Of the obstacles innovation faces in companies, perhaps none is bigger than leadership itself. While it is human nature to be resistant to change, company leaders who resist new ideas can easily lead their companies on a path to destruction. They can also provide too little guidance to their team on what initiatives to pursue.

Keeley recommends that company leaders draft an "Innovation Intent" -- a statement that creates a "vivid goal" for employees to pursue. A prime example, he writes in "Ten Types of Innovation," was President Kennedy’s 1961 call to land a man on the moon by the end of the decade.

Leaders need to be curious and open to new ideas and to respect the talents of the people in their organization, says Cynthia Ridley, a consultant with innovation consulting firm Kalypso.

"When you bring someone in for their ideas and thinking and the leader above them has a closed mindset, you diminish that person’s contribution," she warns. "Not only do you miss the opportunity that would have come from those ideas, but those people start shutting down."

One of the problems, Ridley says, is that a culture that does not support innovation can easily harbor managers who suppress new ideas. "Day to day, those innovative ideas get squelched," she says. "It happens in the middle of the organization where executives never know a great idea was shut down. It never surfaced."

To help ensure success with innovation, companies should have a strong focus on their customers, says Ridley. Companies can become mired in infighting or focusing on ways to honor their founders rather than keeping their efforts directed at helping customers, she says.

Customer focus is at the core of a cultural transformation that Ashish Kulkarni is leading at Celanese Corp. (IW 500/152), a $6.4 billion chemicals firm based in Dallas. Kulkarni, Celanese’s chief technology and innovation officer, says whatever activity Celanese employees are engaged in, some aspect of it should be linked to serving customers.

To do that, he says, employees should never feel they are the "lone ranger," but rather part of a collaborative team where they can range across the company to find the skills they need to solve a customer’s problem. "Innovation is a cross-functional sport," says Kulkarni, and part of the change at Celanese has been to break down barriers between businesses.

While some companies rise on the ideas of innovative leaders, it may be far more important for leaders to serve as "multipliers," says Ridley, referencing the book of that title by Liz Wiseman. Ridley says these leaders don’t have to be the smartest person in the room, but rather ask brilliant questions and challenge their people. 

"It is getting people to let go of that ego place of owning an idea and having to have it be right. I am sharing my idea, but I’m not attached to it," says Ridley. "It is a whole different dynamic."

Along with encouraging ideas, company leaders need to ensure that they create an environment that tolerates "smart mistakes," says James Cusumano, who left a successful career as a research scientist at Exxon (IW 500/1) to help found Catalytica in 1974. The firm, which uses molecular engineering to design catalysts, eventually grew into a $1 billion public company with divisions in clean energy and pharmaceuticals.

Cusumano, author of "Balance: The Business-Life Connection" (SelectBooks), points to a host of successful products such as Teflon, Post-It notes and Viagra that developed out of research efforts that were initially deemed failures.

"There must be a tremendous amount of trust in the organization," says Cusumano. "There can’t be a fear of failure or of retribution. Employees all the way through the organization need to say, 'This is a fair organization. They are really interested in innovation and have a passion for it.’"

Just as importantly, says Cusumano, companies need to be sure to reward innovation. "The most difficult thing is to do it fairly. My definition of innovation means you take something new to marketplace and get a return. Usually in a manufacturing company, it is a financial return. How do you then decide who gets a piece of the pie? We did it by interviewing a lot of people on the teams. As the company gets larger, the innovation can be spread over a number of people, so you have to do your damnedest to reward people fairly."

While leaders should value innovators, says Ridley, that doesn’t mean that other roles in a manufacturing organization are any less important. She says some people are born to be innovators, but company leaders must surround them with people who can turn those ideas into reality.

"There are always going to be people who are more comfortable delivering the day-to-day operations and they are great at that," says Ridley. "They are not comfortable with uncertainty or risk, or creating structure out of risk. That’s okay."