Innovation, Change, and Leadership - Assignment Example

? Innovation and Change Table of Contents Introduction 3 Leadership and its importance 4 Innovation and Leadership- Critical Analysis 7 Conclusion 12Reference 16 Introduction Due to its ability to have wide spread impact, innovation has emerged as an essential topic in the study of economics, entrepreneurship, business and technology. Innovation aids comfort, convenience and efficiency of everyday life in society. With the world getting increasingly globalised along rapid strides in technological development organizations are exposed to cut throat competition and global competitive pressures. Consequently organizations are increasingly faced with the need for constantly changing their ways and strategies in business in order to stay ahead of competitors. Innovation plays the key role in today’s organizations as they strive to design better ways and better processes to satisfy their customers. Innovation is said to play a leading role in satisfying customers in businesses through better quality of services, and increased durability of products. Some of the leading organizations in the world have changed the face of the world with their innovative and cutting edge technology. These innovative technologies have consequently changed the working of households and businesses at large. However, the initiatives towards change must be backed by effective leadership and guidance in order to be successful. In an organizational context, innovation is positively related with organizational efficiency, productivity, competitiveness, market share, quality and other aspects. The project seeks to bring forth how innovation is critical for the success of organizations in the competitive world. This is followed by the role of leadership in implementing the change initiatives in organizations. A critical analysis is provided in this context in terms of previous research results and findings on the subject. Arguments, both for and against the subject are put forth in the project. This is coupled with real life organizational examples depicting how effective leadership has been instrumental in implementing innovative methods and techniques in the organization which have consequently taken it towards growth and success. Leadership and its importance Much has been written about the role and effectiveness of leadership in driving organizations towards success. Leaders play the most prominent role in driving an organization through a change process. Among the range of definitions that leadership has, the simplest one is its ability to influence others in achieving goals and objectives (Selman, 2002, p.1). The personal attributes of a leader plays a significant role in influencing the innovative initiatives taken by executives However there lays a distinct difference between a leader and an innovator. The development of spontaneous leadership within the workforce of any organization is a slow process which remains unresponsive to external elements and this necessitates strategic interventions in the organization. However an innovator might not always play the leader’s role effectively. The initiative towards a new process is generated by the innovator and the change process through which the organization is led is done by the initiative of the leader. That is why extensive research has been conducted to analyse whether innovation is possible without effective leadership. Researchers and practitioners have brought forth views both for and against the subject (Selman, 2002, p.1). Extensive research has gone into the subject of importance and criticality of leadership in organizations. Researchers have primarily made three divisions of the tasks associated with leadership. They are task oriented, relation oriented and participative leadership. Authors have particularly emphasised on such fields of leadership including participative leadership, empowerment and delegation. These studies are particularly helpful for managers for identifying the appropriate decisions to be taken in different situations and circumstances in the organizations (Yukl, 2001, p.1). One of the prominent types of leadership which has been a popular subject of research by authors is charismatic type of leadership. It has received far more attention than the other forms of leadership style. This style has the potential of making remarkable changes in the organization and re-invents the entire organization and society at large. Charismatic leaders are found to be masters of communicators and dramatic motivators. They provide some of the best lessons about the dangers associated with leadership too. Throughout history, charismatic leaders provide ample examples of proving themselves as master manipulators and purveyors of evil. Researchers have also accounted accountability for the failure and collapse of certain organizations towards leaders. These two distinct and different faces of leadership have been brought to the fore by research on the subject (Conger & Kanungo, 1998, p.8). One of the most prominent examples of charismatic leaders in organizations is Bill Gates, who was the chairman of Microsoft. Ranked consistently as one of the world’s wealthiest people in 2009, Gates was announced as the wealthiest overall in 2009. During his tenure at Microsoft, he held the position of CEO in the organization and remained as the largest individual shareholder in the organization. His charisma and leadership style was able to bring about revolution in the world of information and technology (Palshikar, 2010, p.4). Under his leadership style Microsoft was able to attain great height and expansions. Gates was able to successfully transform the entire work culture and structures of Microsoft and heighten productivity levels and performance level of the company to a different level. Besides the personal computer revolution, Gates was able to transform full time work at Microsoft. He even invented the position of chief software architect in the company. It can be concluded that Gates was able to attain this transformation successfully with minimum resistance because of his charisma and style and immense leadership abilities in driving the organization through this change (Virkus, 2010). With the advent of technology and the world changing with rapid strides the importance of transformational leadership and leadership styles have also gained impetus in organizations. Extensive research has also done into the study of effectiveness and importance of transformational leadership styles in organizations. Northouse, (2001) has particularly emphasized on the application of transformational leadership style in organizations as an essential component of changing people’s ways and behaviours. In other words, Northouse claims that transformational leaders have the ability to change people in the way they want, to improve their ways and lead them properly to the desired goals. Thus transformational leaders have the capacity to make an organization more successful and flourishing by valuing and changing the worth of its associates (Hall, Johnson, Wysocki & Kepne, 2012). One of the prominent examples of transformational leaders is Sam Walton, who was the founder of Wal-Mart. The stores were launched across the nation where the leader made visits on a regular basis to meet with his associates in order to find out how and to what extent they appreciated the company’s contributions towards them. One of the prime characteristic of this transformational leader is his belief that the key to success of any organization is to appreciate its associates with praises. His transformational leadership style was able to achieve tremendous contributions and participation of employees in the organization that were greatly satisfied and content with the appreciation, respect and recognition that they derived from the organization (Hall, Johnson, Wysocki & Kepne-a, 2012). Innovation and Leadership- Critical Analysis Innovation has emerged as the popular subject of research in such fields as strategy, marketing, product development and entrepreneurship. There are existences of differences in terminology in diverse bodies of literature; however it is generally described by Garcia and Calantone, (2002) as the quest for finding out new ways of undertaking activities. Tidd, Bessant and Pavitt, (2001) have broadly described innovation as change or the aspect of creation and commercialization of new knowledge in the organization. It is not compatible with cost leadership strategies, as it can create either unit cost reductions or improved willingness of customers to pay higher prices. Innovation has gained immense importance and popularity among business practitioners, policy makers and academicians. Porter and Ketels, (2003) have defined innovation as the successful exploitation of ideas. They are also of the opinion that innovation is a means by which firms can attain competitive advantage in the market over their competitors and rivals prevailing in the increasingly competitive environments (Munshi, 2005, p.13). David Teece has focussed on the importance of two factors, imitability and complementary assets which are crucial for being innovative. In the Teece Model, imitability is referred to as the extent to which competitors can duplicate the process or technology underpinning innovation of an organization. On the other hand, establishing complementary assets such as distribution channels, brand names etc can be used for protecting itself from innovation. Researchers analysing the two dimensions have come up with the conclusion that high imitability and complementary assets available in abundance can make it difficult for firms to make money out of innovation (Teece, n.d., p.6). Managers today are equipped with extraordinary skills and expertise. They account for skilled practitioners possessing traditional and competent business thinking. Business thinking prevails in deep rooted research, logical facts and formulas. The thinkers of businesses are quick in making decisions and looking for the right answers amidst a wide range of wrong answers. However, removing ambiguity is a critical component in making successful decisions. Leaders have the important responsibility of slowing down work activities at times, reflecting and approaching the ambiguous situation in an unconventional manner using innovative thinking. Thus innovation and the power to innovate has emerged as few of the most crucial aspects of successful business thinking in organizations (Horth, 2009, p.8-9). Researchers have increasingly stressed upon the need for innovative thinking by organizational leaders. In fact the zeal to drive an organization with an innovative approach cannot be possible with an effective leader. They consider leaders as an essential and critical factor for driving an organization in an innovative process or approach. Bartlett and Ghoshal (1994) have particularly stressed upon cases to discuss and bring forth the role and responsibilities of leaders in generating an organizational situation and context which encourages and enhances innovation. According to their opinion leaders play a prominent role in taking an organization through the innovation and change process by introducing such factors as flexibility, discipline and trust. These factors have been described by Gibson and Birkinshaw as some of essential organizational context attributes. They have found a strong and direct link between these attributes and innovative outcomes in the organizations. Consequently this provides strong grounds between the close association between leadership and innovation in organizations. These researchers have focused on the roles and responsibilities of senior managers in the organizations in designing key signature processes and integrating mechanisms which are deeply rooted and in alignment with the existing values and objectives of the firms. Tushman and O’Reilly (1996) have out forth the opinion that organizations can simultaneously pursue innovation and efficiency if the above activities are structurally segregated from one another, however they must be integrated entirely by the top management. This is possible by the leaders’ ambidextrous nature in their choices of different organizational designs and their roles in integrating the different business processes. Recent researches conducted by O’Reilly, Tushman and colleagues have broadly confirmed these notions completely (Munshi, 2005, p.12). Interest is growing with regards to the influence of leadership on innovation and creativity at the workplace. According to Bass (1995) leaders play the critical role of raising the performance expectations of followers at the place of work. Bass has particularly focussed on the role of transformational leadership in this context. Four essential components are included in the transformational style of leadership, such as individualized consideration, charismatic role modelling, intellectual stimulation and inspirational motivation. Using the aspect of “charisma” leaders inspire admiration, loyalty, respect, and shows emphasis on the aspect of possessing a collective sense of mission. Through the use of individualized consideration, leaders are able to create successful one-to-one relationships with followers and seek to understand their different needs, requirements and skills and aspirations. The inspirational motivator successfully articulates an exciting vision of the future to the followers and subsequently shows them how to achieve those goals. Additionally he also expresses his belief that they can do it. On the other hand the intellectual simulator successfully elevates or broadens the interest level of his followers and group and encourages them to consider news of thinking of old problems (Gumusluoglu & Ilsev, 2007, p.462). Several studies have reported that transformational leaders empower their followers in the change and innovation process. This way they implement an innovative climate in the organization. However, very little research has gone into the subject of the mediating roles of innovative climate and empowerment existing in the relationship between the transformational leadership and followers’ creativity. Researchers have also come up with conflicting findings on the role of leadership in innovation and creativity in organizations. Jaussi and Dionne (2003) have reported that leadership does not relate to the individual creative performance of followers in organizations. This finding was contrasted with the finding of Shin and Zhou (2003) who conducted a research top investigate the effects of leadership on the individual level of creativity in real business settings on a sample of 260 numbers of employees and their supervisors from 46 companies. The results revealed that Korean employees demonstrated more creativity under the transformational style of leadership. The positive relationship between organizational leadership and creativity and innovativeness of followers throw light on the fact that their creativity and innovative behaviours are highly and successfully enhanced and triggered by the role of leadership, which in the absence of it would not be possible (Gumusluoglu & Ilsev, 2007, p.463). There are instances where organizations have succeeded without the active participation and involvement of leaders. These instances reflect the criticality and importance of organizational structures for the nurturing of an innovative culture. Researchers have typically tried to find a positive influence of environmental, organizational and individual variable and their implications in driving innovation. In a research conducted by Booz Hamilton on factors influencing innovation process in organizations, they have come up with the finding that most large organizations seek to change their organizational structure in order to improve and enhance organizational performance and productivity. The structural change also triggers better ways and avenues of conducting a work process in the organization. The finding revealed that there is only anyone structure appropriate for successful completion of work. Different organizational structures work differently under different circumstances. Some of the leading organizations which have successfully created a structure and culture conducive for innovation are Intel and Sony. This was achieved through implementing a successful work atmosphere for innovation. An organizational structure must be created which works best according to the external environment and internal circumstances in the organization. The management typically encourages people to be innovative by recognition, rewards, awards and appreciation For example Intel was able to create and nurture a culture of innovation without depending on a single leader by depicting a picture of openness and innovation in the people’s minds. Mintzberg’s structural archetypes highlight key features and innovation implications in organizations. Researchers argue that there is no single best and suitable structure for an organization. Successful organizations are those which develop the most suitable fir between their structure and operating contingencies. For example, it is absolutely suitable for structuring the operations of an organization like Mc Donald’s in a highly controlled and mechanistic form such as it is able to replicate the model across the world when delivering similar services and products (Wheelen & Hunger, n.d., p.108). Additionally researchers have also stressed on the need for training for nurturing a culture of innovation in the organization. Effective training and development activities are considered to be a prerequisite for innovative approach in an organization. Depending only on leadership and a single leader’s initiative may not be sufficient to drive an organization towards growth and success. Employees must be adequately trained to deliver their performance in the desired direction. Continuous training, learning and coaching can be extremely effective in driving innovative procedures and work processes in an organization. Among other important and crucial factors for innovation is team work and group activities. Researchers are of the opinion that innovation cannot be possible without team effort. A single individual would not swing into action if they were not complimented and supported by fellow employers in the organization. Moreover an effective communication system to persuade spirits to swing into action is also required (Adair, 2007, p.124). Conclusion Innovation has become all the more popular during the age of globalization when the entire world has been increasingly merging into one unit. This has triggered global competition where all firms, big and small are threatened by the entry of big and giant organizations. However, with globalization tearing down the geographic barriers and boundaries which once kept organizations from attaining and exploiting their full potential, their ability to innovate and generate creative and critical thinking has got a substantial boost and advancement. They are increasingly being able to tap the fresh and value generating ideas of employees, and also their partners, customers, suppliers as well as other parties much beyond their own boundaries. The above study reveals a number of important and critical facts about the role of innovation in organizations and how leadership activities in the right direction is an absolute essential for exploiting the complete potential of firms. The analysis reveals that in order to be innovative firms must possess the desired leadership potential to drive the innovative thinking in the proper direction and implement the innovative approach in practice. The study conducted by Scott and Bruce (1994) on the role of leadership in innovation reveals that the leader’s behaviour did have an implication on predicting the climate for innovation within organizations. This is particularly in alignment with the LMX theory or the leader member exchange theory. The study revealed that greater the interaction between leaders and their subordinates greater the chances of creation of a perceived climate of innovation in the organization. Kazama, et al (2002) is particularly of the opinion that actions of leaders have a special implication of innovation in the organization. It was also found that it would be impossible for organizations to attain creative and innovative outcomes without the support from organizational leaders. Leaders account for playing the key driving force in the improvement of organizational performance and productivity as they possess key decision making abilities which plays a crucial factor in innovative organizations and also determines the deployment and development of organizational resources effectively (Akkermans, Isaksen & Isaksen, 2008, p.7). Researchers have stressed upon the personal attributes of a leaders which plays the critical and crucial role in driving innovation and creativity in organizations. Not only does the leader trigger and instigate a new thought process and innovativeness in the organization but also acts as a driving source of inspiration and encouragement for followers by leading them through the change process. By studying the leadership style which are moist appropriate for organizational innovations, it was found that the charismatic style of leadership works best in driving innovation in organizations. This leadership style is fast to convince followers about the need for the changes and how they can be benefited through the same. Charismatic leaders are found to excellent communicators and dramatic motivators. History depicts ample examples of charismatic leadership and the role it has played in making successful changes in organizations. One of the prominent examples of charismatic leadership is Bill Gates of Microsoft. His charisma had a positive influence of behaviours of executives in his organizations which he effectively used in his advantage to successfully change the organization. Being a strong and influential character, Gates could manage change resistance with excellent ease and minimum effort. Gates was able to manage change resistance very easily and made structural change throughout the organization. It took the organization to a greater height of transformation and achievement and immensely heightened the performance and productivity level of Microsoft. Transformational leadership also plays the critical role of successfully implementing organizational changes. Sam Walton of Wal-Mart is a leading example of transformational leadership who was able to dramatically change the face of Wal-Mart and emerge as one of the leading retail giants in the world. There are also instances where organizations have successfully implemented changes without particular initiative from a single leader. Inculcating a structure which works best in alignment with the firms' external and internal environment has been beneficial for certain organizations to drive innovation and led these organizations to success. However, inculcating this culture also has to be coupled with required rewards and recognition process such that employees feel initiated to be innovative. Intel is one such example of organization which has been successfully created a structure and culture where employees are rewarded for being innovative and for bringing forth and applying their innovative instincts and efforts in the organization. However, this was also coupled with proper training and developmental activities so as to enhance performance and productivity level of employees in the desired directions. The study reveals that innovation has emerged as one of the prominent factors accounting for competitive advantage of firms operating in the global business environment. However nurturing a culture of innovation and creativity without the aid and assistance of effective leadership is an absolute necessity. Researchers are particularly of the opinion that leaders play the most prominent role of driving a culture of innovation in the organization. In this context some of the prominent examples which can be cited are Bill Gates and Sam Walton who have successfully changed the culture and structure of Microsoft and Wal-Mart respectively. It is the personal attributes of the leader which essentially contributes towards transforming the vision and direction of the organization. Their charisma, commitment and belief is what people replies on and are encouraged to change their efforts towards a new and different direction. Researchers have particularly found that charismatic leadership plays an effective role on encouraging people towards a different vision. People feel encouraged to follow their leader and also handling resistance towards change becomes easy and controllable under this style of leadership. However the contribution of leadership in innovation is not free from criticism. Researchers have shown instances when without the role of a single leader; organizations have successfully implemented an innovative culture and structure in their organization. People feel enthusiastic towards being innovative out of the effective rewards and recognition schemes coupled proper training and developmental activities in the organization. Intel is a prominent example of such an organization which has been able to create a structure and culture conducive for innovation and creation. Reference Adair, J. (2007). Leadership for Innovation: How to Organize Team Creativity and Harvest Ideas. Kogan Page Publishers. Akkermans, H. J. L., Isaksen, S. G. & Isaksen, E. J. (2008). Leadership For Innovations: A Global Climate Survey. CPSB. [Pdf]. Available at: http://www.cpsb.com/research/articles/featured-articles/Global-Climate-Survey-Technical-Report.pdf Conger, J. A. & Kanungo, R. N. (1998). Charismatic Leadership in Organizations. SAGE. Gumusluoglu, L. & Ilsev, A. (2007). Transformational leadership, creativity, and organizational innovation. Journal of Business Research 62 (2009) 461–473. [Pdf]. Available at: http://qpsy.snu.ac.kr/teaching/paper/paper3_3.pdf. [Accessed on April 26, 2012]. Hall, J., Johnson, S., Wysocki, A. & Kepne, K. (2012). Transformational Leadership: The Transformation of Managers and Associates. [Online]. Available at: http://edis.ifas.ufl.edu/hr020. [Accessed on April 26, 2012]. Hall, J., Johnson, S., Wysocki, A. & Kepne, K-a. Transformational Leadership: The Transformation of Managers and Associates. [Online]. Available at: http://edis.ifas.ufl.edu/hr020. [Accessed on April 26, 2012]. Horth, D. (2009). Innovation Leadership. Center for Creative Leadership and Dan Buchner, Continuum. [Pdf]. Available at: http://www.ccl.org/leadership/pdf/research/InnovationLeadership.pdf. [Accessed on April 26, 2012]. http://www.businessweek.com/magazine/content/06_17/b3981401.htm Munshi, N. (2005). Leadership for Innovation. AIM Research. [Pdf]. Available at: http://www.aimresearch.org/uploads/File/Publications/Academic%20Publications%202/Leadership_for_Innovation.pdf. [Accessed on April 26, 2012]. Palshikar, K. (2010). Charismatic Leadership. [Pdf]. Available at: http://www.unc.edu/~ketan/documents/Charismatic%20Leadership.pdf. [Accessed on April 26, 2012]. Selman, J. (2002). Leadership and Innovation: Relating to Circumstances and Change. [Pdf]. Available at: http://www.innovation.cc/discussion-papers/selman.pdf. [Accessed on April 26, 2012]. Teece, D. (No Date). Models and frameworks. The Teece Model. Virkus, S. (2010). Development of Information and Knowledge Management. [Online]. Available at: http://www.tlu.ee/~sirvir/Information%20and%20Knowledge%20%20Management/Development%20of%20IKM/bill_gates.html. [Accessed on April 26, 2012]. Wheelen, T. & Hunger, J. D. (No Date). Innovation and Change. Concepts in Strategic Management and Business Policy (Thirteenth Edition) pp303-312. Yukl, G. (2001). Leadership in Organizations. National College for School Leadership 2003. [Pdf]. Available at: http://files.liderancaecoaching.webnode.com/200000015-31f5732fb3/media-F7B-97-randd-leaders-business-yukl.pdf. [Accessed on April 26, 2012]. Read More