How to develop a leadership culture for innovation and agility

EI is the new differentiator for a strong leadership culture, says Jill Pennington.

Reading time: 5 minutes.

With society and technology evolving faster than most businesses can adapt, organisations will need innovation and agility to remain competitive. This is against a context of increased uncertainty and complexity, causing many of us to feel anxious, confused and threatened.

Add to this the post-recession ‘hangover’– with a focus on cutting costs, doing more with less, and processes that seem to restrict adaptability and creativity – and the challenge is significant.

For forward thinking organisations that see this challenge as an opportunity, how is it possible to build a business culture where people are prepared to innovate, speak up and share ideas? The first step is to create a climate where everyone in the organisation feels psychologically safe.

For this to occur, L&D teams need to support leaders to change their mindset. To stop thinking they have all the answers, or they should have all the answers, and start facilitating change. Because if the fundamental concept of leadership changes, then a more adaptive, flexible and empowered workforce will come.

Changing leadership

The key to innovation and agility is climate – how it feels to work for an organisation. Climate is created by leaders. For people to be creative and agile in an increasingly uncertain and complex world, they need to feel psychologically safe. This means that they feel comfortable, and even encouraged, to challenge and try out new things – even if they make a mistake.

Emotionally intelligent leaders are self-aware enough to understand how underlying mindset drives behaviour.

Leaders must raise their understanding and awareness of the climate they create, and manage their own reactions to pressure and change, so they don’t create a ‘survival’ climate that stifles creativity and inhibits agility. 

They need to consciously create a climate where innovation flourishes. Much of this can be achieved by developing leaders’ Emotional Intelligence (EI) so they can more easily:

  • Communicate respect in their words and actions
  • Encourage employees to speak up
  • Be accessible and approachable
  • Show their fallibilities
  • Tolerate failure in themselves and others
  • Set a vision with clear expectations and boundaries.

Freedom within a framework

Agile is about developing a growth mindset that doesn’t fear failure, at the same time as operating within clear boundaries. While organisations need to move away from hierarchical structures to be more nimble, leaders still need to provide their teams with clarity. The key is to find a balance between dynamism and stability.

To innovate and embrace agile ways of working we need to fundamentally change how we work. Neuroscientists have discovered that the brain is more creative when we are calm, relaxed and often not focused on the problem we are trying to solve. This is why we sometimes get our best ideas when we are exercising or taking a shower.


What’s more, multitasking has become prevalent due to the need to do more, yet we know that multitasking actually decreases the brain’s power. To be creative we need to allow our brains to ‘freewheel’, so meetings, work environments and the climate need to provide physical and emotional ‘space’.

We also need to redesign jobs and meeting formats to focus on one thing at a time rather than expecting people to juggle many different tasks.

Brain evolution

By providing development in EI, people will become more able to manage the defences, habits and natural instincts that may hinder their flexibility and comfort with uncertainty. Our brains’ evolution means that some things we are naturally wired to do are counter to embracing change. So an understanding of how the brain works is important.

Our brains are wired to keep us safe, so trying out something new that may fail can trigger the flight or fight response, inhibiting our motivation to jump into the unknown.

The brain also conserves energy by pattern matching, which is why we can look at a situation and make assumptions based on what we know already rather than thinking outside the box. Helping people to understand both how to manage themselves, as well as how to manage their brain power, will enable them to work in different ways.

A changing concept of leadership

Key to all of this is leadership and our concept of leadership. The role of leaders in agile, innovative cultures is about setting the climate, facilitating change and enabling adaptability. For people to trust that innovation and agile are genuinely valued, leaders will need to guide, facilitate and collaborate rather than control and compete.

They will need high levels of assertiveness and resilience to challenge barriers.

The mindset of an agile leader is curious, humble and quietly assured. They are open to ideas and challenge, and focus on making things better for the customer and their team rather than making things better for themselves.

Leaders’ EI is key to this change. Emotionally intelligent leaders are self-aware enough to understand how underlying mindset drives behaviour.

An underlying mindset of high self-regard and regard for others drives more flexible and adaptive behaviour and reduces the need to behave in overly political or defensive ways. Growth mindset and EI sit at the heart of innovative and agile cultures.

Learning helps us to adapt whilst EI supports us to manage our ways of thinking and feeling, so that we can be creative and more flexible.

Learning and agile

Organisations and their leaders need to adopt a different view of learning. One that sees it as a competitive advantage that enables high performance, rather than something to address development needs and performance gaps.

Organisations must also provide the hardware and software needed for effective learning. This includes processes such as reviews and debriefs, as well as the psychological safety and space to try things out, reflect, and be open about what worked and what didn’t.

In this way, people will learn continuously from failure as well as success, so that learning becomes a creative and agile process of continuous improvement. Agile and innovation are enabled by climate, which originates with leadership and the mindset of leaders.

Learning is key to this.


About the author

Jill Pennington is Consulting Director at PSI Talent Management


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