The leadership/management conundrum: innovation or risk management?

Abstract

PurposeThe purpose of this paper is to present a data‐driven discussion about whether effective leadership and innovation are being stifled in a contemporary organizational environment of continuous change.Design/methodology/approachThe elaboration and discussion are based on one component of comprehensive research that uses a qualitative and case study methodology involving interviews with 60 leaders and managers in three large organizations.FindingsThe key finding is that the accurate application of, and interaction between leadership and management releases the social capital, along with related identity and knowledge resources that helps address the tension between risk management and innovation.Research limitations/implicationsThe paper reports only on one component of the original study. The findings and implications reported here are regarded as tentative.Practical implicationsBased on the data and ensuing discussion, the implications for practice take the form of a schema of steps for managing the change culture of organizations.Originality/valueBy its very name and nature “innovation” requires thinking and acting outside the square. However innovation can only exist when leadership allows and fosters risk‐taking which has been well considered, actioned and managed by a knowledgeable and skilled workforce. The amount of ignorance which exists in the workplace is proportionate to the amount and type of risk management or regulatory solutions required to counter potential negativity associated with risk taking. Therefore the responsibility of any leadership desirous of change or innovation in an environment which is not overregulated must include as its priority, building and maintaining a knowledge‐culture that supports and allows risk taking. The original model presented provides a mechanism for the strategic handling of risk, innovation and change where management and leadership can co‐exist and knowledge and identity resources can be released in social capital transactions.