The answer to this question is not yes or no, but it depends! Below I will explain some factors that can help you understand how participative leadership and delegation will help you increase your organization’s innovative performance.
Innovation can happen in many areas, but we mainly address five types of innovation. The most common types of innovation referred to is product innovation and process innovations. However, also organizational innovation, environmental innovation and market innovations can give substantial benefits for an organization. The problem is how to best organize your business for innovation to happen?
A lot of theorists in the field claim that delegation and participative leadership are crucial for innovation as employees involvement improves total contribution to to the outcome. This is often based on the view that sub-ordinates are closer to the areas where innovation improves performance and sooner will detect needs for change. However, the level of situational control at work can stop them from taking action and making improvements. If this happens, the organization fails to take advantage of its richest source of information and knowledge generation that will improve future innovative performance. However, by empowering employees, the organization can enter a positive cycle of increasing innovative performance.
A study by Gebert, Boerner and Lanwehr from 2004 shows that unless certain conditions are in place (employee orientation, consideration and trust), delegation and employee empowerment can actually lower a company’s innovative performance as it can lead to an overload of sub-optimal solutions, too much time spent on exploration rather than exploitation (see previous blog posts) and sub-ordinate conflicts. This can lead to a negative cycle of innovation and initiative in the organization, impacting both culture and organization environment.
Consistent with the study above Adler, Goldof and Levine (1999) examined factors that made New United Motor Manufacturing Inc (NUMMI) by far outperform competitior in the car industry. The study highlighted at least three contextual factors; trust, training and goal-congruence as crucial to improve the innovative capability of a company and create a virtuous cycle of innovation.
It is essential that the organization have a high level of trust for delegation to work at all. Trust can include both the trust of subordinate’s willingness to do the right thing and competence to be able to do the right thing. Trust should not be “good-will” trust, but be fair and just. By trusting the employees they become the heart of the operation. However, it is also important that sub-ordinates can trust their bosses and management. Only then can they dare to take initiative for innovative solutions.
Closely related to trust is training, because only be training can employees develop competence to efficiently explore innovation. When and how to explore innovative solutions should be built into company policies, for example by creating innovative project groups or allow a certain percent of work-time for exploring new solutions. By training the management can be confident that employees have the tools they need to efficiently develop the organization.
Employees and management must have the same objectives for the organization to efficiently perform their roles at work. In the study of NUMMI, this was done by management making policies “as if” they were acting in the employees’ best interests. This included a non-lay-off policy, strong union collaboration and fair treatment of employee requests. If proved far more efficient to be a bit generous and create goal-congruence than to constantly make decisions based on the small margins.
Of course, there can be many other contextual factors both general and specific to your organization that will influence the innovative environment. Contextual factors work at a personal level and therefore can vary fron one sub-ordinate to another. It is most important that you create a culture of innovation where the above elements should be central. This is critical for the long-term success of any company.
For more information about innovation at google, click here or see Google’s nine rules of innovation here! For more general information about the success of Toyota innovation management, check this out!