28 Mar Why Leaders Matter in Innovation
This article explores the crucial role leadership plays in fostering a culture of innovation within an organization. It highlights the story of Mastercard’s transformation under CEO Ajay Banga, where innovation became a strategic imperative for capturing a larger market share.
The article paints a clear picture of the challenge Banga faced. The payments industry was on the cusp of disruption, and Mastercard needed to move beyond the established 15% electronic market share towards the vast, untapped potential of cash and check transactions. However, employee surveys revealed “innovation” ranked a lowly 26th in factors employees deemed important for the company’s future.
This is where leadership stepped in. Banga recognized the need for a cultural shift and entrusted Garry Lyons with the critical task of igniting an innovation mindset across the organization. Lyons, empowered with significant resources and freedom, established Mastercard Labs – a global R&D network showcasing the “art of the possible.” This initiative served as a catalyst, demonstrating to employees, customers, and stakeholders the potential of innovative solutions.
The article doesn’t explicitly state the “ABCs” of innovation, but the Mastercard Labs example highlights some key leadership strategies:
● Vision and Purpose: Banga’s vision of financial inclusion, encompassing both business growth and societal impact, provided a clear purpose for innovation efforts.
● Empowerment: Lyons’ role as a “catalyst of change” with significant resources demonstrates the importance of empowering leaders to drive innovation initiatives.
● Culture Building: Mastercard Labs fostered a culture of exploration and possibility, moving “innovation” from a low priority to a core value.
The Harvard Business School case study underlines the importance of leadership in overcoming the challenges of innovation at scale. While short-termism and organizational inertia are formidable obstacles, the emotional and intellectual challenges for individuals within the organization were identified as the most fundamental hurdles. Leaders who can champion a clear vision, empower teams, and cultivate a culture that embraces new ideas are essential for driving successful innovation.
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