SAW8 - ITECH7401 - GN44899 - Journal.pdf
Journal of Innovation Management Kesting, Ulhøi, Song, Niu
JIM 3, 4 (2015) 22-41
HANDLE: http://hdl.handle.net/10216/81805
ISSN 2183-0606
http://www.open-jim.org
http://creativecommons.org/licenses/by/3.0 22
The impact of leadership styles on innovation
management - a review and a synthesis
Peter Kesting1, John P. Ulhøi1, Lynda Jiwen Song2, Hongyi Niu3
1 Department of Business Administration, Aarhus University, Aarhus, Denmark
Bartholins Allé 10, 8000 Aarhus C, Denmark, Tel: +45 87164965
{petk, jpu}@badm.au.dk,
2 School of Business, Renmin University of China
[email protected]
3 Martin Bencher Professional Shipping and Forwarding Services
[email protected]
Abstract. This paper reviews the insights that research offers on the impact of
different leadership styles on innovation management. To do so, we develop a
framework structuring existing insights into four generic dimensions: people,
means, effects, and goals. Based on this framework, we review studies on:
directive and participative leadership, interactive leadership, charismatic
leadership, transformational leadership, transactional & instrumental leadership,
strategic & CEO leadership, and shared & distributed leadership. We find strong
indications that different innovation stages and types raise different demands on
leadership. Against this background, transformational leadership is not the only
style to lead innovations, but different leadership styles fit differently well with
different innovation types and stages. However, the specification of this fit is still
very incomplete and the answer to the question of how to lead innovations
remains sketchy. Before closing, future research needs as well as practical
implications are addressed.
Keywords: Leadership styles, Innovation, Leadership, Transformational
Leadership
1 Introduction
There are strong indications that leadership is important for innovation management
(Nadler and Tushman, 1990; Denti and Hemlin, 2012). Leadership plays a decisive role
in enhancing organizational creativity (Mumford et al., 2002; Amabile et al., 2004),
launching and driving innovation projects (Stoker et al., 2001; Bossink, 2007), and
implementing innovation projects and overcoming resistance (Gilley et al., 2008).
Somech (2006) concludes that corporate leaders are the key drivers, who either promote
or inhibit innovation management in the organization. According to Bel (2010),
different leadership styles are likely to have different impacts on employee involvement
and commitment, which in turn influence the climate for innovation management.
Deschamps (2005) goes even further, saying that the failure of innovation projects is
most likely due to ineffective leadership skills (see also Bass 1990b).
Against this background, it is hardly surprising that a large number of publications have
Journal of Innovation Management Kesting, Ulhøi, Song, Niu
JIM 3, 4 (2015) 22-41
http://www.open-jim.org 23
already addressed various aspects of the relation between leadership and innovation
management (Rickards and Moger, 2006). Since sketching the relationship between
leadership and innovation in general is too complex a topic for a single paper, the focus
of this review is exclusively on leadership styles with regard to innovation
management. The main advantage of focusing on leadership styles is that they are
representative of different lines of thought and comprehensive at the same time. Of the
different leadership styles that have been identified and described over the years, we
will only focus on those that have already established significant links to innovation
management. Relevant contributions can be both, conceptual or empirical. What counts
is that they explicitly and substantially contribute to the knowledge about the links
between a certain leadership style and innovation management. In this paper, we will
review how these links have been conceptualized and look at available empirical
evidence.
We do not believe that a mere survey of peer-reviewed journal articles gives an accurate
picture of the relevant research body, therefore scholarly essay collections and
monographs are also included. Specifically, an initial search has been grounded on the
authors’ previous knowledge of the field as well as on a systematic search in the
database: “Business Source Complete – EBSCOhost”. The terms used for the search
did not only include the generic terms “leadership” and “innovation”, but also related
terms like “manager”, “change agents”, “champions”, “change” and “transformation”
(a detailed account of all used keywords and the number of hits can be obtained from
the authors). However, to get a more comprehensive picture of the research body we
also included publications referenced by reviewed articles. Additionally we followed
up the forward citations (“cited by”) of some key publications in Google Scholar.
2 Key constructs
2.1 Leadership
According to the definition of Bass (1990a: 19), “leadership consists of influencing the
attitudes and behaviors of individuals and the interaction within and between groups
for the purpose of achieving goals.” Chemers (1997) defines leadership as “a process
of social influence in which one person is able to enlist the aid and support of others in
the accomplishment of a common task.” Because of their general acceptance among
scholars, we have taken these definitions as a conceptual foundation for this review.
They imply the existence of four generic dimensions in leadership:
People – By its very nature, leadership is a supra-individual concept that requires a
logical distinction between leaders and followers. This distinction can be explicit or
implicit, temporary or persistent, but without it, leadership is pointless.
Means – The essence of leadership is that leaders lead, i.e. they carry out certain
activities in order to direct or influence followers. The review below will show that
these means can include very heterogeneous activities like coaching, empowering, or
even servicing. But without such activities there is no leadership.
Effects – The effect of leading is to induce a certain reaction in the followers, i.e. to
make them follow. The review will show that the effects can include very
Journal of Innovation Management Kesting, Ulhøi, Song, Niu
JIM 3, 4 (2015) 22-41
http://www.open-jim.org 24
heterogeneous reactions, like increased enthusiasm or commitment, implicit
convictions, the rational optimization of rewards, etc. But without any effect,
leadership efforts go nowhere.
Goals – Leadership is ultimately associated with certain goals. These goals can be broad
visions of promising future states, but they can also be very concrete targets. In either
case, leadership points towards a direction. In the context of this paper, goals are
essential as leadership here is always directed towards the goal of innovation – this is
what this review is about.
The four dimensions (people, means, effects and goals) allow for systematizing the
review of the specific leadership styles as they organize logical distinct elements in a
consistent way. This allows for creating a systematic and stringent overall analytical
framework, making it much easier to compare across leadership styles with regard to
the 'essence' of leadership (i.e. the four dimensions). To our knowledge, the “people-
means-effects-goals framework” has not been used by other researchers so far.
According to House and Aditya (1997: 451), the term of leadership styles refers “to the
manner by which leaders express specific behaviors.” Leadership styles are important,
since they represent different ways of practicing leadership. In relation to this, the traits
of leaders reflect the ability of individuals to practice specific leadership styles.
Contextual factors shape the conditions for different leadership styles, specifically the
effects they have and the goals that they serve. Therefore, contextual factors cannot
simply be added as a “fifth dimension” to the framework; instead, the framework is
only valid with respect to specific contextual factors. Against this background, the
differences in leadership styles can be specified in terms of the four key dimensions of
the “people-means-effects-goals framework”. That not all key dimensions have been
specified with regard to a specific leadership style does not mean that they do not exist,
only that the research is incomplete.
Although there are several constructs closely related to leadership, lack of space means
that the discussion of this relationship remains very short. While there have been
countless discussions about the relation between leadership and management (Yukl,
1989; Kelley and Lee, 2010), the essence of leadership is that it includes both formal
and informal authority, and that it has a very strong focus on the (new) goals to be
achieved. Management research is included inasmuch as it meets these criteria. The
same applies for other related constructs like change agents (Nikolaou et al., 2007),
champions (Howell and Higgins, 1990), etc.
2.2 Innovation
There are perhaps at least as many definitions of innovation management as there are
of leadership. According to a rather broad definition by Baregheh et al. (2009: 1334),
“Innovation is the multi-stage process whereby organizations transform ideas into
improved products, service or processes, in order to advance, compete and differentiate
themselves successfully in their marketplace.” Amabile et al. (1996: 1155) understand
innovation management as the “successful implementation of creative ideas within an
organization.” Creativity is therefore a necessary, but not sufficient, condition for
innovation (Amabile et al., 2004). However, we know of no conceptualization that does
not qualify innovation as a kind of change. Therefore, change is broadly understood as
Journal of Innovation Management Kesting, Ulhøi, Song, Niu
JIM 3, 4 (2015) 22-41
http://www.open-jim.org 25
the genus of innovation, and innovation is broadly understood as a subset of change
(there is no innovation without change). Differences in the conceptualization of
innovation result from different specifications of change (the differentia) with regard
to substance (what is the subject of change) and impact (what types of change count as
innovation). Since leadership and innovation are too broad concepts to be addressed in
one review paper, we limit our focus on research contributions investigating the effects
of different leadership practices (leadership styles) on innovation processes (innovation
management).
It is generally assumed (and this is important for this review) that innovations are
typically complex procedures, consisting of a variety of different activities. One
classical approach to structure this complexity is the distinction between different
innovation stages or phases, like the distinction between ideation and implementation
(Amabile et al., 1996; Anderson et al. 2004) or the distinction between
conceptualization, development, and commercialization (Stemberg, Kaufman and
Pretz, 2004). Creativity is typically seen as an element of the ideation or
conceptualization stage and the impact of different leadership styles on creativity is
therefore included in this review, but only inasmuch as it relates to innovation (and
limited to insights that research offers on leadership). Another classical distinction is
that between different innovation types with regard to substance (for instance: product,
process, organizational, and market innovation, Schumpeter 1934) and impact (for
instance: radical and incremental innovation, Dosi 1982). Also more specific elements
of the innovation process have been distinguished, like R&D, resistance and path
dependence, creativity, task completion, and others.
These distinctions are relevant for this review because there are strong indications that
different activities make different demands on leadership (Nijstad and de Dreu, 2002;
Anderson et al., 2004; Gilley A. et al., 2008, see also the review below). This has an
important impact on goal setting. With regard to leadership, it is not sufficient to specify
the goal as being merely “innovation” as such, but it is necessary to distinguish between
different stages, types and specific elements that are functionally related to innovation.
We argue that leadership styles are relative to these more specific innovation aspects.
The question is then how different leadership styles contribute to the achievement of
these more specific, innovation-related goals.
3 Leadership styles and innovation
This section reviews the insights produced by research into different leadership styles
with regard to innovation management. Among the different leadership styles available
in the literature, we have selected only those who make substantial contributions, and
are thus already related to innovation management. We review each style separately
and focus on the insights with regard to the four key dimensions: people, means, effects,
and goals. Here, we proceed as follows: People – most of the contributions do not make
people an issue and many implicitly assume that there is only one leader. We have only
included research that explicitly addresses this issue. Means – we have reviewed
insights into how leaders are supposed to act (conceptually) and also how they actually
practice leadership (empirically). Effects - we have reviewed empirical insights into the
effects of the different leadership styles on followers. Goals – we have reviewed
Journal of Innovation Management Kesting, Ulhøi, Song, Niu
JIM 3, 4 (2015) 22-41
http://www.open-jim.org 26
empirical indications for the support of innovation-related goals by the different
leadership styles. For instance, Elenkov et al. (2005) offer empirical indications that
strategic/CEO leadership can be supportive to achieve organizational innovations. That
strategic/CEO leadership is the only leadership style that has been associated with
organizational innovation in this review does not mean that no other styles have the
potential to do so, but that to date no empirical support has been given for any other
leadership style to do so. We conclude each section with a “profile”, summarizing the
most important findings with regard to the four key dimensions of leadership.
3.1 Directive and participative leadership
According to Lornikova et al. (2013: 573), directive leadership “is associated with a
leader’s positional power and is characterized by behaviors aimed at actively
structuring subordinates’ work by providing clear directions and expectations regarding
compliance with instructions.” In contrast to that, Somech (2006: 135) defines
participative leadership as “shared influence in decision making”. In both cases, the
final decision-making power rests with the leader. The main differences relate to both
the extent to which leaders consult with followers and the extent to which followers are
allowed to express their opinion in the decision-making process. We discuss both styles
jointly in this section to compare insights regarding the impact of different forms of
participation on innovation. Basically, directive and participative leadership are to be
seen as opposite ends of a continuum. However, we acknowledge a potential confusion
in the structure. In consequence, we have separated them as LS1a and LS1b in table 1,
2 and 9.
Research offers a few insights into the means, i.e. how directive and participative
leadership are executed in innovation projects. In her case study, Kanter (1982) finds
that directive leaders drive innovation processes by controlling, monitoring, instructing,
and hierarchical influence. Somech (2006: 140) specifies that directive leaders provide
“team members with a framework for decision making and action in alignment with
the superior’s vision.” Burpitt and Bigoness (1997) found that participative leaders
succeeded in encouraging team-level innovation by getting involved early, and staying
involved throughout the entire project, but giving team members the freedom to
develop new solutions at the same time.
Research on innovation provides evidence on the specific benefits of directive and
participative leadership with regard to different innovation-related goals. On the one
hand, research shows that directive leadership is particularly beneficial for establishing
clear rules (Somech, 2006). On the other hand, several studies show that participative
leadership stimulates creativity and the development of new ideas (Frischer, 1993;
Nijstad et al., 2002). Possibly as a side effect of that, Yan (2011) found in a study of
201 companies that participative leadership generally raises the conflict level during
the innovation period. This line of research gives the general impression that
participative leadership is beneficial during the early innovation stages, whereas
directive leadership may be required more in the later stages. With regard to innovation
types, Stoker and colleagues (2001) found that participative leadership is particularly
supportive for product innovations and R&D.
Journal of Innovation Management Kesting, Ulhøi, Song, Niu
JIM 3, 4 (2015) 22-41
http://www.open-jim.org 27
Table 1. Profile of existing research on directive leadership (LS1a).
People Means Effects Goals
One leader
(direct)
Controlling, monitoring, instructing,
hierarchical influence
Providing a framework for decision
making and action
Establishing
clear rules Implementation
Table 2. Profile of existing research on participative leadership (LS1b).
People Means Effects Goals
One leader
(consult)
Freedom to develop solutions
Early involvement in projects
Innovative
climate
Increased
conflict level
Ideation
Product
innovation
R&D
2 Interactive leadership
The concept of interactive leadership dates back to a study of female leaders by Rosener
(1990). In this study, Rosener singled out four core characteristics of interactive
leadership: encouragement for participation, widespread sharing of information and
power, efforts to enhance self-worth of employees, and energizing employees for
different work tasks. With regard to innovation, Bossink (2004: 216) has specified that
the interactive leader “empowers others to innovate, cooperates with them to innovate
and shows them how to become innovation leaders in the organization themselves.” In
this sense, not only individuals, but also teams can be empowered (Burpitt and
Bigoness, 1997). However, in contrast to distributed and shared leadership, this
empowerment is restricted (typically to a project or functional base) and still carried
out under the control of the interactive leader. In this sense, empowered leaders act as
delegates of the interactive leader.
Research shows that interactive leadership typically involves some kind of guidance,
showing empowered employees how to innovate by coaching and providing them with
other relevant support (Bossink, 2007). Markham (1998) found that interactive leaders
have also used cooperative tactics to direct the activities of empowered employees.
Regarding the effects, research demonstrates that interactive leadership is particularly
suited to encourage followers to participate and contribute, and that this has a positive
effect on the innovation climate, raising the general level of enthusiasm about
innovation (Bossink, 2004). However, some researchers argue that this leadership style
may not be sufficient for innovation due to its inherent lack of a specific future vision,
and thus recommend carrying it out in combination with other leadership styles (1998;
Norrgren et al. 1999).
Regarding the goals, research offers some evidence that interactive leadership does
indeed contribute to firm innovativeness. In their investigation of 60 teams in 20
companies, Burpitt et al. (1997) found that teams have been most innovative when
Journal of Innovation Management Kesting, Ulhøi, Song, Niu
JIM 3, 4 (2015) 22-41
http://www.open-jim.org 28
actively engaged and empowered. Bossink’s (2004) case study gives some indication
that interactional leadership can contribute to the success of innovation projects. There
is no further specification of innovation stages or types, however.
Table 3. Profile of existing research on interactive leadership (LS2).
People Means Effects Goals
One leader
(delegate)
Temporary
empowerment of
individuals or teams
Coaching, guiding,
supporting
Encouraging participation
Raising enthusiasm
Emphasizing involvement
Creating Commitment
Unspecified
positive effect on
innovativeness and
innovation success
3.3 Charismatic leadership
According to Weber, charismatic leadership is “resting on devotion to the exceptional
sanctity, heroism or exemplary character of an individual person” (1921/78: 215). In
the same vein, Shamir et al. (1993) argue that creating a sense of collective identity is
essential to being a charismatic leader.
With regard to the means of leadership, there is some solid empirical indication that
charismatic leaders lead innovation projects primarily on the basis of their “behavior,
beliefs, and personal example” (House et al., 1991: 336; see also Eisenbach et al.,
1999). Personal engagement mediates this effect (Nohe et al., 2013). Several studies
have reported that...