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 OJL  Vol.10 No.3 , September 2021
Innovative Leadership: A Literature Review Paper
Abstract: Innovation and leadership have been two key areas of research in the last decades. Various scholars have come up with multiple definitions of the terms, all revolving around the influence notion. Leaders have been reported to influence other individuals to dedicate their efforts to attain a given objective. Leadership, however, is a broad term, possessing many definitions. It includes and affects various approaches, situations, skills, reactions, competencies, and qualities. On the other hand, innovation is a practical implementation of methods or ideas that facilitate introducing new products or improving how services and goods are offered. To clearly understand the real meaning of innovative leadership, it is crucial first to fathom the leadership and innovation concepts. The paper aims to review the innovative leadership style as portrayed in the literature, and combining the two terms, and offering more insight and structural foundation for researching elements of innovative leadership.

1. Introduction

The modern world’s vigorous nature is seen in the rapidly changing and competitive society in which the capacity of the organization to get used to the changes and transformation has a considerable value. It can be viewed that digitalization, the technological revolution and the determination towards globalization have meaning that innovation is regarded as a vital factor for the organizations to attain a competitive advantage and confront the challenges that are related to the uncertainty, therefore making sure their success in the market (Vargas, 2015). The innovation is significant for the assurance that there exists a competitive edge for the organization (Tohidi & Jabbari, 2012). The risk of unsustainability increases with the failure to innovate thus organizations and their leaders think that it is significant to raise a climate in which the innovation can be established inside the organization (Shanker et al., 2017). This is the reason why successful organizations, particularly the ones that have effective managers, give the foremost priority to the expansion of mechanisms and methods of attaining the innovation that is an exception.

(Schumpeter, 1934) is regarded as the first author on this subject; he claimed that innovation occurs as a result of the knowledge and the creation of the inventions that are accessible, these are considered as the source of attaining the competitive advantage for the organizations between the speedy changes that take place in a business environment. He also reasoned that the concept of innovation is a brand-new process, a service, a brand and a creation of a product that assists the economic system by permitting the development of the new originalities. It is also regarded to be a support (product or service) used to improve the competitive advantage for an organization (Nyström, 1990).

Research in innovative leaders has placed great emphasis on the role of innovative leadership in achieving organizational success (Alsolami et al., 2016; Amabile et al., 1996; Samad, 2012; Samad et al., 2015; Vlok, 2012). They can be executives, managers, or entrepreneurs who are responsible for the effective start, promotion, and directing the innovation in their organizations (Deschamps, 2003). There is a difference in the behaviour of innovative leadership as compared to traditional leadership behaviour (Alsolami et al., 2016). But still, it is said that the role of innovation leadership is not fully understood and therefore requires a further examination (Shavinina, 2011; Vlok, 2012). Innovative leaders must have multiple features of leadership styles, the literature on this topic suggests that there is still a research gap between innovation and leadership. Therefore, the main purpose of this paper is to set and provide insights into new attributes for innovation leadership.

2. What Is Leadership?

Firstly, the study begins by presenting the various leadership definitions from different scholars. According to (House et al., 2004), leadership is viewed as the ability of a person to motivate, enable or influence other individuals to work toward the success and effectiveness of an organization to which they are associates (House et al., 2004). (Blagoev & Yordanova, 2015) view leadership as the ability of an individual to convert visions to realities. Another scholar named John Maxwell believes that leadership is entirely about a person’s influence on others (Maxwell, 2005). (Kruse, 2013) Kruse’s research on leadership concluded that it is a process where an individual can influence others to maximize their work efforts towards attaining its goals. (Drucker, 1996) Drucker’s findings of leadership were also in line with the other scholars’ findings, all drawing to the point that leadership is all about having the ability to influence others to perform a given task.

It was claimed by (Yeo, 2006) that a significant role is played by the leaders in the workplace which aids towards the organizations’ success as a whole. Therefore, the leaders are the ones who are responsible for the establishment of the environments in which the employees are able to share the knowledge, learn and work in the direction of the achievement of the goals. The leadership was seen as a complete capability of the individual to push and motivate the people surrounding him/her in order to contribute voluntarily or willingly for the achievement of the goals (Goetsch et al., 2006). (Ismail et al., 2010) claimed that the performance of the individual is clearly influenced by the level of trust that exists among the leader and his followers. As suggested above the leadership can be regarded as a process of influencing the individuals/group activities who work in the direction of the goal’s achievement in any provided situation. Therefore, leadership is regarded as a process by which a person is capable of motivating the followers to attain the objectives and goals that are common (Northouse, 2017).

It is also seen that leaders are capable of inspiring their followers by the way of encouragement, motivation, and building confidence so that they can achieve the objectives of the organization (DuBrin, 2015). It is accepted extensively that leadership has the ability to affect the vision of an organization and its direction that also effects the way in which organizational stakeholders concisely deliver the essentials of innovation, that not only solely aids in the generation of ideas, but also regarded as a mandatory factor for the innovation enhancement and the success of an organization (Ashraf & Khan, 2013; Gumusluoğlu & Ilsev, 2009; Naguib & Naem, 2018). The above definitions clarify that leadership is not connected to any individual person or his/her position in an organization, seniority or any of the personal attributes rather it is the ability of one to inspire other people for the attainment of the goals that are specified.

3. What Is Innovation?

Innovation began to be an object of great importance since the 20th century. The term attracts much attention in various disciplines like science, sociology, engineering, economics, and business. However, even though it has been explored in multiple disciplines, it remains poorly understood. Mostly, innovation gets confused with other terms like creativity, design, invention, and change. Besides, few definitions clearly illustrate the real meaning of innovation. According to (Kahn, 2018), innovation refers to three things: Mindset, process, and outcome. Referring to innovation as the mindset implies that it is ingrained and instilled in individuals. Only when these individuals are in an environment that supports organizational culture will the innovation in them flourish. As a process, it implies that some steps need to be followed in an organized manner to achieve the goal. Finally, as an outcome, it means that innovation is the output attained, i.e., product innovation, marketing innovation, and process innovation outcomes (Kahn, 2018).

Based on Bishop’s research study (Bishop’s 2016), innovation is illustrated as having four key aspects. These aspects include ideation, value creation, implementation, and collaboration. (O’Sullivan & Dooley, 2008) O’Sullivan & Dooley’s definition is among the most used to define this term. According to their findings, innovation refers to the processes a given organization utilizes to make changes to an already existing service or goods by introducing something new, which adds value to the consumers (O’Sullivan & Dooley, 2008).

Every great idea requires an innovative organization or leader to establish it into a final product and avail it to the market. This now gives us the interface of leadership and innovation. The relationship between innovations and leadership concerns the leaders’ necessity for inventions, not vice versa. The central question lies on why and whether leaders require innovations. The possible feedback to that question is yes, they do, considering that innovations are among the most vital tools used to influence. The impact these innovations have on other individuals enables leaders to conduct their leadership tasks successfully. However, in current years, innovations are much connected to the business environment changes.

To respond promptly to market needs, influential leaders place their focus on innovations. Being a leader indicates leading and being different towards several changes that opt to boost the affairs of the current business state. There is an excellent distinction between personal and organizational leadership. Unlike personal leadership, organization leadership has no association with individual competencies and skills (Mastrangelo et al., 2004). Organization leadership is thus believed to be the capability of an organization to lead or outstand in the given business sector.

4. Types of Innovations

There are two kinds of innovation: value-added and exploratory innovation (Jansen et al., 2006). Value-added innovation involves improving and modifying existing ideas, whereas exploratory consists of new ideas (Benner & Tushman, 2003). However, in both cases, the generated ideas need to be useful to be treated as innovative. Just like the findings of (Kahn’s 2018) research, (Jansen et al., 2006) confirm that innovation and creativity are two different terms and should not be mixed up. According to (Jansen et al., 2006), creativity refers to formulating novel ideas that may not be implemented. Value-added and exploratory innovation need different behaviors and leadership styles to succeed (Jansen et al., 2009).

4.1. Value-Added Innovation

Value-added innovation, as stated above, involves taking a minimal risk since the services or products already exist and are only being revised and refined (Benner & Tushman, 2003). In this instance, the transactional type of leadership needs to be adopted by the innovative leader. Transactional leadership is the best fit for the value-added innovation type since open leadership behaviors such as inciting members to take risks and experiment with new things are not used. Instead, this type of innovation utilizes closed leadership behaviors, which do not reward or condone risk-taking. Ford Motor, Toyota Motor, and General Motors companies are excellent examples of globalized companies whose innovative leaders utilize this type of innovation (Benner & Tushman, 2003). Value-added innovations for these motor companies include making some improvements on already existing cars like boosting car speed, improving gas mileage, and making the interiors of the car more comfortable.

There are instances where value-added innovation can apply the transformational type of leadership, i.e., in cases where an already existing product or service is being introduced to a new market. An excellent example of this instance is Aspirin medicine. The medicine has existed since ago, and many have used it to alleviate pains and aches. The same drug has now been introduced to a different and new market through inventing new uses like using it to minimize the formation of blood clots and preventing heart attack (Benner & Tushman, 2003). The existing product’s usage was changed and the drug availed in a new market in such a case. From the example, Aspirin made improvements, an already existing drug, implying that transactional leadership is needed. However, a transformational type of leadership is necessary, too, as the product is being introduced to a new market, which is characterized by high-risk taking. In value-added innovation, the innovative leader should weigh options between radical thinking and the level of risk involved for them to determine the best leadership type to adopt (Benner & Tushman, 2003). Leaders should also be flexible persons who are ready to embrace new leadership behaviors depending on the situation.

4.2. Exploratory Innovation

Unlike value-added innovation, exploratory innovation involves high risk-taking since a brand new product or idea is being launched to the market (Oke et al., 2009). Therefore, the exploratory foundation gets characterized by high-risk taking, experimentation, and discovery. The innovation type utilizes open leadership behaviors and requires opportunistic, highly adaptive, and flexible leaders to offer intellectual provocation to their members. Therefore, for an exploratory innovation, the organization needs to adopt a transformational leadership type (Oke et al., 2009). Behaviors portrayed are trusted to aid in attaining the desired results from members via the application of inspirational motivation, charisma, and personal consideration. The information introduces us to the various types of leadership that exist for organizations.

5. Types of Leadership

Various researchers have conceived leadership as a case of a group, environment, or personality. Leadership is taken as a process where certain characters influence others to agree and understand what must be performed collectively and effectively to attain the organization’s vision (Burns, 1978). However, different leaders possess different leadership styles. The various categories of leadership include transactional, transformational, delegative/laissez-faire, participative/democratic, and authoritarian/autocratic.

5.1. Transactional Leadership

This style of leadership uses exchanges between employees and their leaders. For example, the leader to get a task performed uses punishments, rewards, and other types of exchanges. The leader presents clear objectives, and members get to know if they comply with the rules, the reward that awaits (Bass et al., 2003). The style possesses various advantages as employees’ productivity and motivation increase. Employees also get to choose the reward system, and it eliminates any confusion within the command chain. However, in this leadership style, empathy, creativity, and innovation are minimized. An excellent example of organizations that use this leadership style for their value-added innovation includes General Motors, Ford Motor, and Toyota Motor (Oke et al., 2009).

5.2. Transformational Leadership

In this leadership style, a leader motivates and inspires their members with the organization’s mission and vision and empowers/encourages them to attain it (Bass & Riggio, 2006). Leaders serve as vison role models. The style possesses various advantages as it promotes innovation within the organization. Lower employee turnover is experienced and uses inspiration and motivation to gain the employee’s support. Employees under this leadership style have high job morale since it emphasizes building their relationships (Bass & Riggio, 2006). Exploratory innovative leaders use this leadership style since it involves taking a significant risk. Leaders who use this style of leadership possess various qualities, which include: have a clear vision, can operate a company’s change agents, are courageous; thus, they hesitate not taking bold steps, and they are driven by value (Stewart, 2006). They are also able to operate in convoluted situations, and their learning abilities are excellent.

5.3. Delegative/Laissez-Faire Leadership

The style of leadership is also referred to as “laissez-faire” (Cherry, 2006). It pays more attention to allocating initiative to members and can be successful only if the team members are competent, prefer engaging, and take responsibility in individual tasks. Disagreements, however, among members can divide and split the group resulting in low morale and motivation (Cherry, 2006). Creativity and innovation are valued, and a positive environment gets created. Decision-making is left to the members and the accountability to the leaders. As a result, the decision-making process is fastened, and personal growth is encouraged. However, since the members receive minimal guidance from their leaders, they may mostly fail to know what to do at what time (Cherry, 2006). Delegative leaders are mostly withdrawn, unconcerned, and uninvolved, resulting in a lack of glue among the members.

5.4. Strategic Leadership

As described by (Ireland & Hitt, 2005), strategic leadership is the capability of a person to predict, foresee, think strategically, and work with others for the initiation of changes which establish a practical future for an organization. The ability of individuals to make their day-to-day decisions relating to both the short-term and long voluntarily for the purpose of growth and existence of an organization is defined as strategic leadership (Rowe & Nejad, 2009). It was suggested by the Upper echelons theory that strategic leaders have an over-all effect on an organizational result (Hambrick & Mason, 1984), particularly, due to their influence on the resource commitment, strategic choices, and application of the strategies (Carpenter et al., 2004; Gerstner et al., 2013). Strategic leadership urges the innovation directly to the environmental change and thus moves forward as to be interested in the organization ability to attain the benefit for the company (Semuel et al., 2017). The most significant feature of strategic leadership is its clear vision and values that permit employees to share their operational decisions.

5.5. Participative/Democratic Leadership

It is also referred to as democratic leadership (Chen & Tjosvold, 2006). Team members are involved in decision-making, thus feel motivated, engaged, and included. As a result, it is advantageous that employees’ job satisfaction and motivation increase, facilitating creativity (Chen & Tjosvold, 2006). Participative/democratic leadership follows several steps while deciding: first, whenever a decision or issue is handled, the whole group discusses the issue. Next, the leader oversees the discussion and provides all the necessary information to the group. Then, the members share their various ideas regarding how the issue can be solved. After that, the leader analyzes the information and ideas, and the best decision is chosen based on the members’ feedback. Lastly, once the decision is made, what follows is the implementation of it. However, this type of leadership can at times consume much time to conclude.

5.6. Authoritarian/Autocratic Leadership

This leadership utilizes a top-down approach in matters of decision-making, policies, and procedures. Leaders use this style of leadership define outcomes and imposes expectations. Members rarely contribute to any decision since the leader is the only one considered most knowledgeable (Schuh et al., 2013). The choices made by these leaders are typically hinged on their judgments and ideas. Autocratic/authoritarian leadership thus involves total control of a group. As much as leaders that practice this type of leadership attains consistent results with minimal mistakes, innovation and creativity are drastically reduced. Members under this type of leadership are left feeling belittled and less trusted by their leaders. As a result, rigid and highly structured environments are created. Since leaders decide almost everything, thinking out of the box and creativity is discouraged (Schuh et al., 2013). Members under this type of leadership appear to have a job in satisfaction and low job morale and innovation.

6. Innovative Leadership

Innovation is crucial for any organization booming in the current 21st-century era (Elkington & Booysen, 2015). The globalized era suggests the necessity of a new kind of leadership, dissimilar to that which prospered in controlled environments (Solow & Szmerekovsky, 2006). According to Probst & Raisch’s research article (Probst & Raisch, 2005), organizational burnout is a significant threat to the complex context of the new era unless leadership gets formulated in a design that permits the system to self-develop and continually regenerates within hyper-complexity and hyper-uncertainty contexts (Probst & Raisch, 2005).

Regarding Şen & Eren’s findings (Şen & Eren, 2012), innovative leadership refers to introducing a brand-new method, product, service, technique, or an idea to satisfy individuals’ needs and find solutions to current and future problems (Şen & Eren, 2012). Innovation leadership thus refers to a technique and philosophy, which combines various leadership styles to influence and motivate employees to generate products, services, and creative ideas (Horth & Buchner, 2014). The fundamental role in the innovation leadership practice lies in the innovative leader. Approaching organizational development, innovative leadership is believed to promote the attainment of the vision and mission of a group or organization. Innovative leaders possess various like-qualities: they have leadership skills, talents, values, and knowledge to identify any current dangers and foresee future negative impacts (Şen & Eren, 2012). Innovative leaders are also committed and visionary to promoting people’s social, political, and economic well-being (Anand & Saraswati, 2014). With new processes and technologies, it is vital for the organization to innovatively think to ensure it stays competitive and succeeds (Horth & Buchner, 2014). For an organization to effectively conform to new changes, leaders play a significant role in shaping the success and nature of inventive efforts. Organizations that lack innovative leadership are more feasible to struggle.

(Abbas & Asghar, 2010) stated that globalization had transformed the universe into a comprehensive small village. Organizations in this globalized village engage in high competition and high contentions streams (Abbas & Asghar, 2010). In this case, an organization’s most beneficial and effective action is to generate innovative business methods. Abbas & Asghar’s (Abbas & Asghar, 2010) research findings indicated that leadership plays a vital role in facilitating innovations and bringing change to an organization (Kennedy, 2000). Leaders are the change agents who can bring or initiate these changes within an organization (Senior & Fleming, 2006). Changing markets, rapid advancements in technology, and increased customers’ expectations have coerced organizations into reevaluating and reassessing how they operate to implement, adopt and understand their business-changing model (Abbas & Asghar, 2010). The research findings indicate that 70% of organizations fail to attain their goals (Abbas & Asghar, 2010). Bad leadership gets linked to that failure since it plays a central role in cultivating and evaluating an organization.

7. Critical Factors for Successful Innovative Leadership

For a given leader to be considered successful, they must possess the following: firstly, one must be knowledgeable. In the current century, knowledge is viewed as a powerful tool that facilitates success. It is a vital factor for the practices of innovative leadership. An innovative leader needs to be aware of and understand their people’s problems and formulate new means and ways of solving them (Şen et al., 2013). A leader needs to know the methods, rules, processes, principles, and technologies within their organization for them to be able to determine the how what, and why in solving a given problem.

Successful innovative leaders must possess both the values and explicit knowledge (Farkas & De Backer, 1996). Values knowledge refers to knowing the social ideas, beliefs, intuitions, values, and imaginations (Lebow & Simon, 1997). At the same time, explicit knowledge refers to technical knowledge.

Secondly, an innovative leader needs to possess various values, skills, and talents. Values offer means, beliefs, and reasons for establishing an organization’s vision. It also motivates and guides leaders for successful vision achievement (O’Neil, 2004). Each leadership action and decision ends and begins with values. In addition, values significantly impact the leader-members relationship and aid leaders in establishing a close relationship and open communication environment (O’Neil, 2004). Some values that successful innovative leaders possess include courage, trust, honesty, integrity, equality, morality, and human rights.

Skills are established when a leader has knowledge of the organization. When leaders are experts, the quality of the product is high (Colvin, 2010). The risk of doing one thing severally is reduced, and the time take to perform a given task is also shortened. Therefore, talents are vital for fruitful innovation. Talents like being visionary and brilliant enable a leader to achieve and select suitable activities. These qualities allow innovative leaders to be ahead of time and their competitors (Colvin, 2010). Talents also offer various competitive advantages, such as analyzing, thinking, understanding the present, and seeing the future. With that, an innovative leader can implement and develop better strategies.

Lastly, an innovative leader needs to possess willpower. Considering Ludwig’s (Ludwig, 2002) study on political leaders, aspiring leaders seek high office due to them being biologically and socially driven and motivated to do it (Ludwig, 2002). These leaders have big dreams and are visionary. Their aim of attaining their vision and reshaping their society drives them. They possess a strong will to be a great leader, thus go to the extent of risking their lives just to possess and maintain it (Ludwig, 2002). It was determined by (Hill et al., 2014) in their research that there is a requirement of leaders who should necessarily discard the traditional leadership styles in order to establish an organizations that is able of continuing the innovation and construct the teams who are creative. It is meant by this kind of a leader should possess the determination that pushes him/her to become an innovative leader. Consequently, it is believed that innovative leaders are capable of achieving all the targets they wish to.

8. Characteristics of Innovative Leadership

There are various characteristics of innovative leadership, which include: risk tolerance. Innovation involves taking a high risk since new products, services, and ideas are being launched into the market (Davis, 2019). The other characteristic is domain expertise. Innovative leaders need to have a great deal of knowledge for them to generate creative ideas. These leaders should also be open-minded, implying that whenever their members raise an idea, they should explore it, thus leading to innovative outcomes (Abdullrazak & Alyamani, 2019). Innovative leaders are individuals with low anxiety. Chronically anxious and stressed individuals get carried by little things and, in return, make their members feel threatened and anxious over minor issues. Innovative leaders should be able to make their members feel secure and comfortable. Emotional stability is another characteristic that these leaders should possess (Vitello-Cicciu, 2003). Ideally, these leaders are wired to be positive and happy to maintain the same environment in their workplace. They should not be individuals with elated mood swings. Other characteristics include confidence, action-oriented, serious play, collaboration, and attentiveness to details.

9. Steps for Becoming an Innovative Leader

Innovative leadership is vital in today’s market. Organizations need thus to adopt new methods and ways of running things to stay and remain competitive. Below are five steps leaders can follow to become innovative. Firstly, leaders need to put away the “best practice” notion (Fragouli & Korres, 2017). “Best practice” is a phrase only linked with non-professions. Best practices in this context refer to things done by others, and results were positive. Innovative leaders should not be the type of people who cling to a particular method of doing things but should encourage their employees to experiment and take risks. Whenever a problem arises, an innovative leader should be a creative and critical thinker to develop new ways and solve a given situation. The second step is decision-making acceleration (Fragouli & Korres, 2017). Decisions made by an innovative leader are different from most. It is so since these leaders have trust and confidence in their members; thus, decisions are made quickly and without hesitation. While making some decisions, an innovative leader may not fully agree or understand it, but they take a stand depending on their members’ expertise and experiences. The other step is allowing members to run some initiates or solve problems. An innovative leader is a person who knows when to involve themself in problem-solving or in an initiative and when to let their members deal with it. By doing so, the innovative skills of the members get unleashed. Becoming failure tolerant is the fourth step (Chutivongse & Gerdsri, 2015). It is difficult to quantify and measure innovation, especially if it is short-term. Success is also not guaranteed. Since innovation involves risk-taking, leaders opt to accept failures in few instances though it should not be a norm. An innovative leader should coach and train their team members on how to keep off from fear of failure. Failures should only be used as lessons and use their strengths, not weaknesses, to attain future goals. The last step consists of recognizing and rewarding (Chutivongse & Gerdsri, 2015). To create an innovative workforce, they must appreciate innovative ideas raised by the members through rewarding them. When employees feel recognized each time they perform a task or present ideas, they are motivated and experience job satisfaction. Their job morale is boosted, and they are motivated to think outside the box, thus generating more ideas that are vital in business.

10. Conclusion

From the above, it is evident that innovative leadership is crucial for all organizations that intend to remain competitive in this 21st century. To help understand innovative leadership, two key concepts needed to be evaluated first, i.e., leadership and innovation. On the one hand, leadership is generally defined as influencing other people towards attaining a specified goal. The various categories of leadership include transactional, transformational, delegative, participative, and authoritarian. On the other hand, there are multiple characteristics of innovative leadership: risk tolerance, domain expertise, and low anxiety, among others illustrated above. There are five steps leaders can follow to become innovative, which include: putting away with the “best practice” notion, decision-making acceleration, and allowing members to run some initiates or solve problems, among others. Innovation refers to the processes a given organization utilizes to make changes to an already existing service or goods by introducing something new, which adds value. There are two kinds of innovation: value-added and exploratory innovation (Jansen et al., 2006). This paper aims to review the innovative leadership style as portrayed in the literature, and combining the two terms, and offering more insight and structural foundation for researching elements of innovative leadership. Therefore, this paper could provide a piece of excellent information to academics because they provide a starting point for further studies around this topic. Moreover, future studies should focus on examining the role of innovative leadership in achieving higher levels of individual and organizational innovation.

Cite this paper: Alharbi, I. (2021) Innovative Leadership: A Literature Review Paper. Open Journal of Leadership, 10, 214-229. doi: 10.4236/ojl.2021.103014.
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