Want your staff to be innovative? Lead authentically 

Authentic leadership and psychological capital are key drivers for innovation culture and staff wellbeing, particularly in public sector environments where resources can be in short supply, Yvonne Brunetto and Julia Ashton-Sayers from Southern Cross University, and Georgios Kominis from the University of Glasgow write.  

Organisational change can be challenging for employees because it tends to reduce their power and increase their workload. On the other hand, when employees have enough training and support, the longer-term benefit of innovative change can improve some work processes.  

However, the context of organisational change in the public and not-for profit (NFP) sectors can often mean decades of underfunding and in the worst cases, outmoded autocratic management models leading to employees working intensely under constant pressure. These employees tend to experience higher levels of psychological distress and subsequent lower wellbeing compared with the rest of the Australian population.  

Staff need support to be innovative 

It is these same ‘pressure-cooker’ work conditions in which management seeks innovative work behaviour (IWB) from employees to service more of the public with a diminishing supply of resources.  

IWB refers to employees’ readiness and inclination to develop new ideas about how to do their work and translate these ideas into easily useable changes to practices and processes that improve efficiency and effectiveness.  

The ideal conditions for promoting innovation are high levels of personal and organisational support. Employees with effective personal support usually derive this from their psychological capacities which are based on high levels of psychological capital and/or public sector motivation.

Approximately fifty percent of a person’s psychological capacity is a product of their genetics in combination with childhood and early life experiences, whereas the remainder is very much influenced by organisational factors. 

Psychological capital refers to personal capacities such as their optimism and resilience that people can access internally to navigate difficult situations. It is a collection of four psychological states that can enhance well-being and performance—hope, efficacy, resilience, and optimism. 

Organisational support, on the other hand, is derived from supportive management, which also impacts employees’ psychological capital. 

Authentic leadership makes the difference         

Supportive management practices are associated with authentic leaders, who are self-aware and can regulate their emotions. They are able to form trustful and transparent workplace relationships with employees and use their internal moral compass to make both rational and ethical decisions in the workplace.  

These leaders embed a supportive workplace and engage with employees when implementing organisational changes. As such, authentic leadership behaviour is associated with highly productive employees who also have high levels of wellbeing.  

Our recent research has shown that, in NFP organisations, authentic leadership has a profound impact on employees’ psychological capital.  

Together with age factors, authentic leadership and psychological capital then enhance staff’s overall wellbeing.  

As a matter of fact, older workers often have higher levels of wellbeing, suggesting they are more able to work in difficult, austere working conditions without it causing psychological distress. This is welcome news for those countries facing an aging workforce.   

Furthermore, employee age, leadership, and acceptance of change impacted on staff’s readiness to innovate. Interestingly, employees who are accepting of organisational change don’t automatically innovate more at work.  

Building an innovation-enabling culture 

If leaders in NFP organisations are authentic, they create an environment in which employees can build their psychological capital, which will in turn promote an ‘innovation-enabling culture’.  

In general, as supported by previous research, employees with high wellbeing are associated with authentic leadership behaviours where they receive support and adequate resourcing required to do their job. Such workplaces are not common in the public or not-for-profit sectors.  

Governments need to drive change 

Findings from nineteen enquiries and royal commissions over the years have been pushing governments to improve funding and governance models that compromise the quality of some publicly funded services delivered to vulnerable Australians.  

Since it is the government that sets the parameters when contracting out social and health services, public sector leaders need to set appropriate performance and quality indicators, including effective leadership behaviour models and adequate training and support specifications in relation to employees.  

There are many benefits of upskilling employees and management in psychological capacities such as psychological capital to deliver services efficiently reduce their psychological distress. Public sector leaders should make this a priority.  

Read the full article in the Australian Journal of Public Administration.