Innovation is critical in a knowledge economy — driving growth, new products, and new methods of delivering value to customers. According to PwC’s 2015 study on Global Innovation, U.S. companies spend $145 billion dollars in-country on R&D each year. And yet, despite its importance, innovation is a difficult quality to cultivate both in leaders and in organizations. In Conference Board’s 2015 CEO Challenge study, 943 CEOs ranked “human capital” and “innovation” as their top two long-term challenges to driving business growth. This is a key talent challenge for most organizations, and a talent gap that needs to be closed, starting at the top – with the role of the CEO.
XBInsight has collected competency data on nearly 5,000 leaders across a wide range of industries. Analyses were done to identify the competencies that innovative leaders share. The top five competencies found in our research are outlined below, including their corresponding behaviors. Every CEO should be cultivating these behaviors to maximize innovative thinking:
Innovative leaders scored 25% higher than their non-innovative counterparts on managing risk. Innovative leaders are bold when it comes to experimenting with new approaches. However, they will initiate reasonable action when potentially negative consequences are expected. When risks do present themselves, they develop plans to minimize the risk and identify where it is needed most.To develop better risk management behaviors, CEOs need to:
- List a minimum of eight ideas for new initiatives. Benchmark best practices for each and identify five opportunities that can be implemented immediately within the organization.
- Identify, document and plan for risks as part of developing strategic alternatives.
- Shift your approach from thinking things through thoroughly toward getting started without knowing all of the answers and adjusting as needed.
- Set a time limit for analyzing a particular situation to avoid overthinking decisions.
- Stop and look at the downside risk of every decision. If you can live with the consequences of a decision, then stop analyzing and go ahead and make the decision.
Innovative leaders also scored higher in terms of demonstrating curiosity. They exhibit an underlying curiosity and desire to know more. These leaders will actively take the initiative to learn new information, which demonstrates engagement and loyalty to company goals. Keeping their skills and knowledge current gives them the competitive edge they need to lead effectively, and also stimulates new ways of thinking in other workers. To develop and demonstrate curiosity, CEOs need to:
- Evaluate their current knowledge and skills. Examine how these skills will help achieve long-term goals. Identify what other skills or knowledge would move you in this direction.
- Create a learning environment or community to encourage the free flow of new knowledge and perspectives.
- Stimulate new thinking by examining mistakes and setbacks as opportunities to learn. Mistakes prompt you to look inward and think about your limitations. By studying your patterns of behavior, you can recognize and correct your behaviors that repeatedly result in mistakes, miscalculations, or the misreading of a situation.
- Make time for developmental activities, such as taking classes and participating in workshops.