The Importance of Leadership

‘The enterprise that does not innovate ages and declines. And in a period of rapid change such as the present, the decline will be fast’

Peter Drucker – Austrian-born American management consultant, educator, and author.

To remain competitive and grow, innovation, not just technological advancements, is a challenge for all CEOs/Managing Directors. Probably even more so for leaders of smaller businesses, who face the challenge of limited awareness of the resources and strategies available to help them.

The good news is, like all business disciplines, innovation skill can be learned, practiced, and mastered. When supplemented with AI, the journey can be accelerated. In this context, innovation becomes a leadership challenge. So, why is this a leadership challenge?

Leadership is the skill that creates the environment that fosters confidence, collaboration, and curiosity. This allows critical and “out of the box” thinking that drives differentiation and growth. But this requires a shift in mindset within the management team.

The leaders decide what investments are needed for the company to progress. Creating an environment that fosters curiosity, critical thinking and innovative approaches requires investment, not just in financial term, but in the emotional domain and in a culture of openness allowing the massive asset of the “Human Computer” to thrive.

Establishing a culture of innovation and creativity requires the leadership to define several objective and key results (OKRs). While this might seem obvious to some, it should not be ignored. In our opinion, the most important factor is creating an environment where your team feels comfortable expressing ideas, opinions, and feedback without fear of criticism or failure. Seeing failure as a learning opportunity rather than as a setback is crucial, and requires the greatest change in behaviour from leaders. Only then can your team venture into the unknown and take calculated risks that will drive innovation. This may be obvious for some, but unconceivable to others.

The fundamental idea is to establish a continuous innovation funnel, leveraging not only the leadership team but your entire workforce. It can only be achieved through a practical and flexible approach that aligns with your organisation’s scale and resources. The success of this funnel relies on the “create, test and fail fast” concept. This concept is often associated with various agile methodologies and frameworks, for example SAFe, LeSS, DAD, the Lean Startup methodology, Design Thinking and others.

The essence is to quickly create a prototype or a minimum viable product (MVP) and test it in real world conditions, whether internally or externally. The feedback gathered through Key Performance Indicators (KPI) informs the decision process. If necessary, a prompt decision to fail is made when the concept is not viable, is not gaining traction or is not solving the intended problem. As in any funnel, you may have to try multiple time before identifying the innovation that makes a difference, signifying a transformative leap rather than an incremental change.

You might ask yourself, isn’t this expensive, that does not apply to my business and what does it have to do with AI?

Let’s address the elephant in the room – every investment is costly until a return of investment is delivered. The methodologies highlighted earlier, and there are certainly others, aim to maximise the number of opportunities within a fixed investment. With the view that at least one opportunity will deliver the transformative change, propelling the business towards greater success. As someone said ”Innovation is a risky business, but not innovating is even riskier”.

Innovation does not always have to be grandiose or ground-breaking! It can simply be new or improved methods of doing things. For instance, integrating “intelligent” task automation in your business, like automating social media posting and engagement across various platforms, can streamline operations and have a direct impact on your bottom line.

So, what about AI? The first thing that comes to mind is AI-related learning. AI serves as a valuable support system for continuous learning. It can also function as a sounding board for your team to refine their ideas. This is referred to as an AI-enhanced workforce.

The second dimension is that AI can aid in managing operational-level risks and assist in establishing and monitoring thresholds. These allow managers to step back without fear of losing control, allowing the team to pursue innovation. Involving your team in this process is a key success factor in building trust.

Several strategies are available to leaders to build trust that fosters innovation, such as open communication, consistency and predictability in their action and decision-making, recognition and appreciation, collaboration and many others. Trust is an on-going process requiring time, commitment and effort for the well-being and success of your team before it can flourish. Management 3.0, an innovative management approach and leadership philosophy centred around principles and practices designed to empower and engage employees in the workplace, provides a valuable foundation to consult for leaders considering embarking on this journey.

Last but not least, it is essential to establish a balance by defining thresholds that allow continuous innovation without hampering current operations. Under these conditions, human experience is irreplaceable.

Finally, AI can help with the data interpretation of results and ultimately speed up the decision-making process of success or failure. Today’s AI is vastly superior to humans in the domains of data compilation and trend analysis, enabling faster human interpretation and decision-making.

Harnessing AI’s capabilities is imperative to avoid lagging behind in the ever-evolving business landscape. Other factors contribute to creating a positive working environment, such as diversity and inclusion, empowerment, empathy and understanding, and many others. None of these are of less importance and must be considered when setting up your business on this journey.

Key Takeaway:

Collaborating with an expert partner who has experience of setting up such positive working environments, and developing both the team, as well as the management, is a start in embracing the right attitude towards these various challenges, is the paramount of ensuring a successful path.

For a free, no obligation discussion about how you can integrate A.I into your business in a cost effective and beneficial manner, contact us on 0116 232 5231 or get in touch with us at

Remember we specialise in growing businesses!! You have nothing to lose and a lot to gain!

The Tinderbox Team

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