3 Requirements for Creating a Culture of Leadership & Innovation

Innovation begins with the heart… a heart of leadership

The Hay Group, a global management consulting firm, released their findings that identify which organizations have the best leadership practices and what we can learn from them.

According to Hay Group’s study, the Best Companies for Leadership create workplace environments and processes that enable innovation to thrive.

In fact, all of the Top 20 companies reported that their leaders regularly celebrate innovation, compared to just 49 percent of other companies.

But you knew that already right? The most fascinating discovery, though, is how this innovation is brought to light and attention and the management and flow of idea generation. You see, 90 percent of the Top 20 companies reported that if individuals have an excellent idea, they can bypass the chain of command without the threat of negative consequences, compared to only 63 percent of other companies.

Bypassing the “chain” of command without “negative” consequences is huge – does this cultural dynamic exist in your organization? Or do you face significant tension, roadblocks, or even discouragement when bringing attention to newer ideas?

‘The Best Companies for Leadership recognize innovation is key to their future growth and ability to survive in a fiercely competitive global market,’ said Rick Lash, director in Hay Group’s Leadership and Talent practice and co-leader of the Best Companies for Leadership Study.

‘Many companies prize innovation, but the Best Companies for Leadership approach it in a disciplined way by building agile organizations, promoting collaboration, celebrating successes, learning from setbacks and fostering a culture that encourages a passion for innovation throughout the organization.’

The Hay Group polled 7,000 people in more than 2,300 companies worldwide. Respondents rated their own companies and were asked to nominate three other companies they most admire for leadership.

Each of the companies shared four common leadership traits: the company enables organizational agility, broadens perspective, focus on collaboration, and leadership drives innovation.

Among some of the more interesting survey findings were: 100 % of the best companies let all employees behave like leaders. Only 54% of peers do likewise; 90% of best companies let employees bypass the chain of command with an excellent idea; problems are opportunities, 95% of best companies think this way; collaboration is mandatory.

100% of the best companies take action when a leader is not collaborating; 95% of senior leaders take time to actively develop others. Only 48% of leaders at peer companies do this; and 95% of best companies reward leaders based on their ability to build excellent peer relationships.

Other major findings from Hay Group’s Best Companies for Leadership Study include:

Companies are better positioned for talent now and in the future Top 20% All Others
Leaders create a work climate that motivates employees to do their best 100% 61%
My organization actively manages a pool of successors for mission-critical roles 100% 60%
There are a sufficient number of qualified internal candidates who are ready to assume open leadership positions 100% 44%
Organizations are structured for speed and agility Top 20% All Others
My company has an organizational structure that favors quick communications paths 85% 55%
Roles have been designed to allow for flexibility to respond to immediate projects 90% 65%
Leaders at the frontline have all the decision-making authority needed to respond to changing market conditions 75% 49%
Leaders set the context for smart innovation Top 20% All Others
My company runs unprofitable projects to try new things 94% 49%
Employees spend much time discussing customers’ future needs 90% 47%
Employees are encouraged to learn in areas outside of their expertise 90% 48%
Organizations seek and value broad perspectives Top 20% All Others
To solve problems, leaders gather points of view from multiple perspectives 100% 66%
My company has a balanced mix of local and international talent in senior leadership positions 95% 51%
My company recruits cultural minorities 85% 39%
Leaders encourage collaboration and reward it accordingly Top 20% All Others
My organization takes clear action when a leader is not collaborating 100% 59%
My company evaluates and rewards leaders based on their ability to build excellent relationships with their peers 95% 46%
Our incentive plans put significant weight on team-based measures 84% 56%

As a result there appears to be three consistent patterns that have been created that promote significant innovation and a culture that helps the organization thrive:

1. A place of Empowerment.

As the Hay Group survey reveals, the best companies are those that let employees behave like leaders. What a novel concept. When team members are empowered to behave as leaders they will not disappoint. Given the opportunity, empowered employees will work hard to meet and exceed expectations.

2. A place of Possibilities.

Within this culture of leadership and empowerment is a place of unlimited possibilities. While many companies choose to play it safe; consider this finding from the Hay Group survey – 94% of best companies are prepared to run unprofitable projects to try new things.

3. A place of Vision.

Winfred Newman said, “Vision is the world’s most desperate need. There are no hopeless situations, only people who think hopelessly.” He is right. The single greatest drawback to the advancement of your organization is a lack of vision. Until the vision is known, don’t expect a culture of leadership to thrive much less exist.

Your challenge, as a leader, is to make sure you create the right culture that will persist through the good times and bad, through the times of significant innovation and through the times where you don’t hear much new at all.

Make sure you have the right tools in place so that innovation and cultural growth can occur. We’d love to help.


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Peter Saddington

Peter Saddington is a 3x startup founder, angel investor, and Certified Scrum Trainer who has been in software development for 20+ years. He has three Masters degrees (Counseling, Education, and Religion) and the author of The Agile Pocket Guide (Wiley, 2012). Come learn from a proven enterprise coach and startup founder with experiences of moving a 12,000 person business unit to agile, building his own startups, going through venture funding, and even acquisition. Peter's courses are 100% experience and workshop based with less than 30 slides in a 2-3 day training course. In Peter's CSM courses you will experience a full-team scrum simulation over 2-days and shall become more than just a CSM, you'll become a better leader and human.


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