Effective company leaders have a sense of purpose, and they embrace innovation. They nurture talent by offering their workforce challenges and opportunities to grow.

Embracing innovation is about much more than simply hiring the best talent or adopting the latest technologies. It’s a top-down initiative, and it starts with leadership practicing what they preach and leading by example. Even the best talent can’t stay innovative in a company culture that doesn’t encourage change.

It is essential for a company’s leadership team to define the culture and to keep this concept at the core when building the team.

Leaders constantly talk about the importance of innovation in the workplace, but most fail to sustain a truly innovative company culture. 

Here are five practices leaders can adopt to effectively create a permanent culture of innovation:

Set the Right Goals

Creating a culture of innovation means the whole team must feel invested, and be excited. Leaders need to build this excitement by helping the team set & achieve goals. A leader must understand the strengths and weaknesses of each individual team member, and understand the dynamics of the team as a whole. By understanding each team member, a leader can give each person the right set of challenges. This way, they will not set the bar too high or too low, which causes team members to lose motivation. Team members need to see a clear path to success.

Show Impact

Effective leaders will be able to show that their team members work has had an impact. When teams are heads-down and focused on the day-to-day responsibilities, they do not always see the end result of their work. It’s up to company leaders to show them. When workers can see how their work actually adds value, they feel a sense of purpose, and are motivated to bring renewed energy to the next project.

Encourage Collaboration Across Teams

Because they’re at a higher level, leaders have a better view of activities and workflow happening across different teams and can create opportunities for growth by encouraging collaboration. Since team members tend to focus on the task at hand and cannot always see the bigger picture, it is company leaders who should be breaking down the barriers between one team and another.

Match the Right Talent to the Right Opportunity

McKinsey surveyed a group of top executives and found they make three types of common decisions which help create a more innovative work culture. These decisions are: choosing which employees are assigned to which projects, determining the strategy for each project and commercializing the fruits of these projects.

Matching the right talent on your team to the right opportunities is the first step to success.

Real Leaders are Risk-Takers, and They Encourage Their Team to Take Measured Risks

Great leaders explore new things, and they do not rest on past successes. They embrace new technologies and new techniques to accomplish goals. Leaders are driven, and this should motivate their team to constantly seek out new, higher goals. Rather than standing still, the team should feel that they are marching forward together, finding new ways to distinguish themselves.

Taking risks can sometimes mean failing, so it is essential that leaders provide a safety net to their team members who aim high but fall short.

Team members should focus on executing as effectively as they can. Leaders must focus on the structure of the overall organization, constantly matching the right person to the right job and rewarding risk-taking.


Organizations run this way will not be satisfied with simply meeting pre-defined goals. Leaders and team members at organizations like this will constantly set higher goals, and then work together to reach them.

That’s what it means to build a culture of innovation.