Many people have ideas, but not all ideas are good. Those who can act on their ideas, capture and deliver value, and generate a profit for a new or improved framework, process, product, or service can be considered innovative.
What is innovative leadership? Innovative leadership can be described in several ways, but to break it down plainly, it is the ability to lead and drive the innovation process within an organization. Ideas are managed beyond the research and development departments through the practice of entrepreneurship, corporate entrepreneurship, or intrapreneurship.
The innovation process is a proven process broken down into five steps that can be found in different sources (Desouza, 2017).
Step 1: Idea Generation and Mobilization
Step 2: Advocating and Screening
Step 3: Idea Experimentation
Step 4: Idea Commercialization
Step 5: Diffusion and Implementation
According to The National Center for Science and Engineering Statistics (n.d.), “Of the estimated 4.9 million for-profit companies with at least one employee, 25% introduced an innovation during 2017-19. Eleven percent introduced one or more product innovations, and 22% introduced one or more business process innovations (para. 1).” If only 25% of for-profit organizations are innovating, 3.67 million are not.
Organizations that innovate, invest in innovation, and innovate during a crisis outperform their peers by 10% and outperform the market upward of 30% while recovering from a crisis (Furstenthal et al., 2021).
If organizations that innovate generate more revenue than those that do not, why are so many for-profit organizations failing at innovation? Innovation, like any business process, is a science that starts with a strong innovation strategy, but the problem goes beyond planning from top-level executives and management. It is the top-level executives and management.
Traditionally, organizations are structured with a top-down hierarchy. Still, innovation requires ideas from everyone, including front-line employees, who are often dismissed by management even though they interact with customers the most. You can’t teach an old dog new tricks, so maybe it’s time for them to ditch tradition, open their ears, and reverse organizational structure through a bottoms-up approach.
The problem goes beyond management and organizational structure. I could keep going but want to save something for my next post. In the comments, let me know why you think organizations fail to innovate. Thanks for reading, and I hope I’ve sparked your interest and curiosity to explore this topic further.
References
Desouza, K. C. (2017). Intrapreneurship: Managing ideas within your organization. University of Toronto Press Rotman-UTP Publishing.
Furstenthal, L., Hirt, M., & Roth, E. (2021, March 18). Innovation: Your launchpad out of the COVID-19 crisis. McKinsey & Company. https://www.mckinsey.com/capabilities/strategy-and-corporate-finance/our-insights/innovation-your-launchpad-out-of-the-covid-19-crisis
National Center for Science and Engineering Statistics. (n.d.). Innovation data from the 2020 Annual business survey | NSF – national … ncses.nsf.gov. https://ncses.nsf.gov/pubs/nsf23310
Innovative Leadership and Entrepreneurship: A Graduate Student's Perspective 