Updated: Jan 7, 2020
“If you're not failing every now and again, it's a sign you're not doing anything very innovative.” - Woody Allen
In late January, I published a post on LinkedIn called “Creating a Culture of Innovation” which featured the 6 most important steps I believe a leader needs to take in order to build a highly innovative culture. The step that elicited the greatest response and interest was to Lead by Example, so, I decided to write a separate post just on that one topic.
In addition, this past weekend I was fortunate to share my thoughts on innovation at Michael Campbell’s 2015 World Outlook Conference, in Vancouver, Canada. For the past 26 years, Michael and his team have brought together some of the world’s leading independent investment analysts to give his audience a fresh and valuable perspective on investing, it would not get from conventional sources. This concept of taking an outside perspective encouraged me further to expand on the idea of Leading by Example.
One of the biggest errors leader can make while building and leading an innovative company is underestimating the impact of his or her own actions on culture. Leadership is life under a magnifying glass. Every trait, nuance, skill, error, belief or genius idea is first exposed and then magnified, in its rawest form. This can be the making or undoing of great leaders, who are humbled by this notion. They strive hard to improve and build upon their strengths, or at least mitigate their weaknesses. Average leaders are eventually exposed and, if they are fortunate, are given an opportunity to develop, or rebound at another time, hopefully wiser. This is good and healthy, since most people, whether in an innovative culture or not, demand much of their leadership, and detect uncertainty and incompetence much better than leaders believe.
An insightful leader will start with a full, honest and comprehensive appraisal of themselves, through a process of reflection, analysis and objective 3rd party assessment. Not just once, but on a continuous basis, with the improvement reinforced with accountability partners. They will also embark on a process of lifelong learning and renewal, knowing that developing leadership skills requires tremendous effort and time dedication, with a constant reinforcement of better habits.
A leader striving to Lead by Example will make the distinction between a company where innovation is revolutionary or evolutionary, and then modify the approach accordingly. Revolutionary innovation requires transformative thinking, disruptive business models and nerves of steel. Evolutionary change requires exceptional management, timing and a high EQ to manage competing interests.
A good leader will recognize that any innovative company will need financial resources to see major projects through to fruition, and therefore, will maintain a long-term source of funding to maintain staying power. Strategies include full product pipelines with good margins, business unit portfolio management, and good access to capital.
Finally, leading an innovative company by example requires any leader to show humility and turn to the team of talented people, not out of weakness, but out of strength. This will encourage all employees to embrace a culture where it is okay to admit that they don’t have every answer to every question, and that the true innovations comes from closing that knowledge gap in a way that creates something bigger for the company, and better for the customer.