Innovation & Digital Transformation: Band Together or Disappear

It seems like obvious logic: If you want to stay relevant, you must transform and innovate. To do this consistently, you must have a robust Capability to Innovate (CTI). Technology does not transform itself—CTI requires people. Those people must be actively supported, which is the practice of engaging through emotional intelligence (EQ) and a leadership style that focuses on removing roadblocks while enabling people to be heard and add value (servant leadership being a prime example).

But, if the logic is so obvious: to expand your CTI, you must develop your EQ and adopt a leadership style that aligns with servant leadership, why will half of today’s S&P 500 firms drop from the index over the next decade? 

Maybe companies are failing to stay relevant (or even alive) because when leaders come together to build Capability to Innovate (CTI) and transform their organizations, they are not speaking the same language as their peers, customers, and stakeholders. They aren’t meeting people where they are.

Confusion Among Experts: How to Proceed

Even well-regarded management consultants get it wrong. I recently read an exchange between two senior-level business leaders about servant leadership—what it is and why it is important. The first provided a definition that was a glancing blow at best—bringing the correct values and character to lead and leaving self-importance behind.

The second executive agreed and complimented the first for defining servant leadership so well. Except they did not. The definition completely missed the mark.

How can today’s organizations build the CTI they need to survive if senior leaders and consultants cannot even define the leadership style they need to get there? 

What Is Servant Leadership? Why Care?  

Servant leadership is a leadership style that asks, ‘how can I help you thrive? how can I help you succeed?’ Servant leadership is an action. It is not a collection of values. It is not being the magnanimous leader standing on high and saying, ‘you matter too.’

As leaders, we should care about servant leadership because it develops and increases our CTI consistently. When we innovate, we create new value. When we make new value, we survive.  

Building CTI Is Your Job as a Leader

To innovate and not be one of the many companies that will die and fade into irrelevance, managers exist to support and expand a firm’s CTI. In their paper, Strategy shift: Integrating strategy and the firm’s capability to innovate, researchers from the Edwards School of Business at the University of Saskatchewan and the Munich University of Applied Sciences layout the prescriptive actions leaders need to take to generate their organization’s CTI and embrace servant leadership. Among them are:

• develop the capacity to generate and test new ideas,
• build the ability to pivot quickly, and
• allow employees the freedom to fail without recourse.

When leaders embrace the servant leadership style of management and eschew command-and-control tactics, this generates cultural change and even disruption. The strategic benefits far outweigh the transitional costs.

Transformative change comes when leaders spend less time directing people and more time supporting them. Companies build CTI and thrive when they build a culture that promotes all voices at the table and the innovation they create.    

Just Say It: We Need Servant Leadership

Leadership courses tiptoe around opining on the different leadership styles. No one seems to want to say that if you are using command-and-control leadership, this is ill-advised for you and your organization.

If you want to be relevant, you need to innovate and increase your organization’s CTI. To do that, your employees must be active stakeholders in your long-term plan. They need to understand the value they bring to your strategy, so they know how to distinguish projects and tasks that generate innovation and value from those that do not.

They cannot get there if they are commanded and controlled. Employees generate innovation when leaders leverage servant-leadership.

Servant Leadership + EQ =  CTI

In their 2020 CHAOS report, the Standish Group calls servant leadership “a move from a top-down command-and-control mode of operation to one that is more about empowering smaller self-directed teams that create solutions through collective consensus.”  

Servant leadership means taking a risk as a leader and putting the needs and success of your employees ahead of your interests. It’s moving away from the zero-sum game of command-and-control leadership to embrace the idea that we all sink or swim together.

Servant leadership requires emotional intelligence (EQ). EQ means we recognize and leverage emotion when we communicate with people around us and make decisions, that our feelings help us conquer challenges and not create them.

As leaders, we need to understand where each one of us ends, and someone else begins. We cannot grow CTI alone; we need the help of those around us. To better engage our peers and employees, we need to embrace a leadership style that aligns with servant leadership.

To embrace servant leadership, we need emotional intelligence. Only then will we create and grow CTI and innovate consistently. And, remember, only the companies that can innovate and transform always will survive.