific guidance on what they should do when it comes to

risk-taking; in particular telling them where risk-taking is desired and where it is not?

B Do you find ways of turning setbacks and failures to your advantage by learning from the

experiences? Do you encourage open discussion around failures and openly evaluate

team performance?

B Do the areas of focus and resources tend to go to ‘‘sacred cows’’ that made the

organization successful in past or is there greater emphasis and resources invested in

pursuing new opportunities for the future?

B Do you encourage and support prototyping and pilot testing to generate data cheaply

and quickly? Do you seek out a variety of opinions to assess the potential value of an

innovation?

B Do you encourage a ‘‘fail-fast’’ approach? Do you ask your team to do multiple

prototyping to learn what works best rather than focusing too early on one approach?

B Steve Jobs once said: ‘‘Be a yardstick of quality. Some people aren’t used to an

environment where excellence is expected.’’ Are you pushing your team to identify the

‘‘idea killer’’ issues earlier in the process and force them to deal with the issues sooner

rather than later?

Creating and sustaining a team

Most innovations require teamwork. Rarely will one person have all the skills and knowledge

needed for an innovative project. Internal competitiveness and a lack of trust and respect

are fatal for collaboration:

B Do you lead by example? Sometimes chipping in with the work that others have to do

builds trust and respect and creates a sense of teamwork around a sometimes risky and

lonely endeavor (as long as you do not micro-manage it).

B Do you create informal settings and/or celebrations to discuss how things are going as

well as to celebrate progress?

B Do you show up and participate? Are you a visible supporter of innovation efforts? Do

employees know you are there to protect them? Particularly in innovation efforts, people

need to have a protector who helps them overcome obstacles, provide resources, run

interference, and shield them from the organizational immune response (e.g. persecution,

mockery, and even deliberate sabotage).

B Do you encourage constructive and creative debate around ideas but manage it so it is

not personal and destructive?

B Do you spend time listening to others without judgment?

B Do you seek out, protect, and support people who are different and push against the

status quo in an effort to make the organization better?

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B Have you earned the trust of innovators and their associates so you can serve as an

arbitrator between innovators and the rest of the organization?

Navigating the organization for innovation success

Many good ideas may walk out the door of your organization every day because people do

not know how to get a hearing, a sponsor, or the resources they need to move their ideas into

action:

B Is there a clear and well-understood process for innovation so everyone knows where

they are at any time?

B How are ideas identified and explored? Do people know what to do if they have an idea to

propose? Do they know who by and how the ideas will be evaluated and a decision

made? Are they informed about the decision criteria? How is the decision communicated?

B Do people know how to find facilitators, sponsors, or advocates to help move an idea

through the decision process?

B Is there an established funding mechanism that is explicit and transparent for innovation

– that shows that the organization is serious about innovation? Is this funding process part

of the overall annual operating plan process?

B Do you spend time coaching others on how to navigate the organization and more

successfully influence key stakeholders?

B Do you stretch boundaries appropriately to provide space for innovation? For example,

do you allow for variability when it does not cause harm and may result in positive

outcomes? Too much control, unreasonable metrics, processes, deliverables, deadlines,

and organizational policies can kill new ideas and suck the energy out of people.

B Are you an advocate for efforts to generate organizational innovation energy such as

stimulating physical environments, social networks, creativity/brainstorming sessions,

events such as innovation fairs or contests, flexible organizational structures and

processes?

Measuring and rewarding innovation

To succeed in innovation, the organization needs to have an environment that supports the

identification, development, and implementation of innovative ideas. Employees need to

hear a clear message that the organization expects them to take initiative and try new ways

of doing things. What does it take to create an atmosphere that clearly drives these

expectations?

1. Are your employees rewarded for identifying and implementing innovative ideas?

2. Are ‘‘good tries’’ (intelligent risk-taking) rewarded as well as successes?

3. Are people recognized for making good risk decisions before the outcome can be

known?

4. Have you established clear metrics so everyone knows where they stand and what is

expected of them? This discipline makes everyone feel more secure and provides a clear

sense that there is leadership on innovation. Some things to consider when establishing

metrics include:

B Focus metrics on what matters.

B Limit the number of metrics so people do not get overwhelmed and lose track of the

purpose of metrics: to measure progress toward value creation.

B Review metrics constantly to make sure you are getting what you want out of them.

B Make sure that the metrics are aligned with the organization’s objectives.

B Make sure the metrics are linked to the performance management system because

what gets measured is, typically, what gets done.

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5. Are you patient and willing to nurture good ideas over time?

6. Are you willing to identify qualitative (e.g. customer feedback) as well as quantitative

measures?

7. Do you make timely and sound decisions with good rationale about which ideas to pursue

and which to reject? Do the decisions stick?

Busting boundaries

Do you encourage customer interaction and understanding? A.G. Lafley once said: ‘‘You

need creativity and invention, but until you can connect that creativity to the customer in the

form of a product or a service that meaningfully changes their lives [. . .] you don’t yet have

innovation.’’ And ‘‘[. . .] the consumer is boss. If we can develop better ways of learning from

them – by listening to them, observing them in their daily lives, and even living with them –

then our mission is more likely to succeed’’ (Lafley and Charan, 2008). What are you doing to

encourage and develop your own and your employee’s skills to learn directly from your

customers – skills that go beyond just talking to them?

1. Do you encourage expansive thinking and action rather than an overly controlled and

limited perspective based on the status quo?

2. Are you developing your discovery skills as a leader and encouraging others in these

skills as well? According to Agatha Gilmore (2010) in an article entitled, ‘‘Five secrets of

great innovators,’’ innovators have four discovery skills that need to be identified and

nurtured:

B associating; connecting seemingly unrelated things and cutting through a lot of data

quickly to identify the key issues;

B questioning; having an open mind and always asking ‘‘why?’’ ‘‘why not?’’ and ‘‘what

if?;’’ looking at problems with fresh eyes;

B observing the marketplace, including the behavior of potential customers; and

B experimenting; prototyping and pilot-testing new ideas; consciously networking with a

diverse group of people to share insights and expand one’s knowledge base.

3. Do you encourage employees to look outside of themselves – beyond their colleagues,

friends, organization, and company? P&G fights NIH (not invented here) with PFE

(proudly found elsewhere).

4. What are you doing to break down organizational silos? In particular, do you discourage

employee behavior that optimizes for personal or group benefit at the expense of greater

organizational good? Are you balancing internal competition so that the results are fruitful

and productive rather than uncontrolled and destructive, with competing groups

sabotaging each other for personal gain?

5. Do you encourage and visibly support information and insight sharing within and outside

typical organizational boundaries? (For example, encouraging and sponsoring

book/journal clubs, conference attendance, and collaborative problem-solving

sessions where diverse groups gather to share insights).

6. Does each employee feel a sense of personal responsibility and are they empowered to

establish a supportive innovation climate in his or her area of influence across

organizational boundaries?

Focusing on what matters

In the end, leaders are the people we look to for guidance in setting our priorities and

focusing our energy. We need our leaders to help us see what is truly important about our

work; how we are contributing to our customers, and our communities; how what we do

makes a difference.

VOL. 46 NO. 1 2014 j INDUSTRIAL AND COMMERCIAL TRAININGj PAGE 13

A broad perspective combined with self-awareness, high energy and a fierce focus on what

is most important creates inspiring leadership:

B Are you aware of your preferences and habits of response about risk/reward and

innovation? Do you hire those with the talents and expertise you lack?

B Do you work at creating an upbeat environment at work?

B Do you broaden your cultural and social horizons beyond your usual experience?

Learning to see things from different perspectives will give you greater flexibility in

problem solving at work.

B In a rapidly changing world, are you willing to venture in new directions to seize new

opportunities and learn new skills?

B Do you work at seeing the perspective of others when it comes to innovation? What data is

sufficient to measure innovation (e.g. leading versus lagging indicators)? What’s the best

way to communicate to stakeholders who have a different view of innovation?

B Are you willing to look at your own assumptions and any organizational ‘‘sacred cows’’

and open your mind to alternatives?

If leaders who see innovation as a critical growth imperative are to succeed, they have to be

proactive in addressing these and other important issues around people and culture.

Leaders ultimately have to take responsibility for influencing the organization and its

members to embrace innovation and to make it everyone’s responsibility to foster a culture

that supports innovation and intelligent risk-taking. As Jim Collins (2009) states: ‘‘Whether

you prevail or fail, endure or die, depends more on what you do to yourself than on what the

world does to you.’’

References

Cohn, J., Katzenbach, J. and Vlak, G. (2008), ‘‘Finding and grooming breakthrough innovators’’,

Harvard Business Review, Vol. 86 No. 12, pp. 62-70.

Collins, J. (2009), How the Mighty Fall: And Why Some Companies Never Give In, HarperCollins,

New York, NY.

Gilmore, A. (2010), ‘‘Five secrets of great innovators’’, Chief Learning Officer Magazine, February.

Lafley, A.G. and Charan, R. (2008), The Game-Changer: How You Can Drive Revenue and Profit Growth

with Innovation, Crown Business, New York, NY.