Creating a Culture of Innovation Starts With the Leader

Innovation is the lifeblood of entrepreneurship.

Peter Drucker considers it, "the specific tool of entrepreneurs, the means by which they exploit change as an opportunity for a different business or a different service." That said, the reality is that although organizations value innovation, they struggle to achieve it.

Research by McKinsey revealed 94 percent of surveyed executives were dissatisfied with their company´s innovative performance, and 85 percent of global entrepreneurs create businesses on someone else's idea, Amar Bhide, said.

This all points to a failure in entrepreneurial leadership. The leader plays a critical role in creating the right environment for innovation to flourish. Leaders often look to influence innovation at the organizational (macro) level; but equally they can inspire openness of thinking and ideas at a personal (micro) level.

Influencing innovation and ideas at the organizational level.

There are many strategic ways leaders can influence the flow of innovation and ideas at the level of organizational design that goes beyond the lame suggestion box. Here are three proven approaches.

1. Acknowledge and reward innovation.

Promoting innovation and ideas should be on every leader´s scorecard. Employees should be encouraged to look at their daily tasks through an innovative lens, and they should be acknowledged and rewarded for innovative ideas. Compensation and gift giving is standard practice in progressive organizations such as Zappos.

2. Inject creativity with acquisitions.

Vijay Govindarajan has written about how organizations can inject creativity and innovation into their organizations through joint ventures and acquisitions. Disney's acquisition of Pixar, for example, revitalized Disney´s creative juices.

3. Dedicate time to innovation.

In 1948, 3M launched its 15 percent program, where 15 percent of employees' time was dedicated to innovation. The Post-It note was invented during 15 percent time. Organizations such as Hewlett-Packard and Google have both replicated this approach. Gmail and Google Earth were conceived during Google's 20 percent time.

Influencing innovation and ideas at the personal level.

Oftentimes leaders focus on strategically influencing innovation at the organizational level and can overlook the key role it can play in influencing a culture of openness and ideas through interpersonal effectiveness. Here are some ways leaders can encourage and role model openness and increase the flow of ideas through the way they interact with employees.

1. Increase dialogue.

Very often leaders talk about engaging with others through debate and discussion. These three verbs have very unfavorable etymologies. To engage, from the old French engagier, means to bind by promise or oath; to debate, from the old French debatre, means to beat; and to discuss has its origins in the Latin discutere, meaning to smash or break up.

Dialogue, on the other hand, comes from Greek dialogos, denoting flow of meaning. This is not just semantic pedantry, it gets to the heart of what effective modern leaders do - they broaden perspective, and they facilitate a flow of ideas through shared inquiry.

According to William Issacs, dialogue is a way of thinking and reflecting together. It is not something you do to another person. It is something you do with people.

Leaders can sometimes get carried away by their own status and positional power and feel duty-bound to challenge ideas, and keep everything on track. This closes down innovation. Ideas cannot flow when everyone is arm wrestling; ideas flow when people are curious, inquiring and openly expressing their ideas.

Leaders should recognize that dialogue is key to innovation, and they should be encouraging, cultivating and role modelling shared thinking.

Related: 5 Key Ingredients for Corporate Innovation

2. Suspend assumptions and judgements.

To assume and infer is to process data through our own interpretative lens.

Leaders need to consciously suspend their natural inclination to add layers of meaning and inference to ideas. Critical observation in early ideation closes down innovative thinking.

Two powerful tools that help leaders suspend judgement and remain receptive to new ideas include Chris Argyris' Ladder of Inference and Edward do Bono's Six Thinking Hats.

Related: Has Innovation Reached Its Breaking Point?

3. Actively listen.

Mark Twain famously remarked, "If we were supposed to talk more than we listen, we would have two tongues and one ear."

A key way leaders can inspire people to produce ideas is to take time to actively listen to them. It sounds obvious, but giving someone space to develop their ideas creates a respectful environment, where people feel comfortable expressing themselves.

When leaders are constantly interrupting, talking over ideas, finishing sentences and projecting negative body language, it breaks the creative flow and deters innovation. Rather than giving a person a good talking to, give them a good listening to.

Related: We've Become So Obsessed With 'Innovation' That It's Now Meaningless

Innovation is key to competitive advantage and growth. The 2016 Global Innovation Index, which is an annual ranking of the innovation capabilities and performance of economies around the world, focuses on national policies, but it's individual leaders who can make a difference by driving innovation within organizations and creating a conducive environment for innovation to thrive.