Understanding Creative Leadership & Innovation Leadership
How to become a creative leader and innovation leader who can solve new and complex challenges with transformational solutions
As transformational leaders, once we can show up as conscious leaders, feeling fluid and free—and as purposeful leaders, we can leverage using our purpose to focus on a specific Transformational Challenge (a problem for our organization or users that arises because of our fast-changing world)—it is time to create a transformational solution, or innovation, to solve the problem.
This is the domain of creative leadership and innovation leadership: solving Transformational Challenges with transformational solutions that adapt our enterprise or unit to the fast-changing world. It is the 3rd spiral in our 6 Spirals of Transformational Leadership:
Creative leadership and innovation leadership are about rapidly making sense of Transformational Challenges and reframing problems into possibilities by casting a new light on them; and then resolving them creatively by experimenting with a palette of adaptive responses. Creativity is as key for future-proofing our own careers as it is our enterprises. Even the smartest AI programs are baffled by things that 6-year-olds can do easily: like create a new structure in LEGO or sense that their Mommy is feeling tender and needs a cuddle.
Machines will do algorithmic, rule-based learning better than we ever can. But they won’t do rule-breaking creativity anytime soon. And they won’t be able to care for the elderly, depressed loved ones, or stressed out and overwhelmed employees. As far as my understanding of both computing and consciousness goes, there will never be such a thing as Artificial Transformational Creativity or Artificial Heartfelt Wisdom.
The creativity we need to understand complex problems—and then solve them with inspired solutions—demands very high levels of both cognitive smarts and embodied wisdom. We need cognitive smarts, or insightful action, to make sense of complex problems through different lenses, rapidly shift lenses and frames, and move to a resolution.
We need embodied wisdom to be able to give up old frames rapidly, release outdated assumptions eagerly, empathize with users fully, sense into the moment maximally, and have the confidence necessary to move toward a creative solution that we cannot be sure is right (if we were sure it was right, it would be a best practice improvement, not a transformational innovation).
While everyday creativity and adaptability is, of course vital, in the immanent moments where each problem appears, the great test of transformational leadership is being able to lead and land significant business transformations and disruptive innovations in products, processes, and policies. This means harnessing creativity strategically to metabolize Transformational Challenges—which constantly arise due to the rapid changes in the external environment—into value-generating innovations that are then delivered with regenerative business models.
We are using both C&C Mode and C&P Mode at all times to bring creativity to bear on challenging problems; and then refine and optimize ideas so they actually work. Between the two, we can enter what psychologists call creative ‘flow states.’ Academics, such as psychologist Mihaly Csikszentmihalyi (formerly at the University of Chicago), have interviewed hundreds of sportspeople, artists, and scientists, and found that many of them have experienced times when their sense of self, time, and space has receded. Instead, they have been fully consumed by the moment: with creativity flowing from them without striving for it.34
The creative and innovative transformation leader recognizes that, at some point, best practice in every business area will no longer be enough to drive either decent returns or positive social and ecological impact. Mismatches occur that show up as signs and symptoms of fading and failing. We know these as Transformational Challenges. We must be able to see these signs for what they are—an opportunity to transform some area of product, process, or people so it better fits the emerging world—rather than dismiss or deny them as mere technical problems; or diminish them by blaming someone or something else.
Every innovation/transformation process (remember that they are two manifestations of the same underlying movement toward changing things to fit the world better) begins by defining a Transformational Challenge or two by looking through the prism of personal and business purpose. Transformational Challenges always emerge in fast-moving systems and markets where changing customer needs, segments, technologies, and realities make old ways obsolete. Each challenge is always an opportunity for someone: the creative and innovative transformational leader who can see them for what they are and has the strength to rise to them.
The Business as Usual mindset of good management tends to deny or avoid Transformational Challenges. C&P Mode blames the market; the business context; our competitors. C&P Mode retreats into a comfort zone of technical problem-solving that focuses on symptoms rather than root causes. In C&P Mode, leaders bring in external consultants to look like they are in action but are rarely given enough power to implement genuinely transformational solutions; or they commission a (yet another)
The transformational leader knows he/she must get into C&C Mode long enough to recognize each challenge; as well as become curious about all the ways there might be to fully resolve it. We must be able to call time on a particular product or business model and restlessly seek the next-level product or process that can replace it. Yet we must do this all without disturbing the existing business too much.
We need to maintain predictable returns and profitability (perhaps actively managing the decline of a product or revenue stream) while giving ourselves the time, space, and permission necessary to disrupt ourselves. This capability lies at the heart of creative leadership. We want to be able to succeed in the present even as we invent a future that lives up to our
Once we see and own a Transformational Challenge—and willingly take it within our organization by owning it—we must then metabolize the problem into value-creating ideas for new products or processes. This means mastering how to cause breakthroughs: opening up transformational solutions that cannot be predicted by extrapolating the past. We transmute changing customer/employee needs, global risks, and new technologies into concrete value. This happens by consciously deconstructing best practice to invent next practice.
There is a dual move here. On the one hand, we bring to the surface and challenge legacy organizational and industry-wide assumptions that are no longer a fit with the world. We identify and release what is breaking down and fading from value. Insight into what is being disrupted, deconstructed, and destroyed is delivered brilliantly by analytical consciousness: taking apart wholes and breaking them down into constituent parts. It is related to the deductive process of science.
At the same time, we must seek what is breaking through so we can encourage it, shape it, and deliver it to market before anyone else does. This means making sense of, and harnessing, “weak signals” of the future in the present. Insight into what is being formed, transformed, and generated is delivered brilliantly by connective consciousness (assuming we can pause, reflect, and connect): taking fragments and nuggets and building them into a coherent, congruent, and creative whole. It is related to the inductive process of science. Future-forward signals of what is possible and what is emerging—that we pick up and call ‘insights’—prove that there is a source of (often exponential) value in the future that has yet to be captured with a creative strategy.
We want to spot weak signals of emerging changes that open up opportunities—market shifts, competitor moves, unusual customer needs, and changing team dynamics—and leverage them before other people do; and before crises turn into terminal spirals where there is no longer time to adapt. Crisis and disruption are always opportunities for leaders that can sense what is breaking down and what is breaking through and act on it with transformations that have time to be implemented into the world.
A central ingredient of creative leadership and the leadership of innovation is what I call “smart experimentation”: testing out ideas without needing them to be piloted to perfection; in cheap and fast ways with real human beings that provide actionable data and insight; and doing this systematically—scientifically—so we know what we are actually testing for with each prototype and trial we carry out. This means bringing a level of rigor and discernment into creative processes and teams. We ensure that every experiment has a hypothesis to test; and that the variables are reduced as much as possible so we know if the hypothesis is proven or not.
We are working with a creative harmony: using C&C Mode to open up new customer insights and ideas; and then improving, refining, discerning, analyzing, testing, and evaluating each with C&P Mode. We are able to get out of Business as Usual mindsets and enter C&C Mode to be curious, open-minded, and quick-to-learn; looking for what is possible within ambiguity. Then we appraise ideas, from others and ourselves, critically and without attachment in a restless search for excellence in C&P Mode. The very latest research backs this: creative leaders and innovators are able to co-activate both Modes simultaneously.
As transformational leaders, we must nurture an innovation culture where diverse individuals can access safe spaces and agile places to be creative. This means generating mindsets, habits, and emotional states that nourish inchoate ideas rather than criticize, control, and kill them off. We want to shift our people from seeing failure as something that is going to cost them their livelihoods and the respect of their peers; to realization that failure (small, cheap, strategic) is the only way to provide the learning we need to adapt and transform.
This is very challenging as most people have protective patterns learned in childhood—and then further conditioned in each moment of every day by efficiency-driven company cultures—to avoid failure at all cost. Instead, creative transformational leaders need to be able to carefully stretch comfort zones so people can risk thinking new thoughts and embrace failure as learning. This kind of “fail-forward” culture, as I call it, understands that when we are forging the future, we have to find ways to fail well; and use all failure as an opportunity to challenge deeply-held assumptions with triple-loop learning.
As creative and innovative transformational leaders, we must develop our capacity to be agile: able to change direction constantly as new data and insight comes rushing toward us without losing clarity, consistency, and focus. We must allow for constant ongoing evolution and creative iteration even as we execute with laser-like intention. Otherwise, by the time we deliver our project, the new product/service/business model will be out of date already.
Transformational execution requires a creative harmony of both intentional and committed action and adaptive and emergent behavior. We must always sense and discern when to let go of an idea that is not a fit (or whose time has yet to come); when to park a plan that is just not working; when to postpone any action until we have reflected sufficiently; when to sit not knowing the answer so insights and ideas emerge as we grapple with chaos and ambiguity; and when to push our foot to the floor to make things happen today. We must be able to be intuitive and adaptive but also know when to apply pressure and dig inside for more grit, breaking through perceived limitations.
Ideally, we want to cultivate the mindset of a start-up founder with whom the buck stops. There is nobody but us. We want to drive forward execution at pace, fearlessly getting in action to champion change at every opportunity. We don’t want to complain about any resistance we encounter to our ideas or get stuck and doubtful when we reach a bump in the road: all transformational innovation will encounter inevitable and challenging execution challenges. Instead, we always move to solve problems, creatively coming up with ideas on the fly.
This means we must be able to generate a near-constant source of motivation within us. I have found—through many, many ups and downs—that a genuine purpose is the next-level fuel we need to execute next-level ideas. Purpose allows us to be both totally committed to our ideas and totally ready to give them up; and have the resources needed to pivot on a dime to find a way to bring our vision to reality.
We must be dedicated and devoted to our transformational innovations, but never attached to the fruits of our labor, as the great Indian wisdom text the Bhagavad Gita puts it. We must build a ‘reality distortion field’ to create space in the world for our innovation no matter what the naysayers and doom-mongers think; yet never let our own hubris and chutzpah prevent us from learning from failure and feedback.