By Sebastian Schuh et al.

Innovation is crucial to practically all companies as they strive to remain successful and relevant in a hyper-competitive global business landscape. A large number of studies exist on how different forms of leadership can encourage employees to innovate. Nevertheless, the relationship remains understudied when it comes to grasping the impact of leaders’ styles across different national cultures.

A recent study from more than 30 business schools and universities around the world addressed this question by examining the effects of four well-established forms of leadership simultaneously – transformational leadership, authentic leadership, identity leadership and leader-member exchange (LMX) – on encouraging employee innovation. To discover how culture fits into this relationship, the research team collected data from over 7,000 participants across 23 countries that were grouped into 9 different cultural clusters.

Inspiring follower innovation requires a ‘group first, leader second’ mentality

Good leadership and innovation go hand in hand. Across different world cultures, leaders can help inspire their followers to think and act more innovatively. However, the results of our study show that certain leadership styles can have less of an encouraging effect on employee innovation than others. Specifically, our analysis showed that:

• Overall, LMX, authentic leadership, and identity leadership had unique positive links with employee innovation. Of these leadership styles, LMX had the strongest positive relationship with employees’ innovative efforts.
• However, the specific effects of leaders’ styles varied across culture: LMX was the strongest predictor of employee innovative behaviour especially in Confucian cultures, Eastern Europe, and Latin America. By contrast, in Anglo-American and Germanic cultures, authentic leadership showed the strongest link to employee innovation.
• Interestingly, in several cultures, transformational leadership was negatively related to employee innovation; for example, in Latin America and the Middle East.
• The links between leaders’ styles and employee innovation can be explained by how these styles impact employees’ social and personal identification. Social identification (when employees strongly identify with their team and organisation) showed positive links to employee innovation; while personal identification with a leader was negatively linked to employees’ innovative efforts.

These results indicate that high quality LMX and authentic leadership are the most positive predictors of employee innovation. Accordingly, managers of global teams who want to be effective in encouraging innovation in all their employees – regardless of cultural background – should focus primarily on these styles.

Leaders: Let others’ light shine through

Organisations, particularly those who want to appear highly innovative, are often keen to attribute success to the ‘visionary leadership’ of those in C-suite positions. Google is a prime example of a company that catapulted itself from garage-based obscurity to world renown through its innovative approach. However, as it expanded globally, Google was careful to inculcate a cross-organisational culture of letting employees pursue innovative ideas and concepts, rather than relying purely on their leaders to forge their path.

Our research shows that relying overly on leaders is not a recipe for encouraging employee innovation. In fact, in merely trying to provide a brilliant example for others to imitate (i.e., by focusing on personal identification), leaders can actually inhibit innovation in their subordinates. Whereas, if employees identify strongly with their specific team and the wider organisation, our findings show that they are more likely to develop innovative ideas that help advance and improve outcomes for the group.

When it comes to employees’ innovative efforts, leaders need to think about how they can best develop social identification across their entire team, whatever its cultural makeup. They need to be aware that innovation, especially in the context of global business, is an inherently social phenomenon; it is grounded in team members’ identification with, and desire to advance, their group, organisation and industry. Charismatic, exemplary leadership will always be an asset, but when it comes to encouraging employee innovation, leaders need to strengthen bonds between the group, rather than just seek the limelight.

This article is based on a paper entitled, “Innovation across cultures: Connecting leadership, identification, and creative behaviour in organizations” published in Applied Psychology here.

Sebastian Schuh is Professor of Organisational Behaviour and Department Chair (Organisational Behaviour and Human Resource Management) at CEIBS. For more on his teaching and research interests, please visit his faculty profile here.