Do you know how to be an innovative leader? How can you communicate innovation to your team?
Peter F. Drucker argues that businesses have a social obligation to innovate since their stability impacts jobs and the economy. To enable innovation, businesses must restructure themselves to reward entrepreneurial thinking.
Continue reading to learn how to embrace creative leadership.
Innovation-Centered Leadership
Drucker writes that companies should set up their entrepreneurial ventures so that they get the necessary executive support and oversight. He lists specific creative leadership practices that businesses should adopt to prioritize and nurture entrepreneurial thinking:
- Include opportunities for growth and innovation in the company’s regular reports. This helps ensure that managers don’t overlook potential avenues for progress amid the constant demands of the company’s day-to-day operational issues.
- Dedicate regular meetings for company innovation teams to report on their progress, publicly reinforcing the importance of these efforts within the overall organizational culture.
- Ensure that top executives regularly engage directly with employees across various departments, actively listening to their perspectives on the company’s challenges and opportunities.
- Make innovation a key metric in the company’s self-evaluation process, with each project having a built-in feedback loop to measure results against expectations. These loops enable the business to refine and optimize its innovation efforts.
| Measuring and Communicating Innovation To include innovation on management reports and use it to measure your company’s progress, you’ll need a way to make it quantifiable. A tool for doing so that’s become popular in the years since Drucker’s writing is that of Objectives and Key Results (OKRs). In Measure What Matters, John Doerr explains the OKR concept as a goal-setting system in which individual objectives are achieved via measurable sub-goals (known as key results). The major benefits of OKRs are that they clarify your company’s focus by limiting how many objectives you pursue, they align your business’s efforts by being publicly visible, and they track your progress toward overall goals so you can make changes as needed. If quantifying your progress is step one, making business leaders listen is Drucker’s step two, but there are several ways to approach it. In Creativity, Inc., Pixar cofounder Ed Catmull describes how he opened communication via two methods—“Braintrust Meetings,” where new members were actively encouraged to share opinions, and “Notes Day,” a dedicated day for discussion on topics proposed by employees. Catmull made it clear that feedback wouldn’t lead to retaliation and that dialogue was a crucial part of their creative process. Both platforms helped Pixar’s leadership identify and resolve hidden issues, while bridging the gap between management and employees to focus on collective problem-solving. |
To effectively nurture innovative ventures, Drucker advises businesses to structure all entrepreneurial projects as separate entities from the core business because the people who manage the primary business will inevitably prioritize it over any new projects. Innovative ventures should have a direct reporting line to an executive in charge of innovation, bypassing the traditional middle-management hierarchy. This executive can provide oversight while serving as the champion for the company’s entrepreneurial efforts. The innovation sector should have distinct expectations and metrics tailored to its unique challenges, and while it may not yield immediate returns, it should be designed with the potential for exponential growth if successful.
(Shortform note: Structuring projects the way Drucker advises lets companies make informed decisions before scaling up innovations. A different method to achieve the same effect is the “bullets before cannonballs” approach described by Jim Collins and Morten T. Hansen in Great By Choice. By first “firing bullets”—new pilot products and services—companies can assess what works and what doesn’t with little cost and low risk. The primary goal of “bullets” is data collection and analysis, which in turn tells companies when to upscale to “cannonballs”—larger-scale implementations of their now-proven innovative concepts.)
