Leading in the Innovation AgeInnovation.  A concept that has always been a part of business, continuous improvement or by the Japanese term of “kaizen”: – A philosophy of continual improvement in both business and personal endevours. Innovation isn’t new. Innovation has been the challenge for us to make our lives and the world better. It has always been there. It’s innovation leadership that is important.

Today, it has been argued that the pace of change is moving faster than at any other time in history. With this “innovation” has taken on critical importance for business. Technology has enabled businesses to improve processes for customers and the resultant businesses are changing the landscape and business environment.

Disruption is now a constant threat to all businesses currently in existence to the extent that highly regulated businesses are not immune as we have seen the taxi industry, worldwide, changed at the hands of Uber, a company which is still bleeding money in pursuit of market share and yet to make a profit. Disruption is a threat and symbolises the innovation age for many. The leadership challenges to lead in this fast-changing world are vast and leaders that are evolving have a greater chance of success today.

The highway of business is littered with the carcasses of businesses who refuses to change, or chose not to change, or didn’t know how to change. Maybe they didn’t believe they had to change. Maybe they thought they had a right to be in business and ultimately lost that right. Their innovation leadership was lacking.

How do we successfully retain that right to be in business?

The Research.

In 2016, the Centre of Workplace Leadership, in conjunction with the Melbourne University released the “Study of Australian Leadership- Do Australian Leaders Have What it Takes?”  This was the largest study ever conducted amongst Australian businesses and workplace and is the most comprehensive research completed to date. It follows on from other research projects that have been conducted on Australian leadership since 1995.

The first major research and the one most often quoted as changing Australian leadership was the Karpin Report, or “Australia. Industry Task Force on Leadership and Management Skills (1995) Enterprising nation: renewing Australia’s managers to meet the challenges of the Asia-Pacific century” It started the national discussion on how better to equip our management to lead in the changing world and the changing dynamics of a growing South- East Asia.

In 2009, Professor Roy Green released “Management Matters in Australia, Just How Productive are We?” a research report from  the  Australian Management Practices and Productivity global benchmarking project and then this was followed by the report called ‘Karpin Revisited : Leadership and Management Challenges in Australia” by Innovation & Business Skills Australia.

The Findings

Australia has had comprehensive research compiled on leadership and management. This report provides some key findings from these in leadership and innovation. It is important to note, this is not a comprehensive review of all the findings found in these comprehensive reports. They are all available publicly and details are found in the endnotes.

Karpin Report 1995

The Karpin Report(1995) identified the following:

“Management performance and development processes must be rapidly upgraded if we are to match the economic performance of our international competitors. … give greater emphasis to international operations, advanced technological and technical processes, innovation, quality and the management of change”

“Increasing globalisation, widespread technological innovation and pressure on business to customise products and services have created an international business environment that would be unrecognisable to the manager of fifteen years ago.  As the business environment changes, so do the skills and characteristics required of those employees who are best positioned to interpret and influence future changes; namely managers.”

“Promote and encourage awareness of the importance of leadership and management skills to enterprise productivity, innovation and international competitiveness, and recommend measures for fostering enterprise commitment to the continual development of managers.”

 “The frontline manager or supervisor has a critical role in working with employees to achieve greater productivity, innovation, quality and flexibility”

 “Key management skills and competencies are used by some enterprises to signal the changes in behaviour required to meet an emerging business innovation or change such as the need for broader cross functional management skills in the case of a business process re-engineering initiative.”

 Management Matters (2009)

Professor Roy Green delivered Management Matters in 2009 and highlighted the following:

“The white paper contends that “Australia’s innovation system will need to work better if we want to maintain the way of life we value so much”, and notes the implication that: “One future focus of the Australian Government’s industry and innovation policies will be on building innovation capacity and performance at the enterprise level”.

“a start has been made to explicitly incorporate management and leadership development into Australia’s innovation system, but there is scope for greater emphasis on the innovative and management capability of firms and organisations in fast moving local and international markets.”

“Reviewing Australia’s standing, the World Economic Forum concludes in the same report, that “To progress even further, the country will need to improve on several measures of business sophistication and strengthen its innovation capacity”

“As such innovation and management performance go hand in hand. In urging enterprise level innovation, growth and prosperity.”

“Making innovation work requires a workforce with sophisticated skills of all kinds – including leadership and management skills. It also requires cooperative workplaces in which creativity is encouraged. Few organisations command all the skills needed to innovate successfully on their own. They must network and collaborate – locally and globally”

Karpin Revisited (2011)

IN 2011, Innovation and Business Skills revisited the Karpin report to identify how effective Australia had been implementing the findings from the Karpin Report from 1995. It found:

The challenge of managing innovation and creativity within organisations has been a notable theme of the post-Karpin era, which was foreseen in the 1995 report. The Karpin Report strongly urged movement towards a more entrepreneurial economy and organisational structure. However, the world has moved even faster than was envisaged in 1995.

It has been commented that Australia could do better at “using technology to advantage”. For a country that prides itself on having a very sound science and technology base, Australia has not been very successful at building a large cohort of world class innovation-based organisations, outside of the resources sector. Karpin recommended that significant progress should be made from the ground up in innovation and entrepreneurial skills and culture development, from school, through universities to the workplace.

 Yet it is clear that in quite a few organisations, outstanding leaders can and do implement practices and cultures that bring out the best in staff on a widespread basis, leading to sound use of technology, successful implementation of innovations, high service levels and ultimately outperformance in business terms.

 It seems that there is a crucial difference between intellectually understanding effective practices and being able to systematically implement them. There appears to be a limited ‘ability to deliver’ among managers and leaders.

 Well managed companies can create new forms of value through innovation, whereas poorly managed companies cannot. Well managed companies can provide sound quality and customer service, whereas poorly managed companies do not.

 The Study of Australian Leadership (2016)

 In the most comprehensive research ever conducted in Australia, The Workplace Centre of Leadership produced the Study of Australian Leadership. It found:

Few Australian organisations report high levels of innovation

Innovation drives growth and productivity. Yet most organisations struggle to turn knowledge and ideas into successful innovations. Too few (18%) private sector organisations report high levels of radical innovation.

 Although innovation drives growth and productivity, the evidence shows that Australian organisations struggle to turn knowledge and ideas into successful innovation

SAL shows that investing in leadership development is positively associated with leader capabilities and self-efficacy, which in turn significantly betters workplace performance and innovation. Yet the findings reveal that many workplaces do not invest in leadership development at all, or invest very little

 The Challenges We Face.

There are some constant themes presented by the research when it comes to leadership and innovation. There have been recurring themes of the need to lift the level of leadership and to be intentional in the development of leaders to ensure our capability of the fast-changing world.

A lot has been done, but more needs to happen. As business owners and executives our greatest challenge often comes with acceptance of our need to grow, which is quickly followed by a requirement to determine a return on investment.

The Study of Australian Leadership highlights that most businesses underinvest in leadership development and this is especially relevant for our front-line leaders. The leaders most responsible for customer service, sales and execution of strategies are the ones least invested in. For every ten dollars spent on senior leadership development, just one dollar is invested in the front line. A damming statistic, and one that will continue to inhibit the performance potential of business.

In the world of innovation, we need leaders to build trust quickly and implement strategy effectively. Thanks to the Study of Australian Leadership, we now have a roadmap that if implemented will deliver a highly innovative business driven from culture built on strong leadership.

Characteristics of Highly Innovative Companies

The SAL highlighted that highly innovative companies have four main characteristics. Only 18% of private companies reported high levels of radical innovation, and out of these, the following characteristics were common.

  • They had high performance work practices
  • They had a learning culture
  • They had a transformative capability, the ability to turn knowledge into action
  • The self-efficacy of a leader is important

From these characteristics we have developed the Five Key Components for leading successfully in the innovation age.

Five Key Components to Successfully Lead in the Innovation Age.

  1. Staying relevant

The highway of business is littered with the wrecks of businesses that have failed to stay relevant, think of Kodak, Nokia and recently Masters. We are seeing it with traditional advertising, print, radio and TV, we are seeing it where the “sharing” economy disrupts traditional business models. We are clearly seeing it in the digital space where digital businesses are making it easier than ever for customers to transact business with them. Stay relevant or die is the key message here, and to stay relevant is to stay abreast of changes around the world.

At Facebook, they have teams of workers who are charged with finding innovative ways to disrupt Facebook. By doing this they effectively keep abreast of potential challenges and foreseeing much of the change that will likely impact them. There is no thing as resting on the laurels of the business they have built.

Contrary to what we saw with Nokia and Kodak. Nokia was an absolute market leader who was swamped by the rate of change with the smartphone led by Apple and Samsung.  Kodak invented the technology that ultimately killed them, and suppressed it to maintain their film market in which they were the dominant leader. Whether it was arrogance or simply dumb, when others developed the digital camera, it was simply a matter of time for Kodak to become a shell of what it was.

Don’t allow your current business success believe you are immune. Continually monitor even minute changes in the market and the industry, and keep asking yourself, how to you maintain relevance.

A key manner to maintain relevance is to ensure that your business has the benefit of a fresh set of eyes and ears working with you. Whether that is in having a trusted advisor, or creating an inner circle through joining a business mastermind or mentoring group, the ability for you to create insight from others outside of your business is imperative in your quest to stay relevant.

  1. Create a learning environment.

“It comes from the chair.” One of my favourite sayings on leadership culture. It comes from the chair, means that culture of any business is most driven and affected by the one who leads that business.

If you want to create a learning environment the leader must be the role model of a learner. This can be done simply.  A leader who has their own growth plan; a leader that reads and has a library of material that is shared; a leader who schedules time with their team to focus on their growth; goes a long way to creating a learning environment. When the leader learns, and grows, the remainder of the team learn and grow.

A learning environment is driven by intentional action and a plan. It starts with the owner or the manager and if encouraged, becomes enjoyable and builds the foundation of growth for your team.

Other methods of growth come from “lunch and learns” and in-house roundtable or mastermind programs. Create a library of books that have impacted and influenced you and develop a personal growth plan for your team.

A learning culture requires commitment, consistency and clarity. Prioritise making yourself better and that will lead on to making your team better.

  1. Build accountability into transformation.

An avenue is needed to take knowledge and turn it into action and ultimately into benefit for your business. It is one thing to learn, the other thing is to do something with it. Transformative leaders define current reality, but can also envision a better way. They have a way to align their people to their clear vision and motivate the team to achieve results. So how do they do this?

Transformative leaders set aside time for real world brainstorming. Real world brainstorming takes the core values and products within a business and take incremental steps to improve it. They also find time for blue sky thinking to aid radical innovation, but they are clear on taking actions and placing priorities on achieving real results from the sessions.

Meetings aren’t wasted time sessions; transformative leaders ensure that actions and outcomes come from meetings and that people are held accountable for what they have said they will do.

This is where the rubber hits the road, but it is also important to understand that failure forms part of our business learnings. Transformative leaders fail early, fail fast and take the learnings and build from that. When we try, and hold onto to the status quo, we lose the chance to grow with new thinking. Success by embracing future growth is never guaranteed but failing to act intentionally to move forward, almost certainly relegates us to the also rans.

Success leaves clue.  But your success will never be greatest by mirroring other successes.

  1. Create Performance Measures and a Performance Culture

It stands to reason that highly innovative companies have a high-performance culture. A performance culture is indicated by some clear behaviours.

  • They have clear Key Performance Indicators
  • They have goals and targets
  • Everyone on the team knows what success looks like.
  • Each team member knows the role they play in the success of the company.
  • People are recognised on their roles, their efforts and their results.

This may seem almost common place, but unfortunately it isn’t. The Study Of Australian Leadership highlighted that over 60% of workplaces involved either had no KPI’s visible or no accessible for everyone in the team, which asks the question.

How can the team hit the Key Performance Indicators if they don’t know what they are?

They found that in only 33.8% of workplace all employees were aware of the KPI and performance of the business. Ask yourself if this is replicated in your workplace? How much ownership of the KPI is exhibited by the whole team?

To lead effectively in the innovation age, it is imperative to create a high-performance culture by building an engaged and aligned team to the goals and performance needs of the business.

  1. Build Leadership Capability

Building capacity in the leaders of the business supports the ability of a business to innovate and build a stronger business. The self-efficacy of a leader is a key characteristic of highly-innovative companies.

Psychologist Albert Bandura has defined selfefficacy as one’s belief in one’s ability to succeed in specific situations or accomplish a task. One’s sense of selfefficacy can play a major role in how one approaches goals, tasks, and challenges.

The belief of the leader, in the leader is a key determinant of a business to be able to effectively. And belief comes with development and belief comes in being accountable from delivering improved outcomes.

Let’s take the time to differentiate now between a confident, well-equipped leader with one that is delusional.  You may encounter the delusional leader. The one that believes they are equipped for everything, a confidence not based on results or endevours. Delusional leaders are actually dangerous for your business, as they are not equipped to deliver innovation or performance success. They usually are not open and aware of their shortcoming and are not active in personal development. They believe they are equipped, but have no basis for that belief. They are delusional and dangerous.

Build leadership capability, by placing your leaders in situations outside of their comfort zone. Create stretching opportunities, encourage opportunities to learn from other leaders from other industries, complete a leadership assessment, regular attendance at leadership development programs, work on their strengths, create growth plans and drive a leadership development agenda. Allow the space for them to build confidence and develop their skills. It is an investment that will reap benefits for you and your business.

And of course, for it to be effective, you join them on that leadership journey.

Concluding Statement.

Our world is moving at a faster time than ever before in our history. Businesses and declining and industries are being disrupted by companies harnessing and driving technological change. Companies need to face up squarely into their business, face their own reality and lean in to drive change.

Do you and your leadership team have what it takes to successfully lead in the innovation age?

Endnotes:

Research Papers.

Australia. Industry Task Force on Leadership and Management Skills (1995) Enterprising nation: renewing Australia’s managers to meet the challenges of the Asia-Pacific century: executive summary, Australian Government
Publishing Service, Canberra

Management Matters in Australia: Just How Productive Are We? (November 2009) Commissioned for Australian Government, Department of Innovation, Industry, Science and Research, Prof Roy Green, University of Technology Sydney, Macquarie Graduate School of Management and the Society of Knowledge Economics.

Karpin Revisited, Leadership and Management Challenges in Australia, March 2011, Industry Skills Council,  Innovation and Business Skills Australia, Australian Government Department of Education, Employment and Workplace Relations.

“Study of Australian Leadership- Do Australian Leaders Have What it Takes?” 2016, Centre of Workplace Leadership, Melbourne University.

Tony Curl is the founder of Think and Grow Business and works to grow businesses by growing the leadership effectiveness of the leader, owner or manager. His programs provide the environment for leaders to grow and gain confidence to enable business growth and innovation. Leaders Round tables are available where leaders in different industries meet monthly on a personal leadership journey, and together they become trusted confidantes and accountability partners for each other. Contact him today for leadership programs to help you and your team grow and innovate in your business. www.thinkandgrowbusiness.com.au : Email tony@tagb.com.au : P: 1300 824 287

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