Stronger business leadership sorely needed for innovation

A failure of business leadership is acting as a drag on workplace innovation and business profitability, a comprehensive study of Australian industry has determined. The survey of 2,400 business professionals from all sections of industry and government - conducted by the  University of Melbourne  and the   Australian Institute of Management  - finds poor leadership is the main reason organisations fail to innovate. The three main obstacles to innovation are all leadership related, the report  'Innovation: The New Imperative'   finds. These include: Organisations being too risk adverse Employees not being rewarded for innovating The exceptionally long lead time it takes to develop ideas The survey found firms with proven innovation performance are three times more likely to have higher revenue growth, profitability, productivity and to report higher levels of cash flow, cost advantages and long-term competitive advantage. Lead researcher  Professor Danny Samson , from the University's Faculty of Business and Economics, said leadership is "crucial" for innovation. "Effective leaders put in place the right strategies. They know that systematic innovation needs to be properly resourced in terms of processes and people skills, and they recognise staff must be properly encouraged," he said.