What is innovation? For businesses, this may mean renewing, changing, creating more effective processes or implementing new ideas, products or services. Being innovative does not mean you have to invent a new product that will revolutionize the way the world works. Innovation could be nothing more than a business changing their business model to adapt to an ever changing and growing market to provide a better product or service.
Why is innovation important? Innovation is a key element in an organizations ability to improve and grow their business. The old adage of “larger companies are eating the smaller” no longer applies in today’s technological society. Today’s adage would be more like the “faster passing the slower”. Technology is advancing and is advancing rapidly. For example, the Internet, once only accessible from your home or work computer, is now available through the creation of mobile technologies such as smart phones and tablets. With this technology, more and more firms are turning to these apps to enhance the way customers interact with their products and services and even boost their bottom lines. Between documenting expenses and processing credit cards from just about anywhere in the world; smartphone applications have changed the way many businesses operate.
For many organizations, structuring, managing and measuring innovation can be one of the firm’s greatest challenges. So how do companies encourage innovative behavior? “Think of innovation as the sequential process of 1) identifying problems, needs, or opportunities; 2) generating ideas to address selected problems, needs, or opportunities; 3) moving the best ideas to completion; and 4) generating value from those ideas. While the sequence or steps may sometimes differ, innovation always involves the generation of an idea and the shepherding of that idea into successful usage” (Link 2013). To put innovation in perspective, companies in today’s business environment that do not appreciate the importance of being innovative and do not fully exploit today’s technologies are subject to competitive threats and even market-share erosion. Leadership Models
In my opinion, the leadership models that best support the innovation process in an organization would be the Transformational and Behavioral theories as outlined by Doyle & Smith (2001). Internally focused organizations often lack fresh, insightful perspectives that should drive their business to greater heights. These companies often struggle to see beyond their own internal view, in which established mindsets and capabilities limit their ability to see and pursue new possibilities. The transformational leader “Raises our level of awareness, our level of consciousness about the significance of value of designated outcomes, and ways of reaching them”. (Doyle & Smith 2001).
Vineet Nayar used this type of approach to transform his company, HCL. How did he do this? As Nayar states “I spoke the truth as I saw it, offered ideas, told stories, asked questions and even danced” (Nayar 2010). Without exactly stating it, Nayar is providing a direction of where the company needs to go. He provided specifics about the company, that although the company revenues were up 30% annually, their competitors were up 40% or 50% so they were losing market share. He illustrated that the IT industry was rapidly changing and that customers were looking for long term partners and not one that only offered discreet services. Nayar then gathered 100 of the company’s top managers and collaboratively developed a strategy that nearly tripled its annual revenue.
Of all the leadership models, Behavior, in my opinion, is by far the most important. As a leader, part of their job is to inspire the people around you to push themselves – and, in turn, the company – to greatness. To do this, a leader must “lead by example”. An example of this is what Nayar did with his company’s 360-degree performance review. He...
References: Doyle, M. E., & Smith, M. K. (2001). Classical leadership. Retrieved from http://www.infed.org/leadership/traditional_leadership.htm.
Dyer, J. H., Gregersen, H. B., & Christensen, C. M. (2011). The Innovator 's DNA: Mastering the Five Skills of Disruptive Innovators. Boston, MA: Harvard Business School Publishing.
Hitt, M., Haynes, K., Serpa, R. (2010). Strategic Leadership for the 21st
Century. Business Horizon, 53(5), 437-444. Retrieved from http://www.sciencedirect.com.library.capella.edu/science/article/pii/S0007681310000662
Link, J. (2013, March) Idea-Links - The New Creativity, Creativity vs. Innovation: Yes, there is a difference. Retrieved from http://thenewcreativity.com/creativity-vs-innovation-yes-there-is-a-difference/#sthash.toR65rtf.dpuf
Nayar, V. (2010). A maverick CEO explains how he persuaded his team to leap into the future. Harvard Business Review, 88(6), 110–11. Retrieved from http://web.b.ebscohost.com.library.capella.edu/ehost/pdfviewer/pdfviewer?sid=56c2bd7a-67e6-4106-b913-32afe6a2abca%40sessionmgr113&vid=5&hid=120
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