The 7 characteristics of innovative leadership
Innovative leadership is the hallmark of successful organizations in today’s business environment. A combination of characteristics — including a healthy relationship with risk-taking combined with a highly collaborative work environment — helps the innovative leader stay ahead of changing market demands.
While many companies would agree that having an innovative culture is important to their success, fewer know how to cultivate an innovative leadership style that encourages creative thinking and idea generation across the entire organization.
What is innovative leadership?
Innovative leadership is an approach to leadership that centralizes the importance of change, flexibility, and adaptability. Innovative companies and leaders are characterized by their ability to quickly create and develop new products, services, processes, and business practices, all of which help them stay ahead of a rapidly changing market and respond to customers’ shifting expectations.
Among the advantages innovative leadership brings to organizations are:
- Better problem-solving skills
- Higher customer satisfaction
- Greater organizational cohesion
- Increased employee engagement
- Better hiring practices and retention rates
- Ability to adapt products and services quickly to meet market needs
While innovation has always been a key part of organizational success, the rapid technological, economic, social, and environmental changes that have taken place in recent years have made it an indispensable part of an organization’s ability to deliver value to customers and continue to fuel long-term growth and stability.
The importance of innovative leadership in the modern business environment
B2B and B2C markets are always changing, and customer expectations are in a constant state of flux. The increasing sophistication of digital technologies has given customers access to a much wider range and depth of information, making them savvy consumers who can easily find products and services that match their expectations.
Businesses that want to stay ahead of this change and stay relevant in the eyes of their customers have to learn to keep their eyes on the future, take measured risks, and adapt to an ever-evolving business environment. Organizations that demonstrate an unwillingness (or inability), or are too slow to adapt risk getting overwhelmed by change and falling behind their competitors.
In that case, companies will either slip into obscurity and eventually fail, or they will have to adopt the innovative solutions of their competitors, forcing them to play catch-up from a lagging position. Trailblazing those innovations not only keeps organizations sharp and market-leading, but also demonstrates to customers that they are committed to continuous improvement.
How business leaders drive innovation despite changing circumstances
Many organizations have both innovative leaders and risk-averse leaders. It is important to strike a balance between these two tendencies; an overly conservative approach to leadership can cause organizations to become stagnant and unmoving, threatening their long-term viability.
However, an overcommitment to an innovation strategy can be overwhelming for some employees and organizations that need some sense of certainty and stability. Employees and teams can quickly become disengaged if the goalposts are constantly shifting. When pursuing change, leaders need to be cognizant of the appropriate balance of innovation and stability, while also encouraging team members to voice their concerns and ensuring all steps in the process are communicated clearly and effectively.
The 7 core competencies that drive innovative leadership
While innovative leaders at different organizations often have their proven recipes for success, these are the 7 leadership skills that typically define the most successful ones:
1. Strategic vision
There is a substantial overlap between innovative and strategic leadership. Leaders who are both strategic and innovative don’t just take risks for the sake of taking them, and they never approach change without a plan. Instead, they meticulously assess current market trends, anticipate trends that are coming in the future, and pinpoint those that are most likely to deliver value.
They also take the time to develop a defined plan for achieving their objectives, and they know how to communicate those plans to the rest of the organization. The strategic mind of the innovative leader helps to ensure steady progress toward goals and alignment around expectations.
The customer is the north star for these leaders. Specifically, they spend a great deal of their time learning about the unique needs, challenges, and goals of their customers. The best innovative leaders see what customers need before the customers are even aware of it. By keeping their eyes on emerging market trends, innovative leaders are best able to understand how changes in the market will impact their customers.
All of this information is used to inform internal decision-making around strategy and processes. Innovative leaders will think creatively about what solutions they can implement that are best suited to help their customers overcome challenges.
3. Psychologically safe work environment
Innovative companies are highly collaborative places that encourage information-sharing from all corners of the business. For that reason, the innovative leader knows how important it is to create a psychologically safe work environment in which every employee feels comfortable and secure enough to share their thoughts, ideas, and perspectives.
This type of workplace is defined by a free flow of new ideas. Not only are employees allowed to share their thoughts openly, but the innovative leader will meaningfully consider and incorporate their views into their plans, demonstrating to employees that they play a valued role in the wider function of the organization.
Sometimes the hardest part about taking risks is approaching them with a calm, steady mindset and believing they will work out. Innovative leaders exude a sense of optimism that cascades down to the rest of the organization. They instinctively believe the future will be better than the present and have faith in both their and the team’s ability to make their risks pay off.
Of course, they also understand that risks don’t always work out. Here too, the innovative leader takes the optimistic route, accepting that failure is a part of risk-taking and choosing to see missed opportunities as a chance to learn and develop further.
5. Great communication
Innovative leaders operate with an open style of communication, ensuring all members of the organization feel like they can share information with colleagues and leaders without fear of judgment or retribution.
Innovative leaders spend time establishing the institutional mechanisms that facilitate communication and the exchange of ideas. For example, leaders might host monthly open forums to give employees the chance to raise concerns or share suggestions with their peers in real time. They might also create virtual suggestion boxes to encourage idea generation anonymously.
By their nature, innovative leaders understand that there is no single best way of doing things, and there is always room to improve existing processes and services. These types of business leaders create a culture characterized by openness. Not only do they encourage employees to bring their true, authentic selves to work, they also encourage people to use their creative thinking skillset to challenge existing processes and think of new ways to get things done.
7. Balance of deliberation and action
Despite facilitating a culture of openness and strong communication, innovative leaders are not all-talk-and-no-action. They take the time to deliberate across teams and departments, ensuring all stakeholders have their say before a decision is made. They value the importance of consensus and understand that implementing change requires buy-in from across the organization.
However, innovative leaders are defined by action more than words. They never deliberate for longer than they need to, and once a decision has been made they are ready to turn the gears and put it into motion.
Innovative leadership development with The Bailey Group
At The Bailey Group, we work with clients to develop an innovative style of leadership by helping them to change their mindsets. We encourage them to approach situations and problems with a greater sense of curiosity, challenging them to engage with key stakeholders, attend events and read widely, all with the view that compelling, new ideas can be found just about anywhere.
Importantly, our coaching approach centralizes the importance of “leveling up” our clients. If the marketing director has moved into the C-suite, for example, they have to immediately Level Up to enterprise-wide thinking and leave the needs of the marketing department to the new leadership in that functional area. Readjusting to this higher-level view can open new opportunities for innovative solutions to emerge. All of our coaching engagements are guided by this principle.
If you want to enhance your leadership style and unlock your full potential, reach out to our team to start a conversation today.