Leaders play a crucial role in cultivating an environment where team members feel empowered to take smart risks, explore new ideas, and comfortably push boundaries. There are several key things leaders can do to enable this type of innovative culture.

First and foremost, leaders must clearly communicate that risk-taking is part of the job and that failures will be seen as learning opportunities, not punishable mistakes. They need to get this message across repeatedly through both words and actions. Leaders should praise attempts that didn’t work out as well as successes, to reinforce the idea that trying new things is valuable in itself. They also need to model risk-taking behavior themselves and be openly willing to discuss failures as well as triumphs. By demonstrating this mindset, leaders show that risk is simply part of progress.

In addition to embracing failures, leaders must empower teams with autonomy and accountability. Give team members ownership over projects and space to experiment independently, but also hold them responsible for results. Respecting teams as knowledge workers able to self-manage shows confidence in their judgement and capabilities. Providing autonomy over workload boosts morale and engagement, freeing up mental bandwidth to consider untested paths. Holding teams accountable for outcomes, not processes, gives permission to break from rigid controls if there is a reasonable hypothesis something new could succeed.

Related to autonomy, leaders should encourage fluid collaboration across functions and remove barriers between departments. Silos tend to breed risk aversion as teams focus narrowly on their pre-defined roles. By promoting open communication and an integrated mindset across the organization, new combinations and fresh perspectives are more likely to emerge. Leaders can seed cross-functional projects, rotate team members between roles periodically, and make themselves highly accessible to all levels of the organization. A fluid, barrier-free culture helps risk-taking spread organically.

In addition to process changes, leaders need to allocate budget and time specifically dedicated to exploration. Carving out a defined R&D function with its own resources says risk is an institutional priority, not an afterthought. “Skunkworks” teams operating with a looser mandate can experiment freely without production pressures. Allocating dedicated hours every week for employees to work on passion projects shows intellectual curiosity is valued. Financial support and dedicated space for trying new ideas conveys risk is an expected, budgeted cost of business.

Leaders also play a key role in selecting and developing people who show entrepreneurial traits. Look for curiosity, resilience, collaboration over ego, and enthusiasm for experimentation during hiring. Foster these skills internally through stretch assignments, coaching that emphasizes process over products, and empowering ambitious ideas early on. Structured development of entrepreneurial mindsets supplements process changes and makes risk a sustainable part of the organizational DNA over the long term.

Regular communication keeps risk-taking top of mind. Leaders should highlight initial concepts that led to major innovations, no matter how rough around the edges they began. Relatable success stories that started messy and uncertain inspire others to persist through inevitable failures. Sharing metrics like the percentage of revenue from products/services less than two years old demonstrates risk is tied to competitiveness. Regular “state of the experiment” reports raise the profile of R&D and exploration efforts. Consistently reporting progress keeps teams motivated by showing their attempts at disruption are valued contributions regardless of outcomes.

Leaders play a pivotal role in cultivating an innovative, risk-taking culture by embodying and communicating an enthusiasm for smart risk; empowering teams with meaningful autonomy and accountability; removing barriers and silos that breed risk aversion; allocating dedicated time and resources for exploration; developing entrepreneurial talent; and keeping risk-taking visible through regular communication. By embracing failures, freeing up teams as knowledge workers, and making risk an expected budget item, leaders show their organizations that pushing boundaries is how true progress is made.