In an era of disruptive change, managers who rely on old playbooks risk rapid obsolescence. The need for quick responses to hard-to-predict events calls for agility and creativity – in short, for innovative leaders.
But what exactly makes for an innovative leader? Leadership is a multi-dimensional endeavor. It’s not just about crafting bold strategy, inspiring innovation, or thinking fast. Take two historical examples.
In the 1910s, Henry Ford ruled the auto industry. Yet by the end of the 1920s, Alfred P Sloan had knocked him off his perch without having the manufacturing scale, low costs, or wide distribution that Ford enjoyed. Sloan’s underdog company was an amalgamation of marginal brands, yet this firm – General Motors – pulled off the feat without any major technological revolution. Instead, Sloan understood the market well and pushed his company to innovate in new directions: the auto trade-in, auto financing, and the modern organization of a firm into staff and line functions are all innovations credited to General Motors. Together, these creative moves proved critical to challenging Ford’s dominance.
More recently, Steve Jobs at Apple built a defensible niche in personal computing, then upended two market leaders – Blackberry and Nokia – to re-make the smartphone industry. He wasn’t a technologist, but he set a clear, bold strategy and crafted a well-defined product vision. To deliver it, he recruited and enabled a highly talented team, pushing hard for excellence. He wasn’t beyond admitting failure, as with the Apple III, the early GUI entry called the Lisa, and the Apple Newton handheld computer. But he quickly pushed on to new frontiers.
How To Create Innovative Leaders
To understand how today’s innovative leaders think and behave, I teamed up with my co-authors Jennifer Luo Law and Hari Nair, currently at Philips and Procter & Gamble respectively, to interview 50 of them. We selected them based on the clear results they have achieved, and the innovative ways that they accomplished those results – and we made sure to cover a mix of industries, enterprise size, job functions, and geographies.
The findings are published in our book, The Innovative Leader: Step-By-Step Lessons from Top Innovators For You and Your Organization. What emerged from the interviews was a picture of six vectors along which innovative leaders excel. Together, the names of these vectors spell out a fitting acronym: CREATE.
These are the six traits that emerged from our research.
As a pre-condition for being an innovative leader, our interviewees stressed the importance of being connected to the people they serve, whether the company’s customers or employees. To be effective, leadership has to move the company in the right direction, and connection provides the basis for knowing which way to go.
Leaders look to understand the market firsthand. One of our interviewees, Microsoft CEO Satya Nadella, puts it elegantly and succinctly when he identifies the source of all innovation as “the most humane quality that we all have, which is empathy.”
Of course, customer research can become an echo chamber for how the company already thinks. Kimberly Weiss, who leads the mortgage business at First National Bank of Omaha, recounted to us how she re-thought the ways her large institution gathers customer input. “We used to have a 40-question survey about all aspects of customer satisfaction during the mortgage process, like ‘How much did you like your loan processor?’ Well, what if they never really cared about their loan processor? We threw that out, and replaced it with a single question: ‘From 1 to 5, did we create an exceptional mortgage experience for you?’ If you answer 5, we ask why you answered that way. If you don’t, we ask why not. We want to know, in their words, what truly matters.”
Understanding the workforce also makes a big difference. When Joey Bergstein became the chief executive of Sabra Dipping Company, one of his early moves was to work the night shift in a hummus plant. Beyond reading the PowerPoints, he wanted to know firsthand why workers were leaving and how to ensure reliable operations. He told us, “You can ask people what’s going on, but you’ll get neutral answers. When you see it with your own two eyes, it heightens the sense of urgency and deepens your understanding for what is really happening.”
Role Model
A leader sets a tone for their organization, whether it’s a small team or the whole enterprise. People take their cues about how to act from those who lead them. Do the leaders observe and question before deciding on a solution? Do they push to consider several alternative courses of action? Do they think several steps ahead about opportunities and risks?
Jan Swartz knows about role modeling. As chief executive of Princess Cruises during the pandemic, she saw three of her 20 ships struck by outbreaks of Covid-19. Authorities wouldn’t allow them to dock, for fear of bringing the disease into their countries. Passengers and crew were fearful, and people on the ships were dying. Observers wondered if the cruise industry would have any future. It was incredibly, unrelentingly, bleak.
What did Swartz do? She left the company’s headquarters near Los Angeles to fly straight to the pandemic’s early epicenter in Asia. She wanted to demonstrate that a core Princess value is caring for people. While the company could do only so much to manage the outbreak, she conveyed through her own actions that both passengers and crew should always feel cared for.
Partly through role modeling, Swartz built a set of shared values. She recounted: “Everyone had to make decisions on the fly. But they all knew what our True North was, because we had articulated our core values incessantly. In the fog of war, people had the discretion to make decisions that they felt were based in those core values.”
Evolving
When Nadella took the reins at Microsoft, he rapidly pivoted the company to focus on cloud offerings. This paid off: within five years the company’s stock price had appreciated more than four-fold (having barely moved during the 14-year tenure of Nadella’s predecessor Steve Ballmer). The company seemed to be firing on all cylinders.
But Nadella knew that computing wouldn’t stand still, and in the midst of all the success he kept pushing for what’s next. In 2019, he tinkered on his own with emerging Generative AI models, and was astounded by their capabilities. Microsoft invested $1 billion in a tiny, 100-person start-up, called OpenAI. The move certainly worked out: Microsoft’s share price has nearly tripled again since that time.
Audacious
Innovative strategies may be executed in stages, but they’re seldom timid. Sometimes they require highly decisive action.
Ron Shaich has demonstrated this a few times. As the founder of the restaurant chain Au Bon Pain in 1978, he was a pioneer of what’s called fast casual dining. He grew the chain to hundreds of stores across the United States. But, like Nadella, he kept looking around corners too. Shaich had Au Bon Pain pay $23 million to buy a separate business with just 20 stores, the St. Louis Bread Company. As he looked deeply into his new firm’s economics, he made an audacious move. Au Bon Pain spun off its main business into a separate company, and Shaich doubled down on the St. Louis Bread Company. Later on, he sold that business – re-christened as Panera – for over $7 billion.
Three-Sixty Thinker
Creative strategy came up time and again in our interviews. It is a cornerstone of innovative leaders’ plans. Alfred P Sloan and Steve Jobs were each renowned for the strategies they shepherded. They looked well beyond the core product they sold to innovate in areas such as ecosystem partners, internal processes and customer experience.
These opportunities exist in even long-standing industries. The agribusiness giant Ofi (Olam Food Ingredients) has over $10 billion in annual revenue. Although food trading and processing is a low-growth industry, Ofi has expanded rapidly through consistently seeking what’s next. Its president Kamesh Ellajosyula told us, “I have been relentless and consistent with my message for change. No matter how many knocks I take, I will keep coming back, coming back, coming back. In this role, you have to be prepared for the long road.”
Coffee is one business line in which Ofi thought three-sixty. It examined the billions of pounds of coffee cherry flesh that it was throwing away every year. It turns out to be a superfruit rich in antioxidants – so now, Ofi is developing a new market for this one-time agricultural waste.
Enabler
Innovative leaders know that their success can’t depend just on them. Even executives famed for being autocratic, such as Steve Jobs, assemble a first-class cadre of lieutenants around them. They see innovation as a team sport.
Effective leaders find ways to inspire innovation throughout their organizations. As Laura Caron, the head of an innovative elementary school in Massachusetts, recounted to us: “Yesses beget yesses, which beget more good ideas. If I could give advice to my younger self, I would have been bolder to say more yesses to signal innovation faster.”
This also means finding appropriate innovation inspirations for people throughout the organization. “You want to be shown real examples of ‘people like you’ who are able to be an innovator,” Michelle Brennan, Johnson & Johnson’s company group chairman for Europe, Middle East, and Africa, advised us. “Highlight people who have had realistic wins, not just miracle wins.”
Getting Started With Create
Each of these traits takes time to cultivate, both within a single leader as well as throughout an enterprise. But the leaders we spoke with commonly talked about three endeavors for building innovation excellence.
First, they sought to set clear innovation aspirations. What strategy was their company following? Innovation is a means to an end, so what is the end? What sorts of innovations are desired? Laying out the direction for their firms enabled both coherent action and reduced frustration with innovation efforts that might get nixed for being off-target.
Second, they built mechanisms for good ideas to go somewhere. They wanted to avoid people becoming disillusioned by having their ideas linger without implementation. Even small wins could establish momentum for bigger triumphs later on.
Last, they cultivated behaviors for long-term success. Through building capabilities, recognizing innovation efforts, and connecting people across organizational silos, they helped to ensure that people could take ideas and run with them, making big ideas even bigger.
Create is a foundation for innovative leaders, and links to broader efforts to enable organizations as a whole. By adopting Create as their personal approach, leaders ensure on-target, effective, ambitious innovation. That’s what fast-moving times require.
Contributed to Branding Strategy Insider by Stephen Wunker, Managing Director of New Markets Advisors and Author of The Innovative Leader.
At The Blake Project, we help clients worldwide, in all stages of development, define or redefine and articulate what makes them competitive at critical moments of change, including defining a vision that propels their businesses and brands forward. Please email us to learn how we can help you compete differently.
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