Five leadership mistakes that kill innovation

The World Intellectual Property Organisation (WIPO) recently published its annual Global Innovation Index, ranking 139 countries on how innovative they are. Norway landed in 20th place, the same as last year. Behind what looks like a solid position is a negative picture that raises concerns about Norway’s ability to grow in the future.

We are the weakest among our comparator countries. Sweden is in second place, Finland seventh, and Denmark ninth. We are also among the least efficient countries in the world when measuring input versus output. Norwegians are highly educated; we have vast resources and the world’s best infrastructure to support innovation – yet we are shockingly poor at converting this into actual value. For example, we produce far fewer unicorns, patents, trademarks, and designs relative to GDP than our neighbouring countries.

There are many reasons why this situation has arisen, but the solution doesn’t have to be complicated. Here are five common mistakes leaders make when working with innovation – and what they should do instead:

1. They let customers drive innovation

Many leaders ask customers to tell them what they want – features, improvements, details. The problem is that this leads to small changes that don’t necessarily drive radical value creation. Customers rarely know what is possible or what they truly need. Instead, ask: “What is the customer trying to achieve?” When you understand the customer’s goals, you can build solutions that are dramatically better – not just slightly different.

2. They chase growth

Many leaders are dazzled by growth and market share, overlooking that growth without profitability is dangerous. In industries without strong network effects – where being first and biggest is crucial – this is often a recipe for making a loss. A better path is to build profitability in a niche and grow from a solid base. Profitability gives control, flexibility, and the ability to scale further.

3. They compare innovation to core operations

Innovation requires a different mindset than operations. Leaders who see initiatives as too radical, challenging for the strategy, or outside the core focus should ask: “What happens if it works?” – rather than dismissing the idea outright. Innovation should also not be measured by the same criteria as the core business. If you measure innovation by revenue, margins, and risk, it will always look expensive and a poor option. Instead, use dedicated metrics like the number of hypotheses tested, insights generated, and speed of learning. Some companies set up separate units or entities with independent governance and reporting – precisely to protect innovation from short-term thinking.

4. They micromanage the innovation process

Innovation requires autonomy. When leaders want to control the process from A to Z and be involved in every decision and approval, they slow down progress and kill initiatives. Instead, organise innovation in cross-functional teams with a mandate to test, learn, and develop. Leadership should set the direction and evaluate at defined milestones – not micromanage along the way.

5. They assign skilled specialists to lead innovation

Innovation requires more than competence – it requires drivers. Too often, people with strong operational experience but low willingness to change are put in charge of innovation. The result is cautious improvement, not real reinvention. Those who succeed, appoint people with creativity, execution power, and a growth mindset to lead the work. They can think differently, tolerate uncertainty, and push projects forward without clear boundaries. These are not always the most experienced – but those who are the most curious and the boldest.

At PA Consulting, we see companies that succeed with innovation often establish dedicated innovation units and processes with cross-functional teams, separate budgets, and clear mandates.

Innovation is not a luxury – it is a survival strategy. Norwegian business has both talent and capital. Now action is needed. The gap between our Nordic neighbours can be closed, but it requires smarter leadership.

Read the article in Finansavisen in Norwegian.