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This chapter explores the unique role of leadership in organizational innovation. Drawing from the investment theory of creativity (Sternberg & Lubart, 1995), we show that organizational innovation begins with a leadership decision. Based on a review of the creativity, organizational, and leadership literatures, the key components of organizational innovation are examined from individual, group, and organization-wide perspectives. Leading innovation is conceptualized as a special case of leading organizational change, which requires creative leadership skills applied to social systems. Establishing an organizational environment that supports innovation in the current market environment increases systemic paradoxes that must be managed by leaders. We conclude that leading innovation increases the creative demand on the leadership system, which requires leaders who have a developed understanding of the process of innovation and its environmental requirements.

A creative identity, the incorporation of creativity into self-definition, is associated with creative outcomes. Given the importance of creativity to organizational success, understanding creative identity and in particular creative identity work (the formation and maintenance of creative identity) can be useful in understanding creatives within organizations. To be considered creative, individuals need to not only produce unique artefacts, but these artefacts need to be assessed by legitimate judges as being creative. Judges may be within an organization (e.g., senior researchers within a laboratory) or may be external to an organization (e.g., award judges in international advertising competitions). Underpinning creative identity work is the creative assessment, however this assessment is ambiguous and contextual. In other words, what is considered creative in one context or by one judge may not be considered creative in another context or by different judges. The ambiguity of the creative assessment makes creative identity work a precarious undertaking. Based on two case studies – a R&D laboratory and an advertising agency – this research explores the strategies which creative individuals employ in their creative identity work in response to the ambiguity of the creative assessment. This research contributes to the growing area of creative identity research by unpacking three specific strategies used as part of identity work of creatives: defending, emotional distancing and differentiating. These strategies assist the creatives in maintaining a coherent sense of who they are within the organizational context despite the unpredictability of the creative assessment.

In this chapter, we develop a theoretical model of group splits, culture shifts, and creativity in diverse groups. This model explains how the strength of informational faultlines can elicit a culture shift from a desired to an actual culture of creativity in a team, which then might differentially influence team creativity and group performance. We further argue that subgroup support and team creative efficacy may enhance the interaction of informational faultlines with a desired culture of creativity to facilitate the shift toward an actual culture of creativity. We also discuss future research directions and practical implications for stimulating creative behaviors in organizations.

Management accounting and control systems play a relevant role in the creative side of the innovation process. However, the traditional paradigm of this research field focused on optimizing efficiencies in the organization if it runs into problems when confronted with creativity. To progress on our understanding of the role of these systems in creative settings, our assumptions need to be challenged. Studies have to look at new systems and also reinterpret the role of traditional tools such as budgets and incentives. The focus of the researcher will change from the design of the tools themselves to their use and the interaction of these tools with concepts such as inspiration, identity, and social trends. Successful organizations today rely to a larger extent on creativity and innovation to gain competitive advantages and also combine an environment supportive to this new competitive dimension with a relentless focus on execution. They manage this organizational duality of systems to maintain a delicate equilibrium between chaos and routine.

Creativity is increasingly vital to competitive advantage. Leaders are under growing pressure to generate a creative output from themselves and their teams, and human capital managers and consultants are increasingly called to facilitate and build a climate that promotes innovation. Positive emotions are beneficial for big picture, creative, innovative thinking (Fredrickson, 2001; Fredrickson & Branigan, 2005; Subramaniam et al., 2009). Negative emotions create more accuracy, bottoms up neural processing, and problem finding (Forgas, 2013; Forgas & Wyland, 2006). This research investigated if induced positive emotions lead to a higher creative output than negative emotions. An online experiment aimed to induce either a positive or negative mood through video clips before participants undertook a creative task. Personality dimensions were also measured to assess how preferences in information processing impacted creative output. The study demonstrated the efficacy of induced mood and concluded that positive emotions seem to be beneficial for creative output, both quantity and quality. The findings add to the considerable data on the impact of emotions on workplace performance (Amabile et al., 2005) and can be directly applied to learning, innovation, and creative thinking interventions in the workplace. The chapter concludes with a brief discussion of interventions that facilitate a positive emotional climate and how to increase creative potential and performance.

Organizational creativity and innovation are inherently complex phenomena, and subject to a myriad of broad contextual and social influences. As the evidence grows for the link between innovation and organizational effectiveness and, ultimately, organizational survival, there is no doubting the need for theoretical and practical advances in our understanding. The complex nature of these constructs, however, requires that such efforts utilize a multi-level lens. This chapter discusses key aspects of creativity and innovation in organizations, including fundamental construct definition issues, which underscore the need for a multi-level perspective. It also reviews extant theoretical perspectives for their contributions to a multi-level understanding, and the research in two key areas of social influence – group factors and leadership – that have received substantial attention in the organizational literature. The review and discussion of these areas reveal not only numerous advances, but also substantial limitations that must be resolved through more complex and comprehensive (i.e., multi-level) approaches. The chapter concludes with several recommendations intended to guide and inform future work in the organizational creativity and innovation field.