The Executive's Role: What is the Role of Management in Innovation
Google’s Project Aristotle studied more than 37,000 employees across 180 teams1. What did it find? The single most powerful predictor of team success wasn’t technical skill or tenure, it was psychological safety. And that’s also directly tied to leadership and innovation.
The role of management in innovation is indispensable. An environment where people feel secure enough to speak up, share ideas, or challenge assumptions without fear of judgment encourages innovation. If they feel insecure, people get reluctant to share ideas, hence low innovation and creativity.
It goes without saying that innovation isn’t just a strategic advantage but rather survival in nearly every industry. In a McKinsey study, nearly a third of companies reported that future revenues are tied to new offerings2. And what exactly is the new offering? Nothing but creativity and innovation.
If management becomes a roadblock to innovative ideas, you can’t expect growth or higher employee satisfaction, for that matter.
Management can be an innovation catalyst
For organizations serious about sustained growth, innovation rarely fails because of a lack of ideas. It fails because management doesn’t actively enable those ideas to survive.
Research from Boston Consulting Group shows that companies where leadership actively sponsors innovation are 60% more likely to be innovation leaders3.
What distinguishes these organizations is not the size of their R&D budgets, but how executives behave. Innovation-driven management teams consistently:
Allocate decision authority closer to the front line
Protect experimentation from quarterly performance pressure
Actively model curiosity, learning, and constructive dissent
A great example of this innovation culture and leadership support is 3M. The Minnesota-based multinational company has institutionalized what it calls the “15% rule4.” They allow and encourage employees to spend up to 15% of their work time on self-directed innovation projects. It’s been in place for decades and has led to innovations like automobile window treatment films.
In essence, management sets the stage for innovation. After all, any new projects, products, and/or features must be approved by them. If they’re open to new ideas, opposing opinions, and unconventional thinking, they allow teams the necessary freedom to explore solutions to problems.
In practice, innovation cultures thrive when management shifts from asking, “Is this idea safe?” to “What would we learn if we tested this?” That mindset shift, when consistently reinforced by leadership behavior, turns innovation from a one-off hit into an organizational habit.
Common management mistakes that hinder innovation
Even the most well-intentioned executives can unintentionally stifle innovation when management habits reinforce control over curiosity. Executives and managers have to strike a balance between freedom and standards, which can be understandably challenging at times. And they make mistakes.
Over-control and micromanagement
When leaders default to directive oversight instead of leadership empowerment, they send a clear signal: stay safe.
Unfortunately, micromanagement is way too common. In one survey, 79% of employees reported experiencing micromanagement5.
Research and leadership practitioners consistently find that micromanagement suppresses experimentation and creative problem-solving. That’s particularly true in situations where autonomy may be necessary for innovation.
This style of leadership lowers psychological safety, which, again, is key for innovation. It also leads to a poor employee experience, extinguishing any passion. They begin to see their work as a compliance checklist rather than a creative exploration.
Misaligned incentives
Incentives shape behavior. When reward systems emphasize short-term metrics like quarterly profits, cost compliance, or speed to closure, employees naturally optimize for those targets.
That’s not to say that short-term metrics are non-essential. They shouldn’t be the only incentive driving employees. If management rewards only output or efficiency, it creates the illusion that performance is everything, overlooking exploration and innovation.
This mistake plays out across industries from tech to manufacturing:
Individuals receive bonuses tied to hitting current performance targets rather than generating new value streams.
Departments optimize their internal KPIs at the expense of cross-functional, innovative goals.
Managers hoard talent or protect established units because their incentives are tied to existing performance metrics instead of broader organizational innovation outcomes6.
How management can enable innovation
Once executives eliminate the most common barriers, the next step is proactive enablement. The truth is, an innovation culture doesn’t develop organically; it has to be engineered.
In practice, this means executives consistently:
Communicate why innovation matters to long-term growth
Tie innovation efforts to strategic business goals
Reinforce the same priorities across town halls, performance reviews, and funding decisions
Secondly, and rather more importantly, leadership needs to finance experimentation. That means dedicating funds beyond those allocated to the traditional R&D department. And those funds shouldn’t necessarily be tied to outcomes. There should be a reasonable expectation of failure.
Third, management enables innovation by aligning incentives with learning. Companies that explicitly reward experimentation and cross-functional collaboration create long-term growth aspirations for employees centered on innovation, rather than relying solely on quarterly performance numbers or annual bonuses.
Ultimately, it comes down to consistent executive behavior that aligns strategy, incentives, and learning systems. When management treats innovation as part of everyday execution, it becomes embedded in how the company grows, adapts, and competes.
Conclusion: making innovation the ‘culture’
83% of companies consider innovation among their top three priorities7. However, only about three percent of those deliver on those goals.
For innovation to endure, it must move beyond initiatives, labs, or quarterly themes and become embedded in everyday behavior. It has to become the organization's very culture. The role of management in innovation should be one of enablement, where leaders at every level see experimentation as a core ingredient for success and growth.
Work Cited
Forbes. “The Critical Link Between Psychological Safety and Innovation.” 2024.
McKinsey. “Investing in innovation: Three ways to do more with less.” 2025.
BCG. “An Innovation Culture That Gets Results.” 2023.
3M. “Our Global Impact – Sustainability.”
Forbes. “Is Micromanaging A Form Of Bullying? Here Are 3 Things You Should Know.” 2021.
Cornell University. “Talent Hoarding in Organizations.” 2022.
BCG. “83% of Companies Rank Innovation as a Top-Three Priority, Yet Just 3% Are Ready to Deliver on Those Innovation Goals.” 2024.