How leaders foster innovation

By Dr Jana Matthews | 4 min read | How leaders foster innovation. 

The innovation challenge

Innovation is at the heart of every healthy organisation, from commercial businesses to not-for-profits. For the most successful businesses, innovation is ingrained in their DNA and flows through their veins. So how does a leader foster innovation and experimentation?

The secret to deploying successful innovation strategies is to create a culture of innovation. A key part of this is to listen: to your market, to your employees, and to your environment. Ask questions and take the time to hear the answers. Empower, encourage and reward employees that think creatively, and give them time to do so.

So how does a leader foster innovation?

One way is to stop thinking that you or your executive team need to be at the front of all new ideas.

Listen to your customers—they will give you plenty of new ideas. Instead, rather than using consultants to create an innovation plan for your organisation, appoint teams of employees from different departments. Then ask them to come up with five possible solutions to specific issues that are inhibiting innovation. Demonstrating to your employees that their input and ideas are valued, encourages them to think more creatively and innovate. Effective leaders create a culture that embeds innovation into the DNA of their organisation.

To help kick start your innovation mojo, consider these five strategies:


Michael Dell noted that the best learning comes from experimenting and failing. Leaders need to build organisations that encourage their employees to try new things, experiment, and learn from failure. ‘Failure’ is the inability to achieve the expected outcomes. Innovative organisations take time to think about the actual outcomes that were achieved. Take for example 3M—better known as the inventor of Post-it notes. Originally, the company aimed to develop a super-strong adhesive. But instead, accidentally, created the unique low-tack adhesive so famously used in Post-it notes today. Post-it notes is an example of how a ‘failed project’ became a runaway, billion-dollar success. The trick is to step back from a perceived failure and ask, “What outcome did we get?”, “What have we learnt?”, and “What would we do differently next time?”


Great leaders never assume they know what their customers want. Avoid this trap by getting feedback from customers early in the product development process. Involving real customers in the design process puts them at the heart of innovation.

But don’t always take what your customers say at face value. Ask questions to discover their underlying needs. They may say they need transportation, but what they really want is a car that signals status. They may say they need a red jacket when they really want a jacket that makes them feel upbeat and doesn’t wrinkle when traveling. Customers are not always able to describe their real needs, so ask questions, and take a ‘test first, assume later’ attitude.

Discover our Assessment Clinic


Sometimes leaders emphasise the achievements of a solo performer or company star—the top sales person, the creative director or the C-suite executive—and forget to acknowledge the contributions of all the people who enabled that star to shine.

Don’t focus solely on individual achievements. Be sure to reward teams that work well together. Develop a compensation structure that rewards individuals AND teams that innovate.

Some companies do public acknowledgements of innovations and innovators. Others give awards, provide extra leave, or cash bonuses. The bottom line is to develop a system that promotes and acknowledges innovation and compensates those who are innovative.


Google has created a culture and a structure that nurtures innovation. The internet giant encourages its staff to spend 20 percent of their time on side projects. Household names like Google News, Gmail and AdSense are among the products developed as a result of this 20 percent rule.

By setting aside time and encouraging employees to fool around with new ways of doing things, magic can happen. Some of the best ideas come when people are ’playing’.


Leaders need to monitor changes and disruptions in the external environment to help foster innovation. Even successful leaders can get caught unaware. For example, it took a while for Bill Gates and his employees to recognise that Netscape was a huge disruptor. As a result, IBM had the same rude awakening vis a vis Apple.

Leaders need to look outside the company, recognise emerging opportunities, and counter impending threats from new technologies and competitors anywhere in the world. Sometimes leaders need to lead from the front and buy innovation through a licensing deal or merger and acquisition. However, in the long run, it will be less expensive to create a culture and incentives which encourage employees to innovate.

Companies and organisations that don’t foster innovation will die. Sometimes it’s a quick death; often it’s a slow decline. Discovering your innovation mojo can open amazing opportunities for your company. And new possibilities for you as the leader of an innovative company.

 Original Article

Like this article? Try: ‘What CEOs can learn from the ‘school of hard knocks’

Explore our business growth programs