Surviving and thriving in times of disruption: How can top managers develop core innovation leadership competencies?
If we are to succeed in strengthening our national innovation rate, we must increase Norwegian leaders’ will and courage to lead innovation processes in the context of challenging changes. But which innovation leadership competencies do they need to develop?
Today’s disruptive forces and external shocks cause an increasing need for leadership of innovative activities. The pandemic has made it even clearer how important innovation is to make organisations capable of surviving. Yet, Norwegian established firms innovate at a slower pace than firms in other comparable countries, especially when it comes to radical innovation.
If we are to succeed in strengthening our national innovation rate, we must increase Norwegian leaders’ will and courage to lead innovation processes in the context of challenging changes. Research shows that leadership is crucial in succeeding with innovation and that one of the most important drivers to increasing innovation capacity lies in developing innovation leadership competencies at the strategic top management level in established firms. The top management level is vital in ensuring that creative ideas are discovered and given the necessary resources in order to develop into innovative solutions.
We have conducted a literature review within the related fields of “innovation management” and “management innovation” to investigate which competencies top leaders working with innovation need to develop to take on an innovation leadership role. Based on this we develop a model with three main domains and associated competencies for developing innovation leadership competencies, including 1) organizational 2) interpersonal, and 3) dynamic competencies.
Organizational domain competencies
Innovation will not take place without certain competencies within the organizational domain in place, including strategy, structure, culture, processes, and people.
- Strategy: Choice of innovation strategy relates to the leaders’ level of ambition for the organisation. Leaders must challenge and change existing core business, purpose, and activities, which requires courage, and cooperation with innovative research & technology development actors. Leaders are also required to have the access and will to invest more capital and undertake a larger financial risk. Not the least, it requires leaders to engage in the formulation of an innovation strategy, which most established firms surprisingly seem to lack.
- Structure: How a business is organised to achieve innovation is a crucial factor. Future innovative leaders must be familiar with structural ways to enable innovation, such as ambidexterity, agility, and networks, with a particular understanding of how and when each of these structures is the most suitable.
- Culture: Organisations who wish to succeed with innovation must develop a strategically relevant culture. Research points to innovation culture as being more ad hoc and adapted to the dynamics of its environment. In addition, an innovation culture appears to require a high degree of psychological safety.
- Process: Leaders must be familiar with various methods and tools that can contribute to creative processes and innovative solutions. This includes both customer-centric methods such as Design Thinking and Google Design Sprint, and agile methods such as Scrum, Kanban, and Lean. All of these methods utilise iterative, rapid processes, often with teams with a high degree of autonomy and independence of the organisation’s management. Leaders should also be familiar with other methods suitable for business-model innovation.
- People: Future leaders must be familiar with, and develop, competencies related to interpersonal skills to be able to select leaders and put together an innovation team, develop the team and change its composition over time. Additionally, leaders should follow up on how the team cooperates and their results related to innovation.
Relational domain competencies
Certain competencies within the relational domain appear to be necessary for innovation to take place. These include agile exploration, negotiating skills, paradoxical mindset, and tolerance for emotional ambivalence.
- Agile exploration: Discovering creative ideas requires strategic sensitivity, or “the mindset of an entrepreneur”, in order to seek, see and seize these ideas. This can be described as an enhanced perception or increased attention within the team of leaders as a collective related to seeing opportunities, as a repeated activity to ensure ideas are being noticed and exploited.
- Negotiation skills: Negotiations are a necessity to gain traction and influence within the organization. The more radical the innovation, the more influential and negotiating power is required.
- Paradoxical mindset: Innovation may challenge current core activities which can lead to competition between different perspectives, roles, status and positions, areas of expertise, departments, and organisations which can create paradoxical tensions. Being aware of and able to transcend such paradoxes and tensions is important.
- Tolerance for emotional ambivalence: Handling emotions related to radical change and innovation appears to be especially relevant. This includes having tolerance for emotional ambivalence, as well as showing emotional maturity, as this contributes to making better assessments on an organisational level in radical innovation processes.
Dynamic domain competencies
In addition, a number of competencies within the dynamic domain seem to be required to innovate over time. Such resource competencies include heterarchical leadership, capacity-building and risk-taking network.
- Heterarchical leadership: Managing innovation requires different leaders at different times in different forms and on different levels. Such a dynamic picture is referred to as a heterarchical form of self-management in teams and emerging structures. This form of leadership requires leaders to develop competencies around understanding who should lead when, how, and why as well as how to transfer leadership over time without creating conflict and tension that jeopardizes performance.
- Capacity-building: Innovating as a “one-off opportunity” is of course an option. However, this leaves the organisation with a potential non-mobilised and non-appropriated competitive advantage related to the “how-to” of innovation. By using past experiences of innovation this capacity can become a dynamic resource that may be repeated in different forms, but also expanded in new ways.
- Risk-taking network: Leaders who succeed with innovation often have access to a network of innovation leaders with a willingness to take risk, as well as access to social capital as well as monetary capital intended for radical innovation.
Based on this review we propose that innovation leaders in established firms in Norway need to develop these competencies in order to succeed with more radical innovation.
While there is a need for more empirical research, the three domains and associated competencies we identify are a starting point to begin to understand which innovation leadership competencies to develop at the top management level.
Developing these competencies may prove necessary to ensure the survival of established firms in a time characterised by disruptive change.
This blog post is based upon a forthcoming article which will be published in Magma in 2022.
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