Greasing the Wheels 1
Running head: GREASING THE WHEELS OF MANAGEMENT INNOVATION
Greasing the Wheels of Management Innovation: The Role of Strategic Leadership
College of Business
Saint Mary’s University of Minnesota
St. Ambrose University
St. Ambrose University
Greasing the Wheels 2
The impact of strategic leadership on the performance of an organization is often debated. This
paper considers the contributions to be made by strategic leadership in fostering management
innovation, which in turn aids organizational performance. Three core components of strategic
leadership, adaptive capacity, absorptive capacity, and wisdom, are considered as to their
potential interaction with management innovation. Unlike other forms of innovation, technology
and product most notably, management innovation has been given less attention by researchers,
yet is recognized as a vital ingredient to organizational competitiveness. Propositions and
implications for practice are presented.
Greasing the Wheels 3
Greasing the Wheels of Management Innovation: The Role of Strategic Leadership
Today’s savvy customers expect superior value for their money. Indeed, Feigenbaum
and Feigenbaum (2005) state that “the continuous product and service innovation that is required
to meet such heightened customer value expectations must stem from a culture of systematic
management innovation, which in turn requires systematic leadership innovation” (p. 81).
Despite this assertion, the link between leadership and management innovation remains, in large
part, inadequately recognized, inadequately managed, and inadequately understood (Birkinshaw
& Mol, 2006). Most organizations have no formal method for promoting management
innovation (Hamel, 2006). Little academic research has been done on the relationship between
leadership and organizational innovation (Elenkov & Manev, 2005).
A few organizations still subscribe to the antiquated management belief that leadership is
little more than transporting ideas from the boss’s head to the employee’s hands (Feigenbaum &
Feigenbaum, 2005). While this is obviously a blinkered view of leadership, it must be
acknowledged that top management plays a key role in organizations, as established by the upper
echelons or strategic leadership perspective (Finkelstein & Hambrick, 1996; Hambrick & Mason,
1984). The practice of strategic leadership is viewed by some as a vital ingredient to an
organization’s ability to achieve and maintain competitiveness, and is identified as one of the
most critical organizational elements for study in the 21st century (Ireland & Hitt, 2005). As
organizations face significant challenges including globalization, technology advancement, rapid
pace of change, and external environment volatility, their leadership must become more
strategically adept in order to remain competitive (Ireland & Hitt). Through the creation and
maintenance of adaptive capacity, absorptive capacity, and managerial wisdom (Boal &
Hooijberg, 2000; Hunt, 2004), the strategic leadership process represents one way organizations
can become more strategically responsive. The strategic leadership process, since it involves the
unique combination of these components (adaptive capacity, absorptive capacity and managerial
wisdom), serves to veil itself, which in turn limits competitors from understanding the hows and
whys of the process (Ireland & Hitt). For this reason strategic leadership is considered to be a
key aspect in generating organizational competitiveness and sustained above-normal returns
(Boal & Hooijberg; Hunt; Ireland & Hitt).
One function of an organization that strategic leaders are considered to have great
influence upon is that of innovation (Elenkov & Manev, 2005; Hoffman & Hegarty, 1993).
Recognized as a powerful source of competitive advantage, innovation may drive advances in
such areas as technology, products, markets, and management (Elenkov & Manev; Hoffman &
Hegarty). Management innovation has come about through “the creative efforts of management
innovators” (Birkinshaw & Mol, 2006, p. 81). Some notable examples of recent management
innovations include reengineering, Keiretsu, benchmarking, and skunk works. Defined as “the
implementation of new management practices, processes and structures that represent a
significant departure from current norms,” management innovation serves to enhance the
organization as a whole and further its competitive stance (Birkinshaw & Mol, p. 81).
This paper sets out to explore the potential contributions of strategic leadership in
facilitating management innovation, as well as how those contributions can be most effectively
applied. To achieve this goal, relevant aspects of strategic leadership will be examined. Next
the concept and stages of management innovation as a vehicle that drives firm performance will
be reviewed. Propositions are presented considering the three core components of strategic
leadership and their possible impact upon management innovation. By considering the way
management innovation may be enhanced by leveraging specific strategic leadership process
Greasing the Wheels 4
elements at critical times in the innovation timeline, a more effective application of strategic
leadership may be realized. Lastly, practical implications will be discussed.
Strategic Leadership: The Grease
Some theorists argue that strategic leadership may have little impact on organizational
outcomes (DiMaggio & Powell, 1983; Hannan & Freeman, 1977), while others suggest just the
opposite (Cannella & Monroe, 1997; Finkelstein & Hambrick, 1996; Hambrick & Mason, 1984).
Yukl (2006) outlines the three dominant arguments that cast doubt on the impact of senior
leaders upon organizational performance. The first argument is that economic and market
conditions, technology developments, and legal restraints represent factors acting upon an
organization affecting its performance, forces which are all beyond the control of top managers.
The second argument draws attention to the powerful role that political coalitions, not top
managers, play in controlling what changes take place within an organization. The third
argument centers on leaders receiving more praise or blame for organizational gains and losses
than is really due to them.
Yet Boal and Hoijberg (2000) note that “current conventional wisdom suggests that in
aggregate strategic leadership does indeed matter” (p. 518). Support for strategic leadership’s
impact on organizational performance began with the upper echelons theory highlighting that the
strategic leadership of an organization serves to define the organization (Cannella, 2001;
Hambrick & Mason, 1984). In a review of empirical research findings by Virany and Tushman
(1986), Gupta and Govindarajan (1984), Murray (1989), and Haleblian and Finkelstein (1993),
Finkelstein and Hambrick (1996) highlight the research-based support linking strategic leaders
and organizational outcomes. Finkelstein and Hambrick caution that the latitude of action, or
discretion, afforded to strategic leaders does affect the degree of impact leaders can have on an
organization and its performance. They specifically note that factors including the
environment’s acceptance of change, willingness of the organization to pursue new approaches
and ideas, and the openness of the leader to envision new courses of action place boundaries
upon an organization’s leadership and its potential impact. To consider how strategic leadership
smoothes the running of an organization, we take a closer look into its nature.
Focused on the development of the organization as a whole, strategic leadership by
executives involves fostering learning, facilitating change, and practicing wise decision making
(Boal & Hooijberg, 2000; Hunt, 2004). This may be reflected in the actions of a single
executive, in the case of small sole proprietor company, or by a top management team in the case
of medium and large sized organizations (Hunt). Ireland and Hitt (2005) define strategic
leadership as “a person’s ability to anticipate, envision, maintain flexibility, think strategically,
and work with others to initiate changes that will create a viable future for the organization” (p.
63). This definition of strategic leadership plays out in the activities commonly associated with
the practice of designing and developing an organization’s vision, structure, processes and
controls, culture, human resources, leadership and ethical orientation (Boal & Hooijberg). Blair
and Rivera (1992) state that “top levels are involved with defining the mission, setting strategy,
and organizational design” (p. 84). Referencing Selznick (1957), Blair and Rivera also draw
attention to the role strategic leaders play in forming a company’s social structure and values. At
the heart of strategic leadership, as summarized by Boal and Hooijberg, are three elements (1)
adaptive capacity, (2) absorptive capacity, and (3) managerial wisdom.
An organization’s adaptive capacity (its ability to change) is also intricately linked to
organizational success. As today’s organizations operate in an environment that is highly
competitive, dynamic and unpredictable, significant pressure is being applied to organizations
Greasing the Wheels 5
and their strategic leadership to speed up their decision making, specifically in the areas of
strategy formulation and implementation (Hitt, Keats, & DeMarie, 1998; Ireland & Hitt, 2005).
Grant (2005) draws attention to three elements that facilitate organizational flexibility in times of
volatility and uncertainty. The first element involves the attentiveness of top management to
indicators of change within the external environment so as to be able to respond quickly. The
second is the ability of the organization and its employees to engage in experimentation and
leaning from their failures. The last element of flexibility highlighted by Grant is to remain open
to other options and selectively invest in new approaches such as technology. Managing the
strategic flexibility of an organization is the role of the top managers (Boal & Hooijberg, 2000).
In order for top leaders to promote flexibility and change within their organization they must be
flexible, adaptable, and open to change (Boal & Hooijberg).
Absorptive capacity (one’s ability to learn) “involves the capacity to recognize new
information, assimilate it, and apply it toward new ends”(Boal & Hooijberg, 2000, p. 517) A
concept originally presented by Cohen and Levinthal (1990), absorptive capacity is fostered by
the level of existing knowledge held within a firm that allows for effective discernment of the
value and usefulness of new information (exploration). In addition, the ability of an organization
to exploit newly acquired information is also a vital component of an organization’s absorptive
capacity (exploitation). For the leveraging of new information to take place, it must be shared
between individuals and groups and across the organization (Boal & Hooijberg; Vera & Crossan,
2004). Boal and Hooijberg emphasize that the absorptive capacity of strategic leaders is vital to
enhancing the organization’s absorptive capacity as they are in a position to maintain or change
the organization’s structure and information flows.
The third component of strategic leadership is managerial wisdom. Boal and Hooijberg
(2000) suggest that discernment, one’s ability to interpret and make sense of their environment
and its social context, is the core ingredient to managerial wisdom. Grant (2005) suggests that
the traditional role of top management as “the decision maker” has been usurped by the role
requirement of creating and maintaining the organization’s environment. This has come as a
result of the complex external environment putting pressure on organizations to have winning
strategy and effective organization structure (Grant). The social intelligence component of
managerial wisdom involves the leader’s ability to appreciate and understand their own as well
as others’ thoughts, feelings, and behaviors and respond appropriately (Zaccaro, Kemp, & Bader,
2004). Social intelligence capabilities include social awareness and acumen in concert with
response selection and enactment (Boal & Hooijberg; Zaccaro, Kemp, & Bader). Additionally,
links between self-monitoring, behavioral flexibility, and leadership effectiveness has been found
reinforcing the value of social intelligence skills (Zaccaro, Kemp, & Bader).
In addition to judgment and social intelligence, Kairos, meaning “the right time,” is also
recognized as an important aspect of strategic leadership wisdom (Bartunek & Necochea, 2000;
Hunt, 2004). Knowing what the needs are at the present moment while being mindful of longer
term consequences represents critical aspects of time and timing (Bartunek & Necochea).
Hence, for a strategic leader to demonstrate wisdom, they need to know when to act.
Boal and Hooijberg (2000) suggest taking a more bounded look at strategic leadership by
examining “what conditions, when, how, and on what criteria” potential contributions may be
realized (p. 518). In response, this paper considers the interaction of strategic leadership in
facilitating the management innovation process. Questions of how and when strategic leadership
may most effectively enhance management innovation will be explored. To fully examine the
Greasing the Wheels 6
impact of the “grease” of strategic leadership upon the vehicle of management innovation, the
concept and elements of management innovation are reviewed next.
Management Innovation: The Vehicle
The attention of strategic leaders is naturally drawn to the area of innovation as it is an
organization’s primary way to generate long-term competitive advantage (Hamel, 2007).
Management innovation has been recognized as generating some of the lasting effects on
organizations and their leaders. Birkinshaw and Mol (2006) define management innovation as
“the implementation of new management practices, processes and structures that represent a
significant departure from current norms” (p. 81). As Hamel (2006) writes, “put simply,
management innovation changes how managers do what they do” (pp. 75-76). It involves
reinventing the way management thinks and acts. It challenges current management orthodoxy
and introduces a novel principle, a different process or method, or system of processes/methods
(Hamel). Affected management processes could include project management, employee hiring,
assessment, and development, budgeting, strategic planning, knowledge management, and more
(Hamel). Some new management techniques introduced as the latest panacea to enhance
business performance are fads that quickly die out (Currie, 1999). Familiar management
innovations that have stood up well to the test of time include Total Quality Management
(TQM), Just-In-Time production management (JIT), and Activity Based Costing (ABC).
Usually, when innovation is discussed, it is product innovation, a new class of products
or improvements in the design or manufacture of existing products, which takes center stage
(Stata, 2004). Technological innovation, new technology or significant improvement in existing
technology, often gives rise to this product innovation. However, it has been posited that the
constraints of innovation have more to do with managerial capabilities than technological or
creative capabilities (Stata). Indeed, as Hamel (2007) writes, “management innovation is the
kind of innovation that matters most. . . . if we look back over the last 100 years, we see that
management innovation has produced the biggest and most enduring shifts in industry
leadership” (p. 5). Well-known management innovations include General Electric’s industrial
research laboratories, DuPont’s ROI calculations, Procter and Gamble’s brand management, and
Motorola’s Six Sigma. These management innovations (and others) have enabled the
aforementioned companies to distinguish themselves in their industries.
Management innovations have undeniably changed the face of business over the past
century. Early innovators like Frederick Taylor (scientific management), Alfred P. Sloan (M-
form) and Henry Ford (moving assembly line) were pioneers in a succession of visionaries like
W. Edwards Deming (total quality control) and Art Schneiderman (balanced scorecard). Of
course, these are the management innovations that make history. Not all do. A lot fail, a number
succeed, and a few catch on so well they take root and spread throughout organizations across
the globe (Birkinshaw & Mol, 2006). For each revolutionary idea that is rewarded with a
significant chunk of competitive advantage, there are hundreds of others that languish in the
planning stages, achieve only minimal implementation within a company, or prove not to be
valuable. But as Hamel (2006) states, “Innovation is always a numbers game; the more of it you
do, the better your chances of reaping a fat payoff” (p. 75).
Management innovation, according to the research of Birkinshaw, Crainer, and Mol
(2007), occurs in five stages. The first is dissatisfaction with the status quo. This can range from
a niggling day-to-day frustration to an all-out crisis. The second stage is inspiration from the
outside, where innovators draw from a diverse background of knowledge and external
experiences and apply it to their own situation in a new way. The third stage is invention. While
Greasing the Wheels 7
this may not necessarily be a single “eureka” moment, it is the product of the inspiration, the
novel idea or concept the innovator has created. The fourth stage is internal validation, an
important step where the innovation gains acceptance within the organization. The fifth and
final stage is external validation, “a stamp of approval from an independent observer, such as an
academic, a consultancy, or a media organization” (Birkinshaw, Crainer, & Mol, p. 65).
Hamel’s (2006) four elements of management innovation are similar to Birkinshaw,
Crainer, and Mol’s stages. He begins with commitment to a big management problem, which is
similar to dissatisfaction with the status quo—both recognize a need for change. The final three
elements—search for new principles, deconstruct current management orthodoxies, and exploit
analogies from atypical organizations are reminiscent of the inspiration and invention stages
described above. Both models attempt to introduce a systematic process to the concept of
New management innovations are being fashioned continuously in the workplace. Often
it is hard to trace the absolute root of these management innovations. Similar ideas spring up in
different organizations at the same time, new concepts are kneaded and molded by various teams
and individuals, and processes are abandoned, only to be picked up again a few years later and
re-energized with new life. By examining how strategic leadership can grease the wheels of
management innovation, organizations may be better equipped to leverage their hidden
innovation capabilities and realize increased competitiveness.
Greasing the Wheels
In today’s organizations, it doesn’t really matter who creates the new management
innovation. It only matters that management innovation happens, and that it enhances the
performance of the organization. Strong leadership by top management is required to ensure
companies today are “serial management innovators” with multiple successes and a culture that
supports the learning, change, and judgment necessary to effectively create/adopt and implement
new management innovations (Birkinshaw & Mol, 2006, p. 88). Management innovation can be
the vehicle that drives organizations to enjoy a sustainable competitive advantage (Elenkov &
Manev, 2005; Hoffman & Hegarty, 1993). Strategic leadership, with its focus on adaptive
capacity, absorptive capacity, and managerial wisdom can help grease the wheels of that vehicle.
In the following paragraphs we will explore strategic leadership and its three core components in
greater detail, and consider their relationship with management innovation, visually presented in
Insert Figure 1 about here
As introduced earlier, adaptive capacity, an integral component of strategic leadership, is
the ability to change. Change is necessary with any innovation, but especially salient to
management innovation. For management innovation to take place there must be an impetus for
discovering new ways of approaching management practices, processes, and structures. Shifts to
an organization’s strategy often involves innovation (Hoffman & Hegarty, 1993). And the
responsibility for leading strategic initiatives lies with an organization’s strategic leadership
(Hoffman & Hegarty). It is a difficult charge, as management is most often thought of as a
mechanism to keep business humming along, business as usual (Birkinshaw, Crainer, & Mol,
2007). As a result, any change disrupts this even flow. However, strategic leadership is being
challenged today by having to respond to the heightened competition, volatility, and uncertainty
of the external environment (Boal & Hooijberg, 2000). A smooth road is a comfortable one, but
Greasing the Wheels 8
seldom leads to thunderous results. But change is necessary to obtain different results, which
includes growth; senior executives need to break from the mindset that bump-free operation is
good management. Old ways that have ceased to have value must be jettisoned to create new
ways for the future (Birkinshaw, Crainer, & Mol). Inevitably, this requires change.
Change begins with dissatisfaction with the status quo (Birkinshaw & Mol, 2006). This
uneasiness may range from a troublesome operational problem to an awaiting crisis. Ireland and
Hitt (2005) emphasize the need for strategic leaders to possess “mental agility, firm flexibility,
speed, innovation, and globalized strategic thinking” to be able to meet the demands of the new
competitive environment (p. 64). Therefore, senior managers play a vital role in building
flexibility within the organization (Boal & Hooijberg, 2000). Senior managers must have their
eyes open and their ears to the ground, alert for strategic problems on the horizon, but also aware
of the niggling difficulties which frustrate efficient day-to-day operations. To do so, they must
be able to frame the impediments that organizations face, big or small, as challenges to be
overcome through change. Top management develops this vision of the changed state and
communicates it throughout the organization as the management innovation is implemented.
Strategic leadership must mobilize those within the organization to engage in behaviors that will
result in new thinking and approaches to success (Ireland & Hitt). Ultimately top executives fuel
the momentum for the change, championing the innovation forward through a supportive
coalition of key influencers in the organization (Hoffman & Hegarty, 1993). If lacking hard data
that the management innovation is working, senior executives can obtain external validation
(academics, consulting organizations, management gurus) to increase the level of internal
acceptance for the change (Birkinshaw & Mol). Therefore, strategic leadership through its use
and encouragement of adaptive capacity can foster management innovation.
Proposition 1: Strategic leadership, through its development and use of adaptive
capacity, will foster management innovation.
A second important element of strategic leadership, absorptive capacity, is the ability to
learn. Learning is integral to management innovation. Practically speaking, one of the biggest
obstacles to management innovation is acquiring a truly unique concept (Hamel, 2006). A
culture of organizational learning can help overcome this barrier (Stata, 1989). For an
organization to develop its ability to learn, it must foster learning to take place. Providing
opportunities for experimentation, encouraging double-loop learning, and tolerating failure are
recognized as important facilitators of learning (Boal & Hooijberg, 2000). In addition, managing
an organizational context that supports organizational learning through balancing “novelty and
continuity” is also critical (Vera & Crossan, 2004, p. 224). The work of the strategic leader can
influence the processes that support and encourage organizational learning (Vera & Crossan).
Ireland and Hitt (2005) emphasize how important strategic leadership is due to the changing
nature of the competitive environment as organizations become more reliant on their ability to
build, share and leverage knowledge as a source of competitive advantage. Drawing from open
systems theory, it is recognized that organizations need to receive resources from their
environment in order to evolve their systems and processes (Scott, 2003). Strategic leadership
addresses this by working to manage the organization’s relationship with its environment as well
as facilitate the internal flow of those resources captured from its external environment (Blair &
Top management sets the tone for an atmosphere of creative thinking and problem
solving. By supporting employee growth and development, encouraging cross-functional
training, and promoting unconventional thinking that challenge the status quo, management can
Greasing the Wheels 9
unleash employee inspiration. Sources of learning for senior management themselves can
include diverse assignments in foreign countries or different functional areas, inspiration from
apparently dissimilar sources like non-profit organizations or clubs, and benchmarking
management innovations in other companies, even those in unrelated industries (Birkinshaw &
Mol, 2006). Learning leads to inspiration from other sources, followed by invention, stages two
and three in Birkinshaw and Mol’s management innovation process. By strategic leadership’s
practice of learning along with support and promotion of learning throughout the organization,
management innovation will be enhanced.
Proposition 2: Strategic leadership, through its development and use of absorptive
capacity, will foster management innovation.
Managerial wisdom is the ability to understand the environment and the relationship of
actors within it, and to act appropriately (Hunt, 2004). Rowley (2006) proposes that wisdom is
rooted in action, exhibited in the “sophisticated and sensitive use of knowledge,” and represented
in one’s ability to exercise judgment that incorporates many perspectives (p. 1250). Put simply,
wisdom is “knowing why, what, and how to do something” (Rowley, p. 1250). It encompasses
good judgment—doing the right thing at the right time due to experience and intuition. Malan
and Kraiger (1998) suggest managerial wisdom is the “the ability to distinguish between fine
grades of variation in observations” (p. 243). They state further that wisdom is exercised
through one’s ability to capture and integrate various items of meaning, learn from them, and
then act accordingly.
Managerial wisdom is fundamental to management innovation. Top managers must be
able to actively scan their surroundings, alert to threats and opportunities. Using accumulated
knowledge and well-honed skills, they must be able to discern what changes are necessary within
their organization. They must know what management innovations already exist in the market,
and ascertain which would be most helpful to adopt, in a current or revised form. Ultimately, top
management commitment is vital for any innovation to be implemented, and senior managers
decide which projects they back, and which die. Having a sense of timing (Kairos) for when
such initiatives should be encouraged, backed, and promoted, is a vital ingredient to managerial
wisdom (Hunt, 2004).
When the change agent (person or teams who originate the management innovation) is
internal, often innovation is an isolated activity (Hamel & Prahalad, 1989). It is therefore up to
top management to link the change agent with the implementers and beneficiaries of the change
and move them all toward the same strategic goal. While the change agent (an academic,
consultant, management guru, etc.) him/herself is often external to the company, the decision of
who to hire and how to communicate the vision of the change falls to senior management
(Birkinshaw & Mol, 2006). The mantle of responsibility rests on their shoulders, and they must
display courage and acumen to boldly move forward with changes that may (especially initially)
be unpopular. Management innovations are more tacit and ambiguous than technological and
product innovations, which can be more easily codified (Birkinshaw & Mol). As a result, it is
more difficult to justify the implementation of management innovations than technology
innovations, and harder to evaluate them afterwards. This makes the role of a wise top manager
even more imperative. Strategic leadership through its active practice of managerial wisdom will
foster managerial innovation.
Proposition 3: Strategic leadership, through its practice of managerial wisdom, will
foster management innovation.
Greasing the Wheels 10
Challenging a deeply rooted management ritual with a novel concept requires persistence,
top management support, and clear communication throughout all levels of the organization.
There are likely to be many false starts and detours on the journey (Hamel, 2006). Top
management can use strategic leadership principles to make the ride smoother.
Cultivating a culture of organizational learning, where employees feel free to question
established methods, is essential (Stata, 1989). Employees should be encouraged to look beyond
the easy answers, to examine the unknown, without fear of reprimand (Birkinshaw & Mol,
2006). Through integrating reason and intuition, recognizing one’s connectedness to the world,
possessing compassion, and remaining committed to a vision that involves the whole
organization, top managers can achieve a higher level of learning—personal mastery (Senge,
1990). They should possess a thorough understanding of the processes within their own
organization—who owns each one, how they link to each other, and what the success metrics are
for each (Hamel, 2006). Such initiatives would require an investment of time and money in
support of appropriate training and development initiatives (e.g., in-class training, active
learning, coaching) as well as opportunities to network and learn from others both within and
external to the organization.
Based on the apparent relationship between strategic leadership and management
innovation, we suggest top management must understand the need for change and communicate
it downstream in a way that lessens anxiety and heightens enthusiasm for the vision. Another
recommendation would be for senior managers to constantly scan their environment for fresh
insights, making new connections between apparently dissimilar concepts, and do their
homework on trends and developments to be able to time their initiatives correctly. They should
become proponents for change, setting up a formal methodology to consciously foster
management innovation on a continuous basis (Birkinshaw & Mol, 2006; Hamel, 2007).
However, organizations need to be careful not to lose good employees that may initially be risk
adverse and self select out of the organization. In addition, a myopic focus on innovation may
result in the organization losing sight of current day needs and issues or not recognizing the
decreasing utility of change initiatives. Engaging in change for change’s sake can also result in
discarding valuable processes and structures.
Managerial wisdom, honed by long experience and intellect, is necessary to understand
the anticipated returns of a potential management innovation and know which ones to back and
which ones to drop. Not all management innovation ideas are winners. With time and resources
scarce, top managers have little room for errors of judgment. Yet an organization’s role in
fostering managerial wisdom can be costly. Helping managers to accumulate experience across a
wide spectrum may involve job rotation, travel, training, or participation in other organizations,
all of which cost money and take time.
These suggestions are, of course, contingent on support of the propositions above
regarding strategic leadership principles sustaining management innovation. These propositions
require empirical testing. As management innovation is recognized to be “a more diffuse and
gradual process” than other forms of innovation, a longitudinal study design may be most
appropriate (Birkinshaw & Mol, 2006, p. 82). However, we believe the concepts of strategic
leadership and management innovation complement each other well, and an association between
them is natural and intuitive. Other organizational aspects, not considered here, may affect the
relationship. These factors include, but are not limited to: CEO traits and characteristics, size,
Greasing the Wheels 11
stage in organizational life cycle, and industry. Understanding the impact of these characteristics
involves further study.
Serial management innovation is what sets great companies apart from good companies.
Technology and product innovation can deliver small gains, but history shows that radical
management process advances produce long-lasting competitiveness (Feigenbaum &
Feigenbaum, 2005; Hamel, 2007). A strategic leadership perspective, through its promotion of
absorptive capacity, adaptive capacity, and managerial wisdom, can help grease the wheels of
management innovation within companies. Further investigation and empirical research are
necessary to refine our understanding of the relationship between these two powerful concepts.
Today’s leaders face intense global competition and daunting new challenges as their
organizations struggle to survive in a fast-paced business environment. As Hamel states, “these
problems demand solutions that only emerge when leaders learn to innovate as boldly around
their management systems and processes as they do around their products, services, and
strategies” (Hamel, 2007, p. 5). Their success or failure hinges on their ability to learn, change,
and exercise superior judgment. Top managers who can embody these strategic leadership
qualities and permeate them throughout their corporate cultures stand to drive enduring success
through management innovation.
Greasing the Wheels 12
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