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Creating Generational Legacies

Wednesday, September 7, 2016

How leadership affects innovation: Training employees to think innovatively from the top down

In an era where business success is often driven by the ability of an organisation to innovate – either with the products or services they provide, or in the way that they operate to gain competitive advantage – the role of a leader is harder than ever. Many CEOs and leaders frequently ponder the question of how to get their employees to be more innovative and, actually, the answer is most likely to be that it is a direct result of their leadership!

Daniel Goleman’s Leadership That Gets Resultsa landmark 2000 Harvard Business Review study of over 3,000 middle-level managers in the US suggested that a manager’s leadership style was responsible for 30% of the company’s bottom-line profitability. It also identified six leadership styles:

  • The pacesetting leader
  • The authoritative leader
  • The affiliative leader
  • The coaching leader
  • The coercive leader
  • The democratic leader

While categorising leadership styles in this way can be useful to enable leaders to be more self-aware, the reality is that most leaders will, and should, employ most or all of these styles at a different time, situation or setting. Having said that, when looking at the impact of leadership on innovation in an organisation, it is interesting to broaden out the leadership styles to build a picture of how they can nurture, or indeed restrict innovation.

Looking at it simplistically, the three core leadership styles that garner very different results are: ‘laissez-faire’, autocratic and democratic, all of which will be defined and elaborated on further in the article. Firstly, in order to understand how these styles impact innovation, we need to define what is innovation.

Innovation could be described as creating new values, or capturing new values in a new way. It is the outcome of a creative and forward-thinking process or mind-set that subsequently affects change.

With that said, the skills, conditions and motivations needed to facilitate innovation are equally important. You could argue that if someone doesn’t have the skills needed to be innovative, then they won’t ever be. However, I would suggest that everyone has the capacity to come up with ideas, the cornerstone of innovation. As one of the oldest adages in business goes: ‘No idea is a bad idea’. Therefore, it must be the conditions and motivations that are created by an organisation that spark innovation.   

Assessing the three leadership styles in turn and their impact on employees, we can begin to uncover the kinds of behaviours and practices leaders need to employ to foster innovation in their organisation.

Laissez-faire leaders essentially leave employees to it. They empower their staff to make decisions and are reluctant to interfere. The result can be highly motivated employees who ‘own’ their work, relish the challenges and may therefore come up with the best innovative ideas. However, this style can also result in excessive stress in other employees, which could limit their ability to think outside the box and dream big. A key result of the laissez-faire style is that employees take responsibility for their work and decisions and they therefore learn from mistakes and grow as leaders themselves. But, as we all know, not everyone can take that kind of pressure and, in most organisations, some level of leadership support, direction and responsibility is needed for most employees to flourish.

Autocratic leaders make all the decisions themselves and don’t trust anyone else to do so. The result is obvious – less motivated employees who are less likely to propose new ideas and suggestions in a ‘the boss knows best’ climate. When employees accept that they should do what someone else wants them to do, with no questions asked, then the results will be as expected. As an example, a common  characteristic of some of the world’s greatest leaders is that they have the ability to nurture other leaders. With new leaders, will come new ideas and anyone who doesn’t appreciate that is unfortunately unlikely to succeed.

Democratic leaders act collaboratively and foster a culture of joint responsibility. Employees are likely to feel supported and encouraged to think big, but with the safety net of being able to learn from others and not having to shoulder excessive responsibility or burden. This style surely creates the best conditions for nurturing innovation. However, as mentioned earlier, different styles are needed for different people and situations. So, although democracy is more likely to feed innovation, in certain circumstances, autocratic or ‘laissez-faire’ leadership might just provide the conditions for your best innovations.

The true skill of a leader is in flexing his or her style to suit changing conditions and situations with the aim of getting the best out of people and the organisation. Nurturing innovation is no exception.

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