Current Issue

LEADERSHIP AS A KEY ENABLER DURING ORGANISATIONAL INNOVATION IN A VOLATILE ENVIRONMENT

Dr. Dzingai Katsamba

The Davinci Institute of Innovation and Technology

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Abstract

Background - Leaders play a vital role in facilitating innovation in organizations. The ever-changing external environment requires leaders who are agile and are not comfortable with sticking to traditional routines. Leaders who realize that everyone in the organization plays an important role in driving innovation, can achieve results and drive success. This article looks at the various aspects of leadership and how they facilitate innovation during a volatile environment like the Covid-19 pandemic period. The question is, whether leadership that drives innovation is important during economic turbulence and how it is critical for long term survival and growth during a  crisis.

Purpose - The purpose of this paper is to demonstrate the application of a model which helps in the understanding of the extent to which leadership can be used to capacitate  multinationals in South Africa and beyond to develop strategies which enable innovation to enable growth and survival in a volatile environment like the Covid-19 pandemic. The outcomes of this provide a tool to ensure survival and growth in subsequent volatility. 

Results - Models generated show that an organization will have an increase in revenue, an increase in profit, a return on investment, a return on equity, a return on assets and positive bottom-line if organization innovation is implemented through active leadership. Survival and growth will be possible through a robust change management, culture that support innovation, good communication channels, clear strategic direction, a strong focus on problem solving, leadership commitment and support and incentives coupled with rewards. The recognition of organizational innovation as a necessary activity for business will also ensure sustainability. If the organization does not align its strategies and activities to organizational innovation, then failure is imminent.  This stagnation or reduction of revenue may lead to the closure of the business if it fails to cover fixed costs for a protracted period. 

Methods - Financial indicators were used as predictors of survival and growth if Leadership, OI and BMI are used with their associated factors. To evaluate the relationship between the constructs OI, leadership, and BMI toward survival and growth, a series of discriminant analysis models were estimated. The constructs survival and growth consist of different financial indicators, including revenue, profit margin, return on investment (ROI), return on assets  (ROA) and earnings before interest, tax, depreciation and amortization (EBITDA). Models were run to optimize model fit. The standardized canonical discriminant functions which were used were significant and the correlation coefficients were high. 

Conclusions - The findings from the literature, the qualitative and quantitative outcomes, lend credence to the effect that organizational innovation will help companies to survive and grow despite volatility in the environment if there is a strong leadership.

Key words: Organizational-innovation, leadership, business-model-innovation, crisis, volatility, survival, growth.