Whether in business, the military, or academia, “Innovation” is the word of the day. It is touted as the solution to all of our collective problems. Apparently, like P.F. Flyers, Innovation will make you run faster, jump higher, and beat your competition.
Like Vezzini in the Princess Bride, many leaders cite ‘Innovation’ without a solid understanding of what innovation actually means or requires.
Unfortunately, innovation isn’t something you create a calendar invite for and check off your ‘to do’ list. Innovation requires sustained clarity of purpose and a culture of trust.
Innovation requires leadership.
First things first: Innovation is much more than the latest technological breakthrough. Innovation is a process, not a product. Innovation is solving old problems in new, more effective ways.
Leaders must harness technology while also looking beyond it. Leaders must understand their role in developing organizational cultures supportive of creative problem solving. This requires embracing the human economy and leading with trust, empathy, and an appreciation of well-intentioned and purposeful risk-taking. Only then is true innovation — where technologies, tactics, strategies and structures enable organizations to achieve their goals in new and more effective ways — possible. 
So what does this mean? It means leaders who wish to innovate must consider whether their leadership and their organization’s culture nurture innovation or starve it.
Agile, innovative organizations share four primary characteristics:
- They provide dedicated time for intense study of and reflection on a problem
- They encourage members to critically examine the future operating environment
- They provide clarity and create cohesion through a sustained long-term vision.
- They pay attention to the ‘human element’
None of these attributes are peculiar to any ‘sector’ of the economy. Innovation always requires time, vision, and insight. Like plants in a garden, or cultures in a lab, surroundings matter. Organizations capable of true innovation also possess cultures which provide sustained vision, encourage creative problem solving, and make resources, including time, available for experimentation.
A Culture of Innovation
“Innovation is at heart a process of discovery…. The role of the person leading [the effort] is to set other people down a path, not to short-circuit it by jumping to a conclusion right from the start.” — Nathan Furr & Jeffrey Dyer
When considering innovation, leaders must first understand their organization’s culture. Culture emerges from the organization and impacts every aspect of its productivity and decision-making. Culture becomes a control mechanism ingrained in the processes of recruiting and assimilating new members, perpetuating the organization, and establishing persistent standards for behavior and success.
Kevin Corely, the Organizational Researcher, finds that senior leaders tend to place greater importance on the views of external stakeholders, while the organization’s rank-and-file tend to view the organization almost exclusively from an internal perspective, valuing cultural artifacts highly and oftentimes failing to account for external perceptions entirely.
In fact, lower-level employees consistently express concerns regarding discrepancies across time and emphasize any mismatches between senior leader rhetoric and employees’ daily experience. Conversely, senior leaders consistently focused on discrepancies between their perceptions and external stakeholder perceptions of the organization. 
The further apart senior leaders and the rank-and-file are in their perceptions, the more likely it is that an environment of distrust between them will emerge…
In an environment of distrust, innovation is impossible.
In order to reverse a culture of distrust, leaders must narrow the gap between themselves and the rank-and-file. Then, since the rank-and-file maintain a strong connection to cultural artifacts and desire consistency across time, it is especially important that leaders incorporate concrete links between the current organizational culture, the desired organizational change, and the continuity between the two.
The Human Operating System
Changes in technology and changes in society are driving changes to the workplace. The emerging workplace demands sustained high organizational trust. Because trust and distrust are both circular and reinforcing, the level of employee empowerment becomes a powerful indicator of how successful an organization is at building or sustaining trust.
Even in hierarchies such as the military, rapid changes in the ways we communicate are reordering relationships and sources of knowledge. In a November 2014 article for HBR.com, Dov Seidman proposes that the knowledge economy is transitioning to a ‘Human Economy’ just as the agrarian economy once evolved into the industrial economy. Seidman asserts that economies are defined by how workers add value and that “in the human economy, the most valuable workers will be hired hearts.” While knowledge workers were prized for their technical abilities, those skills continue to be replaced by machines with greater and greater sophistication. What is not being replaced, are the “essential traits that can’t be and won’t be programmed into software, like creativity, passion, character and collaborative spirit — their humanity in other words.” In a human economy, trust becomes more, not less important.
Some of you may be familiar with Brene Brown, the shame and vulnerability researcher who rocketed to Internet fame in 2010 with her moving talk on the ‘Power of Vulnerability.’
While vulnerability and shame may not seem relevant to a discussion on leadership and innovation, what Brown discovered through her research was this:
Vulnerability is the birthplace of innovation, creativity, and change. -Brene Brown
“Vulnerability is the birthplace of innovation, creativity, and change. To create is to make something that has never existed before. There’s nothing more vulnerable than that. Adaptability to change is all about vulnerability.”
Innovation emerges from the courage to embrace the uncertainty that a new creation may not work.
Brown illustrates this connection through a story about one of the TED Fellows, Myshkin Ingawale. In his talk, Ingwale spoke about his drive to create a new way to test for anemia because people were dying unnecessarily. “He said, ‘I saw this need. So you know what I did? I made it.’ And everybody just burst into applause and they were like ‘Yes!’ And he said, ‘and it didn’t work. And then I made it 32 more times, and then it worked.’”
Think about that… he failed 32 times before he got it right…
Brown went on to say, “You know what the big secret about TED is?… This is like the failure conference… You know why this place is amazing. Because very few people here are afraid to fail.”
Innovation is not for the faint of heart. It does, however, require time, space, and a culture with an operating system based on trust to flourish within organizations.
In his article, Seidman tells the story of a man trying to catch a flight after the death of his grandson. Arriving at the airport two hours before his flight, the length of the security line told him immediately that he would never make it to the gate on time. With no alternative, he waited through security and ran through the airport, arriving at the gate breathless and carrying his shoes, twelve minutes after his flight’s scheduled departure. Instead of being greeted by a closed boarding door, the man was welcomed by the pilot. “‘They can’t go anywhere without me and I wasn’t going anywhere without you.’”
Hearing his story at check-in, the ticket agent called ahead to the gate.
This is the story of Southwest Airlines.
Southwest, like all airlines, is judged on their profit margin and on-time statistics. Unlike some other airlines, Southwest places “human values” at the center of all they do and consistently communicates this emphasis to all employees through words and actions. The ticket agent, the gate agent, and the pilot all did the human thing because they all knew holding the plane was not only the right thing to do, but “was consistent with Southwest’s well established values, chief among them, the insistence on doing the right thing for the customer.” The customer was served humanely because the philosophy and expectations were clear, the ‘human operating system’ was in place, and the employee and employer trusted one another that everyone’s actions, if consistent with that operating system, would be rewarded and not condemned regardless of the impact to the ‘on time’ statistics.
Knowledge remains important. Trust enables knowledge to flow through an organization while empathy informs knowledge as organizations transition to the ‘human operating system’ of the ‘Human Economy.’ Even with all the empathy in the world, the human operating system is ineffective without a knowledgeable and proficient workforce.
In his book, The Leadership Triad, Dale Zand establishes how knowledge, trust, and power form a tightly coupled system that either propels an organization to success or accelerates its decline. He summarizes these relationships this way:
When leaders have and use relevant knowledge, people trust them and grant them power because they have confidence that the leaders know what they are doing. When people trust their leaders, they disclose knowledge and accept the leaders’ use of power. Leaders guide their people to superior results, using the knowledge their people contribute.
When combined with Brene Brown’s understanding of vulnerability as the “birthplace of innovation, creativity, and change;” trust is clearly imperative in any organization that has staked its future on its ability to innovate.
The Essence of Trust & High-Trust Organizations
High trust organizations require high trust leaders. High-trust leaders “distribute power to competent people and encourage them to do the same.” This trust then enables cooperative behavior without having to resort to time-consuming monitoring and metrics. The same is true of distrust — If distrust is perpetuated, additional layers of monitoring and control mechanisms will most likely follow.
Since trust is circular and reinforcing, leaders aiming to increase organizational trust must deliberately display trusting behavior. An example might be to lower the approval level of a report. This indicates trust in subordinates and begins a positive feedback process. How leaders communicate also indicates their level of trust. High trust leaders clearly explain known risks to the organization and help followers understand expectations for managing them within purpose and intent of the organization. Consistent messaging and organizational alignment are integral to this effort. Organizations with well-aligned and well-understood interests will tend to foster greater trust.
This is easier said than done.
Yet the payoff for clear, well-aligned purpose, mission and values is this: in high-trust organizations teams collaborate for the benefit of the organization because they both give and receive trust from one another.
The Relationship Between Risk & Trust
Risk and trust are mirror images interpreted through assessments of competence, goodwill, known constraints, and judgment. If risk and trust are mirror images of assessed probabilities of outcomes, then environments of low trust are also environments of high risk. ,
Who are our customers? What is our purpose?
The Role of Intent and Clarity
Clarity of purpose is essential to a culture of innovation. It is only with an overriding clarity of purpose that an organization can develop a high-trust culture and create the time and intellectual space for employees to take the risks inherent in innovation. In Start With Why, Simon Sinek emphasizes the importance of clarity of purpose to increase both certainty and employee engagement. Consistent messaging and organizational alignment are essential to providing clear intent, which leads to greater trust throughout the organization. Sinek terms this clarity of purpose the ‘WHY’ of the organization. He conceptualizes organizations as consisting of a ‘WHY’, a ‘HOW’ and a ‘WHAT.’ In effective, innovative organizations the ‘WHY’ of the organization drives the ‘HOW’ (processes) and the ‘WHAT’ (products, services, or outcomes), therefore it is critical for organizations to not only identify their core purpose, but to align their processes and products or outcomes with that core purpose. In aligned organizations with clear purpose and intent, leaders are more likely to trust that subordinates understand the overall organizational goals. This opens up the possibilities for innovation. When leaders trust subordinates to understand the purposes and goals of the organization, they are more likely to accept the risk of innovation. When subordinates trust leaders will allow for failure with good intention — inherent in attempting new ways of solving a problem, they are more likely to attempt innovative solutions. Conversely, as Sinek notes, “when the WHY is absent, imbalance is produced and manipulations thrive. And when manipulations thrive, uncertainty increases.” When uncertainty increases, perceived risk increases, and trust decreases.
The Risk — Trust — Innovation Nexus: A Tightly Coupled System
Mutual trust and empathy enable organizations to harness the human operating system through the dual concepts of high-trust leadership and clear intent. High trust organizations delegate authority to commit resources down to the level of the information. In this way, they also distribute trust throughout the organization. In order to ensure success, authority must be accompanied by clarity of purpose and organizational intent. Innovation requires time, space, intense study, and sustained vision. To be truly innovative is to create something entirely new, which requires risk. In order to take the risks required by innovation, the organizational culture must encourage thoughtful risk-taking through the currencies of trust and empathy. Military and business innovation are different in purpose. Nevertheless, the core requirement of innovation, the ‘increased effectiveness through application of new technologies, tactics, strategies, and structures’ is the same for both. Empowered decision-making at the level of the information reduces bureaucracy and creates the time and space required for innovation. The mirror images of risk and trust are evaluated through the lenses of the assessed competence, goodwill, known constraints, and judgment of another party. Thus, a leader’s assessment of competence relates directly to the amount of trust granted to subordinates. This assessment either enables an effective human operating system through trust, empathy and reduced bureaucracy or disables an organization through distrust, increased control measures, increased fear, and perceived vulnerability.
In Leaders Eat Last, Sinek addresses the relationships between empathy, trust, and organizational effectiveness from a leadership perspective. Sinek develops a concept of the ‘circle of safety.’ Inside the circle, people are free from the dangers of modern organizational life: intimidation, humiliation, isolation, and rejection, among other things. Sinek asserts that a leader’s primary job is to set a culture free from danger within the organization so that the organization is better able to face the dangers from outside the organization. As Sinek notes, internal trust “creates an environment for the free exchange of information…[which] is fundamental to driving innovation.” A human operating system, enabled by the currencies of trust and empathy creates a culture capable of innovation. An organization’s human operating system, much like a computer’s operating system, must be built, monitored, maintained and adjusted to ensure it continues to operate as designed and intended. The role of organizational leaders is to perform these tasks, keeping constantly in mind that, “to earn the trust of people…[leaders] must first treat them like people.” People must be competent and confident. Once competent, confident people understand organizational vision and intent, it is leadership’s responsibility to “step back and trust that their people know what they are doing and will do what needs to be done.”  In organizations with strong human operating systems, and few control mechanisms, people may break the rules, but they will break the rules in line with the organization’s mission, leadership’s intent and because it is the right thing to do for people, not for their personal benefit. This reinforces the notion that “our confidence to do what’s right is determined by how trusted we feel by our leaders.”
The Way Forward
Innovation requires time, vision, and insight within a culture that provides sustained vision; encourages creative problem solving through acceptance of deliberate risk, trust, and empathy; and makes resources, including time, available for experimentation.
Remember: “Vulnerability is the birthplace of innovation, creativity, and change.”
Innovation emerges from the courage to embrace the uncertainty that a new creation may not work, which requires taking risks. Innovation is not for the faint of heart. It requires members of the rank-and-file who are willing take risks because they feel trusted and leaders who are willing to risk time, space, and resources on the rank-and-file because they trust their subordinates understand the goals and intent of the organization. The willingness to take the risks required to innovate is impossible without an organizational culture that is enabled by a human operating system based on empathy and trust.
It starts with you.
 Theo Farrell and Terry Terriff, Introduction to The Sources of Military Change: Culture, Politics, Technology, ed. Theo Farrell and Terry Terriff, (Lynne Rienner Publishers: Boulder, CO, 2002), 5.
 Nathan Furr and Jeffrey H. Dyer, “Leading Your Team into the Unknown”, Harvard Business Review, December 2014, 82.
 Kevin G. Corley, “Defined by Our Culture or Our Strategy?,” Human Relations 57, no 9, (2004), 1168.
 Dov Seidman, “From the Knowledge Economy to the Human Economy,” HBR.com, November 12, 2014, accessed: February 27, 2015, https://hbr.org/2014/11/from-the-knowledge-economy-to-the-human-economy.
 Brene Brown, “The Power of Vulnerability,” TEDx Talk, Ted.com, http://www.ted.com/talks/brene_brown_on_vulnerability/
 Brene Brown, “Listening to Shame,” TED Talk, Ted.com, http://www.ted.com/talks/brene_brown_listening_to_shame/
 Brown, “Listening to Shame”
 Seidman, “From the Knowledge Economy to the Human Economy”
 Dale E. Zand, The Leadership Triad: Knowledge, Trust, and Power, (New York, NY: Oxford University Press), 1997, 22.
 Brown, “Listening to Shame”
 Robert F. Hurley, The Decision to Trust: How Leaders Create High Trust Organizations, (Jossey-Bass, Wiley, San Francisco, CA, 2012): 99.
 Ibid, 7.
 T.K. Das and Bing-Sheng Teng, “The Risk-Based View of Trust: A Conceptual Framework,” Joural of Business and Psychology 19, no 1 (Fall 2004), 87 & 98–99.
 Ibid, 100.
 Simon Sinek, Start With Why: How Great Leaders Inspire Everyone to Take Action, (Portfolio / Penguin: New York, NY, 2009): 16.
 Ibid, 65–66.
 Simon Sinek, Leaders Eat Last: Why Some Teams Pull Together and Others Don’t, (Penguin Group, NY, NY, 2014): 14–22.
 Ibid, 24.
 Ibid, 11.
 Ibid, 75.
 Brene Brown, “Listening to Shame,” TED Talk, Ted.com, http://www.ted.com/talks/brene_brown_listening_to_shame/