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5 Critical Skills Innovative Leaders Share

In today’s knowledge economy, innovation is critical. From driving growth to finding new methods to deliver value to new customers, U.S. companies spend $145 Billion dollars on R&D each year according to a global study by PwC on Global Innovation. In a separate study, CEOs ranked “human capital” and “innovation” as the top two long-term challenges to drive growth. This is a critical talent challenge for most organizations and a talent gap that needs to be closed, starting from the top, with the role of the CEO or the business owner.

XBInsight has collected competency data on nearly 5,000 leaders across a variety of industries. The data was analyzed to determine key competencies that innovative leaders have in common and their corresponding behaviors. Every CEO or business owner should be cultivating these behaviors to maximize innovative thinking.

Risk Management

Innovative leaders had scores 25% higher than non-competitive ones when it came to managing risk. It did not mean that they were irresponsible when potentially adverse consequences could be expected. When risks do present themselves, innovative leaders develop plans to mitigate the risk and determine where it is needed most.

A few things that CEOs can work on to develop better risk management behaviors are:

– Identify, document and plan for risks as an integral part of developing strategic alternatives

– Instead of thinking things through thoroughly in advance, shift your focus towards starting without all the answers. You can adjust as you uncover new information as you go along.

– Avoid overthinking decisions. Give yourself a time limit to analyze a situation then make a decision.

– Stop to think of the potential downside risk of each decision. If you can live with the consequences, move forward.

Demonstrate Curiosity

Innovative leaders exhibit an underlying curiosity and desire to know more. They will actively take the initiative to learn new information which shows engagement and loyalty to the businesses goals. They gain a competitive edge by keeping their knowledge and skills current. It also stimulates new ways of thinking in others around them.

A few things that CEOs can work on to develop and demonstrate curiosity are:

– Evaluate current knowledge. Study how the knowledge base will help to achieve the long-range goals. Identify other skills and knowledge that can contribute to moving you in that direction.

– Learn from your mistakes. Errors should make us look inward and study our behavior patterns. By recognizing and correcting behaviors, that repeatedly result in mistakes; we can modify and avoid these in the future.

– Make time for skill development. Take classes or participate in workshops.

Lead Courageously

Innovative leaders lead with confidence and authority and are proactive. To them, tough circumstances are prime opportunities to demonstrate decisiveness and take responsibility for the difficult decisions they make. They make sure they engage and maintain their audiences’ attention in meetings when a lot is at stake, and they do not shy away from differences of opinion or conflict.

To develop courageous leadership, CEOs need to grow in the following behaviors:

– Consider alternatives when faced with tough decisions. Identify risks and be prepared to deal with other people’s reactions.

– There is a clear distinction between being assertive and being aggressive. The trick is to share your views, not impose them. An assertive leader is effective by showing respect to others and finding win-win solutions.

– Search for and recognize leadership skills in others.

Seize Opportunities

When it comes to seizing opportunities, innovative leaders scored higher. These CEOs foresee pitfalls or obstacles without over-analyzing a situation. They can work on their own, with minimal support, for extended periods of time. They are flexible and able to change directions quickly as new opportunities arise.

To become more adept at seizing opportunities, CEOs can:

– Look at opportunities you have declined in the past. What was a common element? Why didn’t you move forward on them?

– Ask valued employees for input, make it a collaborative effort. Their perspective might avoid potential pitfalls you might have missed.

– Find advantages in changing situations or new developments as they come up.

Maintaining Business Perspective is Key

The research showed that innovative leaders demonstrate a keen understanding of trends within their industry and their impact on their organizations. They have an in-depth knowledge of the market, the business, and their customers. By continuously assessing threats and opportunities within their business, they can lay a strategy to move the business forward.

To develop a strategic business perspective, CEO’s need to:

– Regularly perform SWOT analysis.

– Actively create learning opportunities around strategic areas of the firm (target market buying behaviors, potential cost saving manufacturing technologies to mention a couple).

– Involve people from different functional areas of the company in the strategic planning process.

– Identify a long-term strategy. Analyze areas of success and how they could apply to future trends.

Developing Leadership Skills

So how do you know what your leadership style is? How can you tell if you are innovative based on the traits described? Determining if you are an innovative leader can be tricky. Employees will never provide an accurate analysis of your leadership skills, as their highest priority is job preservation. It is best to utilize an outside source, such as a business coach or board of peers, to help you identify specific areas of improvement.

A Peer Board consists of local business leaders who work together to find solutions to business problems. Their combined experience, insight, and wisdom not only provides you with objective advice, it also allows you to draw from their successes and failures to make the best possible decision. If you are not an innovative leader now, a board of peers will help you identify the skills required to become an innovative leader, build the skills you may be lacking, and strengthen those you currently possess. If you are an innovative leader, then membership in one of these groups will allow you to share advice with others, make important business connections, and further develop your leadership skills.