Companies exist in constant changing environment and technology is disruptively forcing the shift towards continuous innovation. In order to achieve sustainability, it is said that innovation is the key and its realisation is highly depending on effective leadership. Many CEOs understand the importance of innovation but how many really practice and cultivate the innovative culture within their workforce?
As we commonly understand, innovation is associated with continuous process, value creation, new idea, improvement, and creativity. Some characterise innovation as a process with transformative quality, specific to situation and time that is capable to replace or reverse existing unfavourable situation. It is also proven that innovation can be replaced over time with another innovation. There are just too many definitions on the huge word “INNOVATION” and this creates confusion and misunderstanding.
I define innovation as the …
“Process of creating new value through developing products, services or processes, in order to fulfil the need of a significant population”.
Anything that is labelled as innovation but without a significant number of people demanding for it can only be considered as something creative, which might not translate into value.
The global scenario is placing innovation as the key to gain competitive growth. If we speak about large economy like China, we look at how Alibaba creates its success by having an unconventional profit model. Rather than charging its customers for admission when eBay China charges a fee for platform transaction, Alibaba charges for services in marketing and technical support that are perceived to create higher value for every dollar spent by its customers. This contributes to a large and robust market share made up of loyal customers.
For large economy like US, Microsoft was formed in 1975, went public in 1986 and is considered one of the most profitable company on earth. It first introduced MS-DOS in 1981, sold at lower prices with the hope to get adopted by major computers. But MS-DOS was alien and unattractive to a lot of consumers not only due to the boring mono colour screen but also the hassle for users to remember various commands. To make things simpler, Microsoft introduced its first graphical user interface, Windows 1.0 in 1985. Windows was a great success and since then Microsoft never stop making incremental innovation to improve Windows including continuously innovate new products. This validates the claim that innovation is continuous and also a never ending process.
The success of Facebook, Google, Samsung and Apple too follow the model of continuous innovation and I believe it all boiled down to the level of innovativeness of its workforce. Why are these companies so successful? What makes them able to recruit, build and retain workforce that are highly innovative? Or are they merely lucky? If you observe these companies, they do have certain traits in common.
One common culture of such highly innovative company is the availability of growth mindset within its workforce. Company with such culture tends to have inclination towards achieving performance excellence. They do not only place importance on increasing profitability but also focus on developing learning culture through knowledge sharing. On top of promoting acquisition of new knowledge, these organisations provide real financial and infrastructure support to its workforce. For example, highly innovative companies invest in strategically designed office spaces, allowing time for employees to interact with each other in order to encourage knowledge sharing. These companies understand that informal communication and knowledge sharing with strategic visual support can spark innovation. By creating a conducive environment coupled with action-oriented support from companies, employees are motivated and will most probably reciprocate by delivering high quality work.
We all know that CEO plays important role to shape the innovative culture of the company they manage. They are directly in the spotlight, and people look at them to understand what an organisation is all about and what it sanctions. However a CEO who is innovative does not necessarily has the ability to lead innovation.
One powerful enabler to successfully lead innovation is to have in place a transformational CEO. They possess growth mindset; practice integrity and fairness; set clear goals and aim high; and consistently provide support, recognition and care for their employees. This type of CEOs are consistent with their decisions and constantly stimulate followers to view problems in new ways, helping them develop their full potential. They encourage, motivate and inspire employees and get people to look beyond self-interest. When coupled with integrity, fairness and empowerment, such CEO can garner trusts from its employees leading to achieving collaborative and committed action.
Most transformational CEOs have the ability to create positive emotion at workplace and this encourages innovative work behaviour. Is your CEO a transformational leader who practices empowerment; who are consistent with decisions made; who lead with integrity and fairness; and someone who constantly provides support to your continuous learning? If a CEO suppresses an employee’s opportunity or diminishes its need, it shows that he/she doesn’t truly want to exercise real empowerment despite claiming it. In such case, he might not be the right person who knows the way to lead innovation.
In Malaysia, most companies treat innovation as a project. In order to develop breakthrough and competitive offerings, they setup project teams to invest in R&D that are commonly criticised for failing to produce successful results. The focus should not only to treat innovation as a project, rather CEO should focuses to create an environment that is conducive for its workforce to cultivate innovative work behaviour.
Well, I am not saying that setting up project teams to innovate new offerings is wrong. But what I am trying to say is that innovation at workplace should be holistically practiced, as a daily routine, as something like the need to “EAT everyday”. By having innovative workforce, innovation projects can potentially accelerate and be completed successfully with the least resources.
Again, many companies understand the importance of innovation but how many CEOs are willing to go against the cultural norm and start creating such innovation-enabled environment that seems to sacrifice working time in exchange for something that is not tangible like “an innovative mindset”? Are CEOs willing to sacrifice few working hours on a daily basis allowing their employees the opportunity to cultivate innovative work behaviour? Are CEOs willing to put aside the strictly enforced 9 to 5 culture, start providing flexibility and start trusting their employees? Many CEOs have fear of losing control and therefore not willing to allow such flexibility. It has been a norm for CEO to enforce the 9 to 5 culture but in actual fact, is it still relevant to measure employees’ effectiveness based on man hour?
One hindrance towards creating innovative culture is the fear of CEO in losing control and making them gradually be replaced. This type of CEOs are mostly unwilling to learn and therefore to protect themselves, will discourage their employees from gaining knowledge. Some goes to the extent of depriving highly competent employees the opportunities to network in order to avoid comparison. When a CEO is not willing to embrace his/her own vulnerability, insufficiencies and mistakes made, encouraging the creation of innovative workforce seems impossible at all. A leader who is autocratic, demand submissiveness, inconsistent with decision making, purposely create authority gap between employee and management is definitely not competent to lead innovation.
I am not able to have a definite answer as to whether Malaysian CEOs can lead innovation. But personally, I question the depth of thoughts Malaysian CEOs placed to differentiate between innovation and leading innovation. One thing for sure is a CEO who can innovate does not equate him the competency to lead innovation.
I hope with the forming of new government, focus can be made to equip local CEOs the knowledge and competency to lead innovation, creating a workforce that is innovative, and one that can produce highly competitive offerings. With this focus, Malaysia can definitely transform itself to become an innovative nation leading to the creation of sustainable economic growth.