DBA 951 Organizational Culture

Greasing the Wheels 1 Running head: GREASING THE WHEELS OF MANAGEMENT INNOVATION Greasing the Wheels of Management Innovation: The Role of Strategic Leadership Shelly McCallum College of Business Saint Mary’s University of Minnesota Winona, Minnesota and St. Ambrose University Davenport, Iowa & Tricia Behnke St. Ambrose University Davenport, Iowa

Greasing the Wheels 2 Abstract 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 management innovation. 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 Figure 1. ------------------ 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 & Rivera, 1992). 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 Practical Implications 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. Conclusion 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.

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Greasing the Wheels 14 Senge, P. (1990). The fifth discipline. New York: Doubleday. Stata, R. (1989). Organizational learning--The key to management innovation. Sloan Management Review, 30(3), 63-74. Stata, R. (2004). New ways to evaluate innovative ventures. MIT Sloan Management Review, 96. Vera, D., & Crossan, M. (2004). Strategic leadership and organizational learning. Academy of Management Review, 29(2), 222-240. Virany, B., & Tushman, M. (1986). Top management teams and corporate success in an emerging industry. Journal of Business Venturing, 1, 261-274. Yukl, G. (2006). Leadership in organizations (6th ed.). Upper Saddle River, NJ: Pearson Education. Zaccaro, S. J., Kemp, C., & Bader, P. (2004). Leader traits and attributes. In J. Antonakis, A. T. Cianciolo & R. J. Sternberg (Eds.), The nature of leadership (pp. 101-124). Thousand Oaks, CA: Sage.

Greasing the Wheels 15 Figure 1 Absorptive Capacity Adaptive Strategic Managerial Organizational Capacity Leadership Innovation Performance Managerial Wisdom

DBA 951 Organizational Culture

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DBA 951 Organizational Culture — Document Transcript