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The Leadership Required to Drive Innovation

By Sebastián Romo - Skala Ventures
Managing Partner

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By Sebastián Romo | Managing Partner - Thu, 06/01/2023 - 14:00

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In today's rapidly changing business landscape, nimble leadership has become more important than ever for organizations that want to stay competitive and drive innovation. Nimble leaders are those who are able to adapt quickly to changing circumstances and leverage new technologies and processes to drive efficiency and innovation. They are also able to foster a culture of support, psychological safety, creativity and experimentation, where new ideas are encouraged and failure is viewed as an opportunity to learn and grow.

But nimble could be a very short word to describe the different types of leaders companies require to be innovative and relevant in their industries. Just to start, I can recognize three types of nimble leaders who are particularly effective in driving innovation within an organization: agile, visionary, and empathetic leaders. Other types, such as democratic, collaborative and decentralized leaders, could be examples of good leadership practices in an innovative environment. 

Agile leaders are those who are able to adapt quickly to changing circumstances and respond rapidly to new opportunities and challenges. They are skilled at managing risk and uncertainty, and are able to navigate complex environments with ease. Agile leaders are also effective at creating a culture of experimentation and continuous improvement, where new ideas are encouraged and failure is viewed as an opportunity to learn and grow.

Visionary leaders are able to anticipate and create new trends and opportunities, and who are able to inspire and motivate their teams to pursue bold new ideas. They are skilled at identifying emerging market trends and technologies, and are able to leverage these insights to drive innovation within their organizations. Visionary leaders are also effective at creating a compelling vision for the future, and are able to inspire their teams to work toward that vision.

Empathetic leaders are able to connect with their teams on a deep emotional level, and who are able to understand and respond to their needs and concerns. They are skilled at creating a culture of trust and collaboration, where employees feel empowered to share their ideas and take risks. Empathetic leaders are also effective at creating a sense of purpose and meaning within their organizations, and are able to align their teams around a common goal or mission.

Sounds Great, But Where Do We Fail?

Despite the many benefits of nimble leadership and innovation, many companies struggle to embrace these qualities and drive innovation within their organizations. There are several challenges that companies face in this regard, including a lack of resources and expertise, resistance to change, and a fear of failure.

One of the main obstacles is resistance to change, as many companies prefer to maintain the status quo. Another issue, and probably the most common of all, is a lack of diversity, which can lead to groupthink and a narrow focus on conventional ideas. 

Additionally, risk aversion and short-term thinking make organizations unwilling to take the calculated risks that are necessary for innovation. Besides, some companies focus too much on short-term results and do not invest in the long-term development of their leaders and culture of innovation. Finally, inflexible structures and processes can also make it difficult for nimble leaders to adapt to changing circumstances.

How to Overcome Those Challenges?

To break down these barriers and drive innovation, companies can take several steps. First, they can invest in developing a culture of innovation that rewards experimentation and creativity, and that encourages employees to take risks and pursue bold new ideas. 

They can also invest in developing the skills and expertise of their leadership teams, through training and development programs that focus on agility, vision, and empathy. Focusing on empowering people to take decisions and drive innovation on their own. 

One effective way to drive innovation is to embrace emerging technologies and processes, such as agile development methodologies and digital transformation strategies. By leveraging these technologies and processes, companies can become more responsive to changing market conditions and customer needs, and can rapidly prototype and test new ideas.

Myth: Only Big Tech Can Afford to Do This

Innovation-focused leadership is not a luxury only big companies can afford. Here are three examples of (once small) innovative companies that focus on leadership and innovation:

Salud Digna is a Mexican company that operates a network of medical laboratories that offer affordable and accessible healthcare services to underserved communities in Mexico. The company's approach to innovation is centered around leveraging technology and process improvement to drive efficiency and expand access to healthcare services. Salud Digna has also invested in empowering their leadership teams. A decision that has led them to developing its own proprietary laboratory information management system (LIMS), which allows the company to process lab tests more quickly and accurately, reducing wait times for patients and improving the quality of care.

Chobani is a Greek yogurt company that disrupted the yogurt market with its innovative and unique products. The company's founder, Hamdi Ulukaya, is known for his visionary approach to business and his willingness to take risks. He has also developed a culture of empathy within the company, with a focus on giving back to the community and supporting employees. Chobani has been recognized for its innovative products and has won several awards for its leadership in sustainability and social responsibility.

Nubank is a Brazilian digital bank that has quickly become one of the largest financial institutions in Brazil. The company's CEO, David Vélez, has also fostered a culture of innovation within the company, with a focus on customer-centric design and technology. Nubank has disrupted the traditional banking industry in Brazil by offering a mobile-first banking experience with no fees or bureaucracy, aiming to democratize the Banking for everyone.

The Takeaways

I hope that as a leader, the key takeaway from this article is that nimble leadership is essential for driving innovation, adapting to change, and staying competitive in today's business landscape. 

To adopt the styles of leadership discussed in the article, you can start by developing a mindset that embraces experimentation, risk-taking, and continuous learning. You can also focus on developing your skills in agility, vision, and empathy, and invest in the training and development of your leadership team. Encourage diversity of thought and open communication, and create a culture of support, psychological safety, creativity, and experimentation, where new ideas are encouraged, and failure is viewed as an opportunity to learn and grow.

To overcome the challenges that hinder innovation, be willing to embrace emerging technologies and processes, and invest in developing a culture of innovation that rewards experimentation and creativity. Foster a sense of purpose and meaning within your organization, and align your team around a common goal or mission.

In summary, adopting a nimble leadership style requires a willingness to change, an emphasis on developing skills, fostering a culture of innovation, and embracing emerging technologies and processes. By doing so, you can drive innovation, adapt to change, and stay competitive in today's business landscape

Photo by:   Sebastián Romo

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