The Importance of Innovative Leadership (With Skills)

By Indeed Editorial Team

Published 20 July 2022

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

To help a company remain competitive and adapt to market changes, leaders may wish to discover new methods of running a business. The ability to conceptualise unique and effective business strategies can help a leader innovate in their industry, thus empowering the business to grow. If you wish to become an innovative leader, you may want to learn more about how you can implement innovation in a company's workflow to promote growth and longevity. In this article, we discuss the importance of innovative leadership in business, including a definition, a list of qualities and the value that innovation provides.

Related: 12 Types of Innovation Strategies (With Importance)

What is the importance of innovative leadership?

The importance of innovative leadership lies in its ability to extend the longevity of a company, helping it succeed. Innovative leadership refers to business leaders that strive to improve a business model with large-scale changes that help it adapt and improve. They may develop these big changes by recognising multiple small issues that a company faces and conceptualising a method of solving all of them with a single change. Innovative leaders use a combination of research and practical experience to help businesses excel.

By consistently devoting time and energy to developing more efficient methods of operation, innovative leaders can help to ensure a company does better than its competition. This can involve making changes at all levels of operation, from expanding employee training to investing in experimental new technology. Innovative leaders are willing to make bold choices on behalf of a company to succeed beyond the capacity of competing businesses.

Related: What Is Disruptive Innovation and How Does It Work? (With Example)

Qualities of an innovative leader

Many innovative leaders may share qualities that make them adept at improving a business. The following are qualities that innovative leaders commonly share:


To implement more efficient methods of operation in a business, innovative leaders can typically envision how they wish to change the company in detail. This detail-oriented ability to interpret a company's future success can benefit both the company and its employees. First, it helps the company advertise its impending success to potential shareholders. Potential investors may recognise the likelihood of the plan's success and invest more money in the company, thus improving the company's ability to fund new ventures.

Second, the employees benefit because they have the details they require to implement a new strategy. The leader's description of the new workflow may involve specific changes to employee operations, so the employees can enact these changes efficiently. This can involve adopting new technology or organising training so the employees can implement the vision as their leader described it.

Related: What Is Leadership? (With Key Elements of Leadership)


To improve their company's ability to profit and satisfy its customer base, innovative leaders may focus on ways it can improve its customers' experience. This could involve asking customers for feedback, researching customer satisfaction methods that other companies use or envisioning potential changes and enacting them in trials.

This method of focusing on customer needs can help a company stabilise its customer base and improve its ability to reach new customers. The leader may initiate a campaign in which the company offers benefits to all its customers, thus improving the chances that customers may refer new ones. This form of advertising is typically free and more reliable than traditional advertising, thus making it a worthwhile investment for an innovative leader to pursue.

Able to cultivate and offer trust

Innovative leaders typically create an environment of trust within an organisation to establish strong relationships with employees and collaborators. This trusting relationship can benefit employees by assuring them that the company considers their best interests. The employees may reciprocate this trust by performing their work as effectively as possible.

An innovative leader can cultivate a trusting relationship with external collaborators by maintaining an open line of communication. If the collaborators want to learn more about the company's successes, the leader can provide that information. In exchange, these collaborators may be more willing to invest in a project, thus enabling the company to reinvest in its efforts to innovate.

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Focused on the health of the organisation

Innovative leaders typically prioritise ways they can benefit an organisation. They ensure that every action they take on behalf of a company serves its interests. This sense of loyalty helps to assure both employees and shareholders that the leadership of the company is striving to improve its business.

Innovative leaders may prioritise their loyalty to a company over their benefit from it. This could include taking a lower salary, so the company has more liquid assets to invest. They may invest their stake in a company in employees to ensure they receive higher pay. These methods of displaying loyalty can prove to other professionals both inside and outside the company that the leadership cares about innovating and improving.

Focused on employee satisfaction

An innovative leader usually understands that the most effective asset a company has is its trained and loyal employees. To develop employees' sense of loyalty, the leader may provide them with a comfortable, enjoyable working environment and suitable pay. They may invest in employee comforts in the office or provide supplementary compensation for doing an exceptional job. By acknowledging good work, a leader can help employees understand that the company values them.

An innovative leader may communicate with employees as a way to address issues. As employees can offer a practical perspective on the efficiency of a company's workflow, a leader could learn valuable lessons from them about improving the company. They could also learn more about how the employees feel about their leadership style, which could inform the way they present themselves within the company.

Related: 10 Types of Leadership Styles


To further their ambitions to improve a company, an innovative leader typically uses emotional language to convince their peers to understand the value of their ideas. They know that their strategy is strong and well-researched, and they can share that fact with others. This strong rhetorical ability can help an innovative leader inspire optimism in clients and employees, which can further motivate all parties involved to pursue their ideas.

Persuasion is also valuable to establish a trustworthy team that shares the leader's vision. By providing a strong argument and allowing others to willingly accept it, an innovative leader can receive long-term support for their ambitions. Once they've convinced others to enact their ideas, they can then work on encouraging more clients to participate in their business model.

Related: Change Leadership Styles: Definition and Examples


Innovative leaders wish to achieve greater success than competitors, which may involve setting ambitious, challenging goals. These goals can help inspire innovation in employees as they attempt to find more efficient ways to work. An innovative leader may support these efforts by rewarding overachieving employees consistently.

Shareholders may also appreciate the value of ambitious goal setting. More shareholders may wish to invest in a company as they realise the quality of the leader's plan. As investors take an interest in this goal, the company may receive more funds with which they can pursue it.


An innovative leader typically emphasises a company's ability to test new methods of operation quickly and determine their quality. This allows the company to consider a wide variety of alternatives to its current methods of operation while investing a minimal amount of time in them. This can help the company find the most effective ideas so it can integrate them into its workflow.

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Innovative leaders are typically straightforward with their thoughts and preferences. As they value saving time and streamlining, they may address potential improvements with little delay. This can help them further establish trust with employees and collaborators. In exchange, an innovative leader may request feedback from employees and collaborators. This can help provide these parties with an outlet for their concerns and ideas, which can further improve a company's workflow.


In addition to describing their ideas well to others, an innovative leader can represent their ideas through their actions. This can lend credibility to their strategies by proving that they act on their beliefs. Employees may recognise the sincerity with which their leader regards their values, which can inspire them to support their leader. Shareholders may readily accept more of the leader's new ideas as they realise this leader keeps their promises.

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