Why Do Leaders Find It So Challenging to Innovate Responsibly?
By Gaia Grant
Tuesday, 21st May 2024

Purpose-driven innovation is not a 'nice-to-have' option for contemporary companies, it's become an imperative.

An adapted excerpt from Gaia's new book on Purpose-Driven Innovation Leadership for Sustainable Development (Routledge, due for release 30 May 2024)

“In an increasingly polarized world," says Dev Patnaik an Adjunct Professor at Stanford University, "customers want the products, services, and experiences they’re buying to reflect their values. They’re not just buying things, they’re buying into things. Similarly, employees want to work at companies that share their core beliefs, and they’re getting more vocal and rebellious when that isn’t the case.”

Yet leaders continually report it is difficult to lead for responsible innovation.

So how do leaders experience the challenges involved? And how can they manage these challenges more effectively?

An insight into the challenges

I once worked with an organisation that had been set up to assist rural communities in impoverished regions in Asia through developing more innovative farming techniques.

The strategic goal was to shift to a financially self‑sustaining social enterprise model through partnering with local businesses. During the three years I worked with the enterprise, it was evident that despite the impressive business approach and dedicated team, there was an internal struggle to resolve the increasing tensions. As the organisation grew to over 140 employees, cracks began to show.

Observations of the executive meetings provided confirmation that a fear of the General Manager was impacting the culture at all levels. During these meetings, the General Manager often sat in a corner of the room with his arms crossed and he would shut down new ideas with comments like ‘We’ve done that before’, ‘There isn’t a budget for that,’ or ‘We don’t have time for that.'

This confirmed indications from a number of sources that while the General Manager had believed he was providing an open environment for innovation, a focus on metrics and results along with an abrupt management style was leading to tensions that stifled the opportunity to achieve the desired innovation results.

Is responsible innovation leadership really important?

We should be able to solve the world’s most challenging or wicked problems through skilfully applied imagination and innovation implementation.

Innovation is also deemed the most crucial factor influencing organisational performance. Senior executives view it as vital for economic performance, ranking innovation among their top three strategic priorities.

As senior leaders account for about 5–20% of variance in company financial performance and are recognised as the ‘core drivers of sustainable development’, it is critical to understand the nature and impact of these tensions at the leadership level.

So why do leaders often struggle to do this well?

What's stopping leaders from innovating responsibly?

We are not necessarily held back by developments in technology. Technology has already reached the point where we can utilise generative artificial intelligence, build semi-autonomous vehicles, fight disease through nanotechnology and experiment with creating new ecosystems on Mars.

The main obstacles are now typically the human factors. Some of these factors can include resistance to change, complex ethical considerations such as the role of AI and tensions between different strategic approaches.

At the core of these are tensions arising from competing pressures that are increasingly complex and difficult to navigate. These competing demands include the need to keep pace with change, which calls for agile adaptation for rapid innovation, while concurrently ensuring responsible and reliable performance.

In purpose-driven organisations the competing demands are even more complex, as there is also a need to focus on the core mission and purpose while also ensuring profit for sustainability.

What leaders can do to innovate more responsibly?

Although the number of research articles on innovation has increased from around 50 per year in 1981 to more than 340,000 per year in 2023, firm-level innovation processes remained the focus of more than 50% of these articles. The critical role of organisational leadership for innovation has now become a key area of interest.

While there is a growing recognition of the need for leaders to simultaneously pursue such contradictory goals for more sustainable development, how this can be effectively achieved is not yet well understood. Little is known about the dynamics of how leaders and leadership teams experience and respond to the tensions from complex competing innovation demands in for-purpose organisations.

Leaders support the types of group interaction that enable and guide innovative processes in their teams, and they are also able to create the conditions required for innovation implementation. These leaders use a number of managerial levers to directly and indirectly impact innovation

  1. Here is what leaders can do to ensure innovation is both purpose-driven and sustainable:
    develop strategic missions and goals that incorporate the competing purpose-driven innovation demands
  2. build a leadership team that embraces and encompasses the diverse perspectives, allowing for freedom of thought and expression while also driving progress in alignment with the vision and mission
  3. allocate and fairly distribute resources to meet the competing demands
  4. consider the development of organisational learning, management tools, and culture to support both innovation direction and maintenance.

Consider how your leadership approach can better leverage the tensions associated with the competing demands of responsible purpose-driven innovation.

Purpose Driven Innovation:

This new book by Dr Gaia Grant provides fresh research insights and practical guidance on how leadership teams can understand and deal with the unique competing demands of purpose-driven innovation leadership – such as needing to innovate for both purpose and profit, and innovating at speed while also ensuring the development of sustainable systems and structures.

Readers will benefit from considering the applications of the evidence-based principles and compelling case studies. The findings provide insights into the specific tensions leaders identify from competing ‘purpose-driven’ innovation demands.

"This book bridges the common gap between in-depth qualitative research and practical actionable insights and applications.”
Professor Eric Knight, Professor of Strategic Management at Macquarie Business School, Sydney

"An evidence-based informative and practical guide for anyone interested in exploring how to better lead for impact.”
Dr Marco Berti, Associate Professor of Management and Organizations, Nova School of Business & Economics, Lisbon

ORDER NOW (Published by Routledge / ISBN 9781032730219 / May 2024 /120 pages)

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