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New report claims leadership is the key to innovation

We all know how vital creative thinkers, research scientists and product development engineers are for innovation. But according to a new report, when it comes to creating new products and services, business leaders play the most important role of all.

The report, Leadership for Innovation, was published by the Advanced Institute of Management Research (AIM) and supported by the Chartered Management Institute.

Deputy Director of AIM and one of the reports co-authors, Professor Andy Neely, said: "The importance of the leader's role in the innovation process is often underestimated. Acting as a kind of organisational architect, leaders can design structures and systems within their organisations that make the difference between innovation failure or success."

To be successful innovators, the report says, companies must learn three important leadership lessons:

* Leaders at every level of the organisation make innovation possible in two ways. As motivators they inspire employees to innovate. As organisational architects they create the context or environment in which innovation can occur.

* Innovation comes in different types. It can be incremental, through simple product modifications, or radical, such as creating a new product. It also goes through distinct stages: the exploration phase, where the creativity happens; and the exploitation phase where the commercialisation takes place. Each type and stage of innovation requires a different type of leadership.

* The way organisations develop, support and reward leaders must be tailored to the type and stage of innovation the leader is responsible for.

The report says that organisations that are best at innovation have a sophisticated understanding of the interaction between leadership and innovation. Those that are unwilling or unable to grasp the nature of this relationship will fail to meet the levels of organisational innovation necessary to compete in the modern business world.

"Employees respond to leaders who let them know that what they do is important and that it makes a difference. Leaders who can show trust, respect and appreciation are more likely to generate innovation across their organisation. This will also have a knock-on effect on performance levels and the ability to compete." says Petra Cook, Head of Policy at the Chartered Management Institute.

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Advanced Institute of Management Research (AIM)

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