10 Things Effective Leaders Do to Encourage Innovation

UPDATED: April 2, 2022
PUBLISHED: November 13, 2021
10 Things Effective Leaders Do to Encourage Innovation

When I work with companies on innovation projects, whether it’s industry-changing new products and services or smaller-scale ideas to streamline internal processes, I often see leaders and their teams struggling to freely ideate and really dive into the brainstorm process. When they do finally get there, it’s a big aha moment, but it takes a while.

The reason is simple: When ideation isn’t second nature, it’s because company culture hasn’t supported it. This is understandable. In today’s fast-paced marketplace, there is hardly time for breath, let alone innovative thought and brainstorm sessions around the future of the industry, company or department. Most companies are still surviving on the original idea that inspired their startup, and employees are spending most of their time dealing with the day’s deadlines and putting out fires. In most organizations, there simply isn’t any time or value put aside for freedom of thought and finding better ways to do things.

Many of the companies I work with have spent so long working on the day-to-day operations that futuristic thinking can be a foreign concept. It’s the old adage of spending so much time working in the business that there isn’t any time for working on the business.

We all know that companies need new ideas in order to innovate and stay ahead of the competition. All you have to do is look at organizations like Intuit, Amazon, Netflix, Airbnb and myriad more. These are companies that are always looking ahead to the next trend, following customer direction and bravely disrupting the status quo, even if the status quo is the basis for their company.

Each of these organizations excels at innovation because they have created cultures that celebrate ideation in general. It’s not just six guys in a room cranking out all the ideas. Instead, innovative thought permeates all departments and employee levels.

Here are the 10 things that effective leaders at innovative companies do to encourage ideation. And they are all things that any leader can replicate.

1. Make space.

Leaders who value progress give employees the space, time and opportunity to dream and ideate. They carve out sacred time that is not trampled by other initiatives and deadlines. This can be a regular brown-bag lunch, a weekly brainstorm session where out-of-the-box concepts are explored, or scheduled personal time to think and imagine solutions to everyday problems.

2. Compensate ideas and problem finding.

They create a reward system, whether it be financial or verbal, for identifying problems and opportunities, and generating ideas to tackle them. Ideas are the currency of innovation, and growth cannot happen without them. These leaders know that their teams can be a never-ending font of ideas if they are given the right incentives.

3. Get clear.

They clearly understand the problem or opportunity that requires ideation. They give their teams a well-defined goal and create a sense of urgency behind it. Putting pressure on teams is necessary for innovation. Otherwise, there is no reason for momentum or efficiency.

4. Be the solution.

Progressive leaders ask employees to be the solution. Note that I didn’t say to be part of the solution. They need to be the solution. When the assumption is that the manager is going to facilitate the solution, it no longer becomes the team’s responsibility to get it done. Innovative leaders immerse their teams in the problem so they can experience its impact and require the team to find a way out.

5. Test to learn.

They are continually measuring and testing new ideas. But here’s the difference: They assess ideas based on testing to learn and testing to succeed, versus testing to fail or testing to try. They use this series of testing and validation techniques for all ideas to ensure maximized return on ideation.

6. Ignore roles and titles.

Nothing kills innovation faster than relying on titles when determining which ideas to entertain. Just because an employee works in accounting doesn’t mean they might not have an invaluable idea related to marketing strategy or client outreach.

7. Focus on customers.

Leaders who want innovation are maniacal about understanding the customer—their sensitivities, preferences and desires. Innovative leaders understand that they have no company if they have no customers. They monitor customer interaction, sales and retention. They use this data to cultivate what the customer wants—or will want in the future.

8. Think to the future.

They are always looking at the future and imagining what their industry and company will look like one year, five years and 10 years from now. They use their contextual knowledge of their customers, market trends, studies and projection to imagine what customers will be doing in the future. And they teach futuristic thinking skills to their teams.

9. Cross-pollinate.

They encourage the co-creation of ideas and challenge their employees to look outside their teams, outside the company and outside the industry for ideas that have worked elsewhere. They urge team members to work through solutions together, outlining the what, the how and the when of their ideas. This allows their teams to develop ideas more completely, or to come up with ideas that they may not have discovered alone.

10. Reward success.

The reward for succeeding is higher than the cost of failure. Their team members are willing to try an idea because if the idea succeeds, the company does better. No one is labeled a failure if an idea doesn’t work or achieve different outcomes from what was expected. In fact, what is emphasized is a maximum return on learning, regardless of the outcomes. The cost of not trying is higher than the cost of learning in the long term.

Developing a culture of innovation is a powerful engagement tool for employees. It gives them skin in the game, and they feel increasingly valued, knowing that their opinions, ideas and input matter. Frequent outside-the-box ideation and problem-opportunity identification can reinvigorate the workplace, as teams start to invest in what the future might hold, creating innovation both small and large.

This article was published in December 2017 and has been updated. Photo by @Rushay/Twenty20

Evans Baiya

Dr. Evans Baiya is an innovation and technology consultant, speaker and author with Price Associates. He is the co-author of The Innovator’s Advantage: Revealing the Hidden Connection Between People and Process. He has held professional positions at a variety of companies, starting from a research chemist to global leadership positions in engineering management and strategic product development and marketing. His extensive global experience includes the development of technologies and strategies with companies such as Samsung, IBM, Intel, Nokia, Microsoft, Texas Instruments, World International Patent Office and others. As a successful author, Dr. Baiya has published more than 30 peer-reviewed publications and holds several technology patents. He is the host of the 90 Seconds of Innovationpodcast.