The Global Leadership Imperative: Building an Innovation Engine
Innovate to Grow
Failing to innovate can put global organizations at risk and diminish their ability to gain or sustain a competitive advantage. Oliver Wyman – Delta Organization & Leadership and the Economist Intelligence Unit took an in-depth look at the challenge of leading and organizing for innovation through a survey and interviews with senior executives.
Ultimately, innovation must touch every corner of an organization, but very few have achieved that ideal state. Widespread notions such as "innovation must be driven from the bottom up" and "innovation is about hot new products" don’t offer much – if any – wisdom. If it is to become part of an organization’s DNA, top managers must define innovation as implementing ideas that create value and treat it like any other business process that requires systems, processes, and people to successfully drive it.
Getting to this point is not easy. Executives who want to build an innovation engine are not likely to find a complete guide in a generic framework. Instead, they can focus on three areas identified as crucial by companies that excel at innovation:
- Their leaders create an environment – or climate – where innovation thrives.
- The importance of innovation and the critical role every employee plays are hard-wired into the company’s culture.
- Organizational structures support generation and execution of new ideas.
Rise to the Challenge
Key messages that emerged from our research can help business leaders nurture an entrepreneurial spirit even across very large organizations and mature industries.
The Right Leaders
It’s crucial to develop whole leaders – those who use their heads, demonstrate heart, and act with guts. Leadership competencies that create a climate for innovation focus more on how to instill values than on traditional management skills.
The Right Climate
Innovation should be everyone’s responsibility, but this will happen only if people work in an environment that values and rewards their contributions. Developing leaders who can create this kind of climate is a key challenge, but there are specific areas that leaders can focus on to get the desired results.
The Vision
Leaders must create a compelling view of the organization, be able to articulate it, and become champions for innovation.
The Structure and Processes
Business processes can help leaders assess creative ideas, put them into action, and enable execution.
The Values and Culture
Innovation must be a business priority supported by a culture that encourages risk taking, allows for challenges to the status quo, and welcomes freedom of expression. When companies achieve this state, they support a process of continuous innovation.
Start at the Top
While the conditions that promote innovation must be supported by leaders across the company, the innovation process must start at the highest levels. Enterprise leaders must think about the three key drivers—leadership, culture, and organizational structure and processes – in an integrated and mutually reinforcing way. Only then can they build an organization that is truly an innovation engine – one that develops ideas that create real value.
