Recent decades have seen a flood of interest and initiatives focused on the role of innovation in organization success and market superiority. The ability to compete increasingly requires novel ways of improving margin—with the need for ongoing operating improvements, innovation, and creativity to enable companies to keep pace with and stay relevant in rapidly changing markets. The results of innovation can be seen most obviously at the level of products and services with positive market impact, but also in terms of how entire companies function.

For companies striving to make innovation pivotal in their market impact, situational factors alone cannot fully account for success. When employees have the relevant attributes to innovate, the whole organization is more likely to be innovative. Creativity involves ideation—in this context, coming up with novel ideas and having a unique way of seeing the environment in ways that others do not see clearly or miss entirely.

Fostering an environment of teamwork and collaboration is a key determinant of organizational innovativeness. Innovative leaders demonstrate these competencies as well as traits like empathy, humility, sociability, and affiliation. The drive for achievement of results through systematic, disciplined execution is imperative for successful innovation. Successful innovation requires more than a propensity for good ideas. Innovative organizations need to translate novel approaches into business practices that improve organizational performance or products and services that reach the market.

Companies will not commit limited resources to develop commercial innovations unless they advance business strategy; and innovations will not gain traction in the marketplace unless they effectively address real customer needs. The right structures and processes are important because organizations are commonly set up for efficient processes and profits that can inadvertently hamper innovation efforts. But companies able to succeed cultivate innovation. They have become quicker and more agile in responding to opportunities, while reducing institutional obstacles to new ideas.

Having the right people in the right environment is essential to develop new ideas and that practices are in place to translate creative activity into end results.

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