Entrepreneurship

Organizational Dynamics, Vol. 38, No. 1, pp. 64–72, 2009 ß 2008 Elsevier Inc. All rights reserved. www.elsevier.com/locate/orgdyn

ISSN 0090-2616/$ – see frontmatter doi:10.1016/j.orgdyn.2008.10.005

The Influence of Leadership on Innovation Processes and Activities

ADEGOKE OKE NATASHA MUNSHI FRED O. WALUMBWA

INTRODUCTION In the August 1, 2005 issue, Business Week magazine reported that due to the emergence of low cost economies of Eastern Europe and Asia as the preferred locations for sourcing knowledge related activities (such as digitized analytic work and manufacturing), the focus of U.S. corporations is shifting from the knowledge economy to what is being referred to as the creativity economy. As a result of the increasing commoditization of knowledge, the creativity economy represents a change in paradigm – where the focus of competition will be on creativity, imagination and innovation. Leading through innovation in a creativity economy appears to be the only way (at least for the moment) that U.S. corporations and western corporations as a whole can gain and sustain competitive advantage. In a survey of over 900 senior executives by Boston Consulting Group Inc, innovation was identified as key to driving top-line revenue. This is evidenced in how different types of innovations have transformed many corporations. For example, the success of the BlackBerry transformed an otherwise unknown company, Research in Motion. Apple Computer Inc.’s iPod, a huge success that integrates technological, business model and branding innovations, became a high revenue earner for Apple. Another example is the process innovation of Southwest Airlines Co. that has enabled it to become a highly successful low cost airline. Procter & Gamble Co.’s focus has been on design innovation, which has helped it to transform itself and outperform its industry competitors. Innovation can be seen as representing a change in the status quo and has been defined as involving the discovery...