EN 
DE What does leadership have to do with innovation?
Author: Andreas Pfeiffer, Ginzinger electronic systems
Contribution – Embedded Software Engineering Congress 2015
Innovation is the central theme of every organization. "We need to become more innovative" is a common refrain. In a time of constant change, the relevant criterion for a company's strength is not its size, but its adaptability to changing conditions. Today, leaders face the choice of either reacting to change or actively shaping it.
Rapid changes in our economy are driving our pursuit of innovation. But innovation cannot be mandated. Some organizations and structures stifle new approaches and ideas in their early stages. Can leaders actively counteract this and foster innovation? Reduced predictability and the ability to deal with the unexpected are becoming key leadership skills.
The Gallup Engagement Index [1] of recent years shows that the behavior of superiors is often the reason for low employee engagement with a company. This directly impacts personal performance and willingness to innovate. However, the success or failure of a new product does not depend solely on that one brilliant idea. Rather, innovative companies are characterized by an organizational culture, sufficient freedom and trust, the courage to fail, and, last but not least, consistent leadership.
Leadership between routine and innovation
The numerous and simultaneous changes lead to a conflict between routine and innovation. A focus on routine often obscures the view of what is different and new. Successful companies have learned to maintain a healthy balance between routine and innovation..
Innovation can be measured
Innovation involves several steps: an idea becomes a product, and only when the product succeeds in the market do we speak of an innovation. Innovative products sustainably generate new revenue and business areas. Therefore, it is only in retrospect that one can see whether a product is innovative. Successful companies establish key performance indicators (KPIs) to continuously monitor and manage their innovative strength.
The good things are so close at hand.
No company lacks ideas. However, creativity is often not valued, and ideas are not implemented. Typical approval processes and decision-making bodies focus on quick, secure returns and are therefore hardly innovative. Successful companies dare to present their ideas early on to large groups of their own employees or key customers and solicit their feedback.
The inhibitors inhibit
Day-to-day operations and an organization's preoccupation with itself rarely foster innovation. Proliferating processes, hierarchies, and excessive bureaucracy stifle new ideas in their infancy. Economic dependencies and a culture of fear stifle the courage to take risks and think outside the box. The flow of ideas dries up when others take credit for others' work. Leaders in successful, innovative companies create space for freedom, a culture of mutual respect, and consistently exemplify their values.
Questions about innovations
Paradoxical questions like, "What can we do to destroy our own company?" are often helpful. This helps to break down entrenched thought patterns and move into new dimensions. Only companies that constantly question themselves remain stable.
Leaders, too, should constantly question their own actions and be continuously aware of their own preferences and their consequences. Has innovation been defined within the company, and do I, as a leader, set the direction? Are ideas systematically collected, evaluated, and selected? Are sufficient resources provided for experimentation, development, and radical innovation? Are there clear responsibilities for innovation? Is innovation regularly on the agenda? Are lessons learned from failures, and is there a reward system for this?
Solutions should not be imposed, but developed collaboratively by everyone, from the outside in. This requires a great deal of patience and consistency at the management level.
Six success factors for how innovation can succeed
At the Hernstein Expert Forum 2014 [2] in Vienna, senior employees from different industries, researchers and management consultants identified in working groups the following success factors that managers should internalize in order to create an innovation-friendly climate.
- Strategy and structure
The path of change must be consciously pursued and requires a holistic approach. This necessitates a strong vision and an explicit strategy, as well as visible commitment from senior management. Clear and transparent structures that create space and room for creativity are essential. It must be clarified in advance who will select the ideas and according to which decision criteria. It is an illusion to believe that innovation can succeed alongside day-to-day operations. - Try things out and allow mistakes
The fastest way often lies in a step-by-step approach → Rapid Prototyping. Instead of questioning the viability of projects during the planning phase, the question is asked, "Is it good enough to try?" Instead of ambitious business plans for the next 20 years, the focus is simply on describing the next step, the next goal. If the goal is achieved, a brief review follows, and then the next step. If the goal is missed, the process doesn't involve nitpicking, optimization, and another attempt, but rather the project's termination. Making mistakes is helpful and drives innovation. A willingness to take risks, a proactive approach to failure, and critical reflection are explicitly encouraged. Setbacks, especially in industrial companies, are viewed as necessary development steps toward new products. Ideally, lessons are learned from mistakes and even "rewarded," as in Failure Parties. - Many minds have many ideas.
Innovation thrives on diversity of opinion and differences. Many solutions to problems come from people outside the field, who approach a task with entirely different questions. Open innovation platforms like Innocentive impressively demonstrate how crowdsourcing can generate creative solutions. Innovation processes achieve their own dynamic when they are conducted, at least partially, openly, with the help of external researchers, user groups, partner companies, and customers. The challenge for leaders lies in assembling a team of diverse personalities and empowering each individual. - Tailor-made suit instead of ready-to-wear clothing
Understanding the context is crucial: Many good ideas, if well-considered, can be transferred to other companies, at least in their core principles. However, this always requires a thorough examination of whether the innovation aligns with the company's own culture and business model. Instead of simply copying, it's better to consider what you can do better instead. - Shaping change vs. being changed
Everyone knows how difficult it is to change one's own behaviors or habits. Behavioral change is even more challenging in complex organizations. Change creates uncertainty and often brings unrest and chaos. Innovations aren't always met with enthusiasm. For many people, change triggers fear and stress, leading to blockages that leave no energy for creativity and personal growth. As a leader, am I modeling the desired behavior? Having insights and feeling inspired isn't harmful. Even more important, however, is being open to new ideas and questions from others, appreciating the unthinkable without trivializing or devaluing it. New things take time and sometimes require slowing down. - Vfrom Best Practice to Leading Practice
How does one go from being a proven practice to a pioneer? This is achieved by anticipating challenges and solutions even before the customer is aware of the problem. Consistent customer focus generates valuable impetus for product development, often achieving maximum impact with minimal effort. Sending technicians on occasional road trips to customers can work wonders.
Summary
Innovation requires freedom and leadership. This sounds contradictory, but it isn't. Only when a company creates an environment where employees are allowed, able, and willing to be innovative, and where innovation isn't left to chance but rather a systematic approach guarantees success, will outstanding new products be realized. A good organization embraces change. Does the company truly want innovation, or are these just empty promises? Establishing a culture of innovation is a change process: there will be enthusiasts and also many undecided individuals for whom the actions of leaders serve as a model and an indicator of which side they will ultimately choose. Leadership in unstable times is like a journey of discovery. Curiosity, courage, and determination will allow you to explore uncharted territory.
Bibliography and list of sources
[1] www.gallup.de/183104/german-engagement-index.aspx
[2] www.hernstein.at/Wissenswert/News/20140606-Das-war-der-Expertentag-2014
Process, product and project management – our training & coaching
Do you want to bring yourself up to date with the latest technology?
Then find out more here MircoConsult offers training courses/seminars/workshops and individual coaching on the topics of process, project and product management.
Training & coaching on the other topics in our portfolio can be found here. here.
Process, product and project management – expertise
Valuable expertise in process, project and product management is available. here Available for you to download free of charge.
You can find expertise on other topics in our portfolio here. here.
