Leadership for innovation

Too many leaders are left disappointed by innovation. Instead, think more expansively to tap into a flow of creative ideas and new solutions, says Patrick Faniel

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Patrick Faniel, chief executive, Management Centre Europe

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New solutions are being demanded of all organisations in how they respond to the digital revolution and the transformation of the workplace. Most accept innovation is becoming an overarching imperative: over 80 percent of leaders surveyed by McKinsey & Co say it is one of their top three priorities. Yet most of them are disappointed in how it turns out: less then 10 percent say they are satisfied with how innovation is performing within their organizations.

So is it realistic for them to aspire to be innovators? or is it too far out of reach? are there better ways for them to go about it? and what difference can they make as leaders?

So innovation is best understood as a spectrum. At one end, radical new value can plainly be created with technology, as we are seeing in digital and life sciences. However, innovation is not just about new products or services, as many leaders mistakenly assume. Such a narrow view involves them in heavy upfront costs in research and assembling a specialist team. However, that’s just one top-down approach. There are many other options.

Innovation is widely accepted as creating or finding new value for your users. The inventor or the creator is the one who has the idea. The innovator, as the pioneering management guru Peter Drucker remarked, is the one who brings everything together and completes the circle of new value. In other words, the idea could have come from any number of different sources.

It is a much more expansive definition, which allows you to tap into the creative thinking in all areas of your business, not just one team of specialists. You align the whole company around innovation. At all levels, in all directions, you structure yourself to transform ideas into value, making that the foundation for how you reward people.

It is about creating a receptive culture that listens to the market, to your employees, to your suppliers and to your extended networks. You will find yourself in a flow of ideas about how to improve not just your products and services, but all your operations, systems and processes.  The question now becomes how to turn them into worthwhile action.

More than operators in the present

Here we reach another limitation for leaders. In reality, many organisations are happier being operators in the present rather than innovators for the future.

For Frank de Keyzer, who leads on innovation in the MCE faculty, it is the ‘yes but’ syndrome. ‘Yes but,’ he says, ‘is the same as no. Leaders are under such short-term pressure to deliver results, innovation is expected to work almost immediately, so there are always reasons to hesitate.’

‘Innovation, however, always come with risk. If leaders can’t tolerate failure, that’s why innovation doesn’t work too well. It’s better to keep an open mind, start small, learn from your mistakes and accept there are many ways to innovate. As a leader, you are competing in the present, of course, but you are constantly creating your future business, whether you acknowledge it or not.’

So leadership for innovation is about making sure that at every level people are ready to keep in mind ways to improve and are ready to look at the picture differently. You want to encourage and reward a culture that encourages the flow of ideas, that lets people shake things up and that dispels their fear of trying something new.

Everyone shaping Knauf’s innovative future

It is an approach that is being pursued at Knauf Insulation, one of the world’s largest manufacturers of insulation products and solutions. ‘Innovation is the driving force that keeps us ahead of the competition’, says Abdelmoula el Hadi, it head of innovation excellence EMEA/APAC, Knauf Insulation.

‘It encompasses much more than R&D; it’s our response to the relentless demand for improvement. In a highly competitive industry, we must demonstrate leadership not only in our technology but also in our systems and solutions. Innovation is the compass guiding us toward sustainable growth and the transformation of our industry.

‘We foster an innovation focus throughout our organisation by placing a strong emphasis on knowledge development, ideation and front-end innovation. We actively encourage our employees to engage in creative problem-solving and innovative thinking. We believe that everyone within the entire organisation plays a role in shaping our innovative future. We allocate dedicated time and resources for R&D projects, actively involve employees in idea generation, and promote continuous learning and skills development.

‘Our leaders play a crucial role in cascading innovation throughout the organisation. Key factors in their management of innovation drivers include setting clear innovation objectives; prioritising and allocating resources effectively; and actively promoting a culture of curiosity, experimentation, rapid prototyping and risk-taking. They lead by example and empower teams to bring forward innovative ideas and initiatives.'

• The full chapter on Leadership for Innovation appears in What Leadership is For, Patrick Faniel, Novaro Publishing, February 2024, ISBN: 978-1-7398640-7-1. See details here.