8 New Rules of Innovative Leadership

UPDATED: April 2, 2016
PUBLISHED: March 16, 2015

Historically, we’ve thought of leaders and innovators as belonging in two distinct categories. George Washington, Winston Churchill and Franklin Delano Roosevelt: Those are leaders. And legends such as Leonardo da Vinci, Thomas Edison and Albert Einstein go in the innovators group, right? Well, maybe.

But in today’s world, we can’t afford to separate the two, says Linda Hill, a professor of business administration and the faculty chair of the Leadership Initiative at Harvard Business School. “Building organizations that can innovate is the critical leadership task for the foreseeable future,” Hill says. Leaders today have to enable, encourage and recognize true innovation, which she defines as “the creation of something new and useful.” But how? That question is at the heart of what leadership means in this new century.

To answer it, we must reexamine many of our beliefs about what it means to be a “good” leader. Just as we imagine all innovators as genius tinkerers who gaze at the stars, we exalt leaders for being fearless, all-knowing parental figures with a penchant for rules and well-meaning discipline. But that conception is outdated, says Hill and her co-authors of Collective Genius: The Art and Practice of Leading Innovation

For more than 10 years, she and her team shadowed executives from many of today’s most innovative companies—Google, Pixar Animation Studios, eBay, Volkswagen, HCL Technologies, Pfizer, IBM and more—looking for the common keys that enabled each of those organizations to consistently innovate and excel in rapidly changing economies. What she found could drastically change your leadership style, and your business, for the better. Here are the new rules of innovative leadership:

Related: 7 Things Great Leaders Never Do Again

1. Give up your “grand plan.” 

We like to think of a leader as someone with a master scheme, a vision, who will hold our hands and pull us to the promised land of profits and work-life balance. “This conception of the leader’s role can work well when the solution to a problem is known and straightforward,” Hill and her co-authors write, “but it’s counterproductive when it’s not. If a problem calls for a truly original response, no one can know in advance what that response should be. Instead of determining the direction your group should go, hand your teams the compass.” Your job as an innovative leader, to use another metaphor, is to “set the stage, not perform on it,” Hill says. How do you do that? Keep reading.

2. Admit that you don’t have all the answers. 

Giving up your identity as the visionary savior also means admitting to yourself and your employees/team members that you are not all-knowing. In fact, it’s better not to be the ultimate repository of information regarding your business. If other team members don’t feel they have ownership of some part of the organization, they’ll never be inspired to contribute. And you can’t have innovation without contributions from all corners of your company.

Vineet Nayar, former CEO of HCL Technologies, an IT services provider based in India, where most companies are extremely executive-centered, knew he had to coax his employees out of their cultural bias toward deference. On the HCL employee website, Nayar created a “My Problems” section where he talked about strategic issues and invited all employees to help him find solutions. “I got incredible answers,” he told Hill. “Everybody was willing to help their poor, benighted CEO!” He asked one team to assist in finding other ways to engage the whole company, and they came up with an “Employees First” initiative to emphasize that it was management’s job to support the employees, who had the most contact with clients, rather than the other way around. Nayar credits that initiative in helping HCL become a multibillion-dollar business during his 2007–2013 tenure.

Hill and her team found a similar example at Pixar Animation Studios, where they talked to Andrew Stanton, director of the film Finding Nemo. He learned the “you don’t need to know everything” lesson from John Lasseter, director of Toy Story, another award-winning Pixar movie: “Every time he [Lasseter] got confessional and said, ‘Guys, I think I’m just spinning my wheels,’ we’d rise up and solve the problem for him.”

You might think that your job is to instill faith in your employees, but innovative leaders do that by encouraging active contributors, not blind followers.

3. Be a storyteller. 

“When a leader tells stories, it shows vulnerability,” Hill says. Craft your past failures and successes into narratives, she suggests, not only to hold people’s attention, but to show your employees that “it’s OK not to be perfect, to make mistakes.” Instead of reciting sales figures from a past deal to your team, for example, tell them how you and the client didn’t get along at first. Showing that you are “human but resilient” is a potent message, Hill says, and creates a culture in which people feel comfortable sharing because they know that failure is a part of the process.

Related: 10 Ways to Be a Leader-Even When You Aren’t in Charge

4. Encourage collaboration. 

Innovation doesn’t happen in a vacuum. Just as you are not—and shouldn’t be—a singular visionary, neither should anyone else, or even one team or department. When working on a film, Pixar holds daily meetings (called “dailies,” naturally) where all the teams involved—animators, producers marketers, writers, techies and accountants—meet to review the work in progress. Lots of companies have daily check-in meetings, Hill notes, but very few include everyone as Pixar does. “Most great, big ideas are combinations of multiple smaller ideas. And you won’t get the chance to integrate ideas and expand people’s thinking if you don’t collaborate.”

When Luca de Meo joined the marketing team at Volkswagen in 2009 (he would become chief marketing officer a year later), he invited more than 70 VW marketers from cities all over Europe to a two-day Berlin design lab he called Marketing Worx! The goal was lofty: Create a global brand identity. What many leaders may have considered a “too many cooks” situation, De Meo felt was an opportunity to collaborate deeply, see where the brand really stood, and get everyone on board creatively. “Unlike in the normal daily life of the organization, everyone was being invited (or even pushed) to be a co-designer of solutions, not just an implementer of others’ ideas,” he wrote of the event.

5. Allow for conflict. 

When you bring people from different backgrounds—creative and sales, say—disagreement is natural. Instead of calling it “conflict,” however, Hill labels this disagreement “creative abrasion” and says it’s necessary for innovation. “You can’t think of something new unless you are being pushed to think in new directions, and you can’t do that unless you’re engaging with people who have different viewpoints.” Most organizations snuff out any flame of tension or conflict, but it is the innovative leader’s job to stoke the fires just enough to spark ideas without getting anyone burned. How?

➜ Show appreciation when people offer ideas and opinions, even if you don’t accept or agree with them.

➜ Share stories from your career of how disagreements led to success.

➜ Ask, “How can we combine these two opposing ideas?” “What can we take from each idea to create a new idea?” Hill suggests shifting from either-or thinking to both-and thinking.

➜ Resist what Hill calls “unnecessary structure and systems”—for example, having to go through gatekeepers who may or may not pass your idea along—which prohibit everyone from participating in the process and allow teams to dismiss each other more easily.

6. Don’t “lock down” a path until you absolutely must. 

The ideas so far are admittedly inefficient, and efficiency is one of the first sacrifices you make if you’re striving to create something new and useful. Innovation comes only from lots of trial and error—and those errors can be costly, in time and money.

But the payoff can be phenomenal, Hill says. So while it’s commonly expected that leaders be decisive—we present a boss with several ideas, for example, and count on her to choose one “winning” concept—innovative leaders let multiple ideas play out simultaneously. An animator on the Pixar movie Toy Story 2 gave a character a slightly arched eyebrow in one scene that the director, upon review during the dailies, felt was too sly for the innocent, straightforward fellow. So the animator drew the eyebrow to be less mischievous. But weeks later the director, Lasseter, returned to the animator and told him how that half-second of raised eyebrow had made him rethink the character and, in fact, the whole story. Not only was the subtle ironic gesture restored, but other scenes in various stages of production were revised in consideration of this character  twist.

“If the story had been fixed and immutable, if the director hadn’t been able to hold opposing views of the character in his mind until they could merge, none of that could have happened, and the story would have been worse for it,” Hill and her co-authors note.

Related: Do These 6 Things to Be a Successful Leader

The production of Toy Story 2 was a long, arduous process for Pixar, says Hill, in part because Lasseter allowed changes to the story until the very end. But the director defended his often frustrating method: “We need to focus on quality, and that only happens by iterating. If we lock in the story, we will be disappointed…. I know it would save us pain, but Hollywood is littered with films that refused to change.” Toy Story 2 was critically acclaimed and earned more than $500 million in worldwide box office sales.

When Bill Coughran joined Google as senior vice president of engineering in 2003 (he left in 2011), he was tasked with developing a comprehensive data storage system. Two big ideas emerged as possible solutions: One group wanted to build a whole new system from scratch, and the other wanted to build storage layers on top of their current system.

“No one in the organization… could know for sure which system would be best in the future,” Coughran told the Collective Genius authors. “I did not want to be top-down about this.” So he let both teams build their prototypes—for two years—to the point where both could be rigorously tested. The result: Neither solution was perfect, but the “layering” approach would suffice for the short term, and the build-from-scratch team would continue its work on the next-generation system, which would help Google become one of the world’s most valuable brands.

7. Experiment locally. 

If you’re already part of a national or global brand, you know that maintaining cohesive practices and messaging across different markets leaves little energy for creating new initiatives. It’s easy for far-flung employees to defer to headquarters’ standards, and it’s easy for HQ folk to insist they follow them. But that means you lose the creativity, local knowledge and innovation that the smaller outposts can contribute, Hill says.

When eBay acquired the German auction website Alando in 1999, that site was moved from the local servers to the parent company’s global platform. But Alando had been known in Germany for creating quirky, successful promotions and for quick responsiveness to local trends. Now all site changes had to go through corporate, a process that could take months.

Philipp Justus, eBay Germany’s new leader, considered Alando’s promotions and frequent user-experience changes too valuable to let go, so he made the risky move to switch back to local servers for some of their “micro-projects,” as he called them. He defended his choice with data and passion.

The micro-projects were so successful that eBay’s corporate leaders encouraged other international sites to adopt them. Not only that, eBay’s leaders recognized the power that local sites had to try out and test new ideas. Instead of changes coming from top-down, they started at the bottom and grew upward.

Even if you don’t have offices all over the world, encourage different teams or team members to devise and test new ideas on a smaller scale.

8. Believe in everyone’s genius. 

“If you don’t believe everyone has a slice of genius, it’s not going to work,” Hill tells SUCCESS. “The role of a leader is to get the best out of everyone.” While she admits that “not everyone’s slice is the same size,” she says innovation happens when everyone contributes. And no team members will contribute if they feel that their ideas aren’t taken seriously.

She was particularly impressed when, at a Pixar meeting, one animator acted out a scene, comically prancing around the room to show how he thought it should go. He altered his performance as others shouted feedback, as if it were an improv show. In the end, the group rejected his version of the scene, but the whole room gave him a round of applause, and he grinned as he sat down.

“That was a perfect example of valuing the contributor even if you don’t always accept their contribution,” Hill says. “Reward people for taking the risk of sharing,” she recommends, or you risk missing out on a truly innovative idea.

Related: 12 Things Even the Best Leaders Can Forget