The entrepreneurial tendency to chase the next great idea certainly does not translate into a sustainable business model, so how do smart leaders balance the need to innovate with protecting their organization’s viability?
Innovation vs Mere Change
They say that the only thing that stays constant is change – to some degree, everything and everyone changes over time. Of course, we like to think of that change as positive – progress, evolution, advances. In some cases, though, change can be the opposite, in which the individual falls behind the development of others through an inability to or resistance towards movement away from the status quo. This happens in organizations, too, which, at their most basic, are collections of individuals who come together to achieve shared goals. While those members may each bring their own preferences towards change, how they approach it as an organization will more often than not reflect the attitudes of its key leaders and their comfort with not just embracing change but actively seeking it through innovation.
Most dictionaries define “innovate” as the introduction of something new or altering any established thing. While this is certainly the core element of innovation, we believe to define the concept accurately, we must modify that introduction by emphasizing that it is the voluntary nature of change, driven by belief in the potential of its outcomes, that distinguishes innovation from mere change. Innovators see possibilities where others see obstacles and are driven to pursue those opportunities wherever they may lead. While this spirit is celebrated in the individual – the entrepreneur whose audacious dream is realized despite the naysayers is the foundation of many popular films and novels, not to mention the entire premise of Shark Tank – in an organization, the innovative spark that led to its creation is pushed aside for the tried-and-true, the methodical, and the reliable. After all, those innovators – those entrepreneurs – now must consider not just their own success, but that of the organization’s members and shareholders: when the stakes are higher, the appetite for risk usually recedes.
Risk and the American Mythos
Risk is at the center of innovation and is a very old concept. Chaucer introduced the idiom “nothing ventured, nothing gained” in his 14th century Canterbury Tales, adapting similar French and Icelandic proverbs, and its central premise is alive and well today. We remind ourselves during particularly grueling workouts to remember “no pain, no gain” as we push through that last quarter mile. And the idea is not relegated to the realm of proverbs and pithy sayings; weighing the potential gains against the potential losses of proposed actions is the foundation of cost-benefit analysis. Much of the American mythology tells of dreamers’ willingness to persevere against long odds, dating back to the original longshot of the Declaration of Independence, and reverberating through two and a half centuries of successes built on hard work and American ingenuity.
However, risk cuts both ways. For every success, there is often a long line of failures and setbacks, each of which brings costs and erects barriers to other opportunities. Once an organization is built around an innovation, the focus shifts to maintaining it and its place in the market. It is understandable, therefore, that even the most audacious dreamer can become less willing to wager their organization’s future to chase new ideas. We can see this dynamic most recently in the tech industry, where the organizational “campuses” filled with ping-pong tables and kombucha bars to spark creativity are more and more frequently giving way to restructuring efforts, like that at Facebook parent company, Meta, that eliminate “projects that aren’t performing or may no longer be crucial” (Zuckerberg, 2023). The challenges posed to organizations by economic and other external factors that are beyond their ability to control can understandably lead many, if not most, leaders to shy away from taking risks, an attitude certainly reinforced by the uniformly negative reaction of stock markets to uncertainty. How then does a leader reconcile the persistent reality of change with this paradigm that punishes risk-taking?
We propose that the answer lies in how we conceive of innovation and, importantly, the influence of the leader in fostering an innovative culture in the organization. Recall the definition of innovation and how we qualified it as voluntary and, therefore, something that an individual or organization does with intention. This conception differs from change, which (too) often is something that happens to an organization, thereby driving the members into a reactive, or defensive, posture. The sudden, deep disruption that came with the COVID-19 pandemic forced immediate change in how, where, and why we acted within our organizations. For some, these changes, no matter how profound, were made begrudgingly because they were unwelcome, temporary, and to be reversed as quickly as possible in an attempt to “get back to normal.” These were an extreme form of how many see change, as something that happens externally, thereby forcing leaders to take actions they would, if left to their own devices, avoid or delay.
Innovation, on the other hand, is about deliberately, intentionally embracing change and the opportunities it may bring. Many organizations begin as outgrowths of innovation – a new idea, a better idea, a revolutionary idea – that inspires others to collaborate. In our market-driven economy, the profit motive is a powerful one, predicated on finding new and novel methods of meeting consumer needs and wants. The world may beat a path to your door if you build a better mousetrap, but they are just as likely to move on to another door for the next better mousetrap. The entrepreneurial tendency to chase the latest great idea certainly does not translate into a sustainable business model, so how do smart leaders balance the need to innovate with protecting their organization’s viability?
Inspire the Innovation Mindset
The key is embracing the innovation mindset. This is a holistic perspective that focuses on constructing new products or processes that add value for both customers and – critically – employees. It is a way of thinking about how we do business that prioritizes creativity, curiosity, collaboration, and experimentation in approaching challenges of all types. Rather than leaving idea generation to the “creative types,” members at every level and function are encouraged – and rewarded – for tapping into their imaginations and understanding of the organization and the elements that influence it. Importantly, they are given the space to try and, sometimes, to fail. Because failure is always a potential outcome when taking a risk, innovative thinkers don’t shy away from it. Of course, we all prefer not to fail, but for those with an innovative mindset, failure offers its own opportunities – to learn, to grow, and to improve their understanding of the forces at play in their industry.
Unfortunately, our organizations have become steadily more risk-averse and prone to short-term thinking over the past decades. We see the results of this trend over and over, especially when it comes to devoting a key resource: time. New ideas can take time to realize fully, requiring patience and perseverance that is too often in short supply in organizations. But true innovation is more than just the next “good” idea; it builds upon the current state to create something new and, like any transformation, carries the seeds of the original within it. Creativity is a process, one that often takes space to flourish and does not take kindly to being rushed. Studies have shown that brainstorming – one of the most commonly used “creativity” techniques – is most effective when there are at least three rounds of it because of our natural tendency to self-censor ideas as we go.
The Leader’s Role in Innovation
When it comes to innovating in the workplace, leaders set the tone both directly and indirectly. Leaders who embrace the innovative mindset create environments in which experimentation is encouraged, participation is valued, and failure is considered part of the cost of doing business (to a certain extent). They promote members into management positions who share this perspective. They recognize and communicate the importance of scanning the organizational landscape, not just to identify possible threats but to reveal opportunities; importantly, they expect and empower organizational members at all levels to do the same.
Leaders also set the pace for innovation throughout the organization, weighing factors ranging from industrial forces to talent bench strength. This is not to suggest that they embrace change simply for change’s sake; on the contrary, decisions influencing organizational performance, growth, and development are tied closely to its overall mission, vision, values, and strategic goals. Infusing this perspective throughout the organization requires leaders to codify these and share them across all levels and segments of the workforce, allowing employees to connect their ideas and inspirations with the organization’s needs and the potential outcomes of realizing novel approaches.
Quick Tips for Embracing the Innovation Mindset
1. Cultivate a culture of innovation: Encourage creativity, curiosity, collaboration, and experimentation at every level of your organization. Foster an environment where employees feel comfortable sharing ideas and taking risks.
2. Promote intentional innovation: Rather than simply reacting to change, embrace it proactively and deliberately. Seek opportunities to innovate and improve, both internally and externally.
3. Balance risk-taking and organizational stability: Understand the need for taking risks in order to innovate, but ensure that these risks are aligned with your organization's overall mission, vision, values, and strategic goals.
4. Embrace failure as a learning opportunity: Recognize that failure is a natural part of the innovation process. Use setbacks as opportunities for growth and improvement, rather than reasons to abandon innovation efforts.
5. Invest in long-term thinking: Resist the temptation to focus solely on short-term gains. Give new ideas and projects the time and resources needed to fully develop and reach their potential.
6. Encourage diverse perspectives: Tap into the collective wisdom of your team by seeking input from employees at all levels and across different functions. This can lead to novel ideas and solutions.
7. Iterate and refine: Utilize techniques like brainstorming to generate and refine ideas over multiple rounds. This can help overcome self-censorship and lead to more innovative solutions.
8. Lead by example: As a leader, demonstrate your commitment to innovation by embracing the innovation mindset yourself. This sets the tone for your organization and encourages others to follow suit.
9. Empower employees: Give employees the autonomy and resources they need to explore new ideas and take risks. This can help foster a sense of ownership and commitment to the innovation process.
10. Communicate and align: Ensure that your organization's mission, vision, values, and strategic goals are clearly communicated to employees. This helps align innovation efforts with the
overarching objectives of the organization.
The landscape in which we lead continues to regenerate and evolve. By fostering a culture of creativity, curiosity, collaboration, and experimentation, leaders can strike a balance between maintaining organizational stability and pursuing bold, innovative ideas. Ultimately, nurturing an innovation mindset empowers employees at all levels to contribute to the organization's growth and adaptability, ensuring its long-term viability in our regenerative societal ecosystem.