To innovate for an increasingly diverse customer base, Mastercard’s employees needed to grow and diversify their core while also building new businesses. But at the time, those employees ranked “innovation” 26th out of 27 factors important to the company’s future success. Something needed to change, both internally and in how the company collaborated with the customers, communities, and governments it wanted to serve. So Banga tasked one of his executives, Garry Lyons, with infusing Mastercard’s culture with innovation. With a significant incremental investment, and free rein to spend it as he saw fit, Lyons accepted the opportunity to be what Banga described as a “catalyst of change.”

To create that change, Lyons developed Mastercard Labs, a global R&D network designed to show employees, customers, and stakeholders, in his words, the “art of the possible.” During Banga’s 10-year tenure Mastercard Labs was instrumental in accelerating the company’s transformation from a nonprofit association of banks to an independent global technology company in the payments sector. As a for-profit corporation, it saw its market cap grow by more than 360%.

This story comes from a new business-case series that one of us (Linda) taught to a group of high-potential executives at Harvard Business School. Even though the class knew how the story would turn out, only three students out of 85 said they would have accepted Lyons’s position. By the end of the class discussion there were a few more recruits — but also an entire blackboard filled with all the formidable barriers to innovation that Lyons faced. Although the participants lamented the pressures of short-termism and organizational inertia arising from age and size, their most fundamental concerns were the emotional and intellectual challenges inherent in innovating at scale.

Their reluctance to step into a challenging but necessary leadership role gave us pause. Their nervousness wasn’t unwarranted: In the twenty-first century, leadership has become harder as stakeholder expectations have increased, global execution has become more complex, digital transformation has become an imperative, and innovation is ever more critical to sustained success. But according to our research, the type of leadership the world needs today is what Banga and Lyons embody: a mixture of skills that spark innovation within an organization and across external organizations and ecosystems.

In this article we will explain how various streams of research over the past decade led us toward this discovery. We will examine the characteristics of this new type of leadership — characteristics we describe using the terms architect, bridger, and catalyst, or ABCs — and why helping more individuals develop an innovative mindset and skill set is so crucial for the future of business and society.

What Great Leadership Means to HBR Readers

In this article we will explain how various streams of research over the past decade led us toward this discovery. We will examine the characteristics of this new type of leadership — characteristics we describe using the terms architect, bridger, and catalyst, or ABCs — and why helping more individuals develop an innovative mindset and skill set is so crucial for the future of business and society.

[Here’s the first two key points.]

Leading Innovation: Collective Genius 1.0

For the past 20 years, in collaborations with young researchers and executives, Linda has been conducting longitudinal on-the-ground research on leaders at the cutting edge: those who have built organizations that can innovate not just once but routinely. In 2014 Linda, Greg Brandeau, Emily Truelove, and Kent Lineback shared initial research in their book Collective Genius, which explored the intersection between leadership and innovation.

With hindsight, it’s clear that this book captured a paradigm shift in what makes for great leadership within organizations. The business world was moving into an era in which agility, innovation, and digital technology were key drivers of competitiveness. In this new world the job of leaders was no longer about getting others to follow them into the future; instead it was about inviting others to co-create the future with them — a process driven by teams composed of individuals with diverse expertise and experience who were willing and able to collaborate, experiment, and learn together.

All the leaders in the book were visionaries who knew that innovation was rarely the result of an individual genius’s having an “aha” moment Consequently they adopted an inclusive definition of leadership and did all they could to democratize innovation. They believed that everybody had a “slice of genius” — their talents and passions — that could be unleashed and leveraged to develop innovative solutions to stakeholders’ pain points and ambitions. They successfully managed the paradoxes of innovation: supporting bottom-up creativity, initiative, and improvisation while establishing structures, performance metrics, and guardrails to minimize outsize risk-taking and keep people aligned. They also removed barriers to innovative problem-solving and built what we called “community cultures,” in which members were bound by a common purpose, shared values, and mutual rules of engagement that served as the foundation for co-creation.

Instead of being at the front of the stage, showing others the way, these leaders learned to set the stage and create an environment in which others were willing and able to do the hard work of innovation. That required emotional resilience, courage, and patience to amplify diversity of thought and navigate potential conflict, experiment and iterate a path forward with many false starts and missteps along the way, and hold options open so that even opposing ideas could be integrated in creative and useful ways.

Scaling Genius: Collective Genius 2.0

After the publication of Collective Genius, Linda continued to explore questions surrounding co-creation. She joined with Emily, Jason, and Karl to conduct qualitative longitudinal studies of leaders in 18 countries and 21 industries whose ambition was to transform their organizations into innovation engines. Linda and Emily also partnered with Sunand Menon and Ann Le Cam to conduct executive roundtables in three dozen countries and survey more than 1,500 executives in some 90 countries about key leadership challenges and opportunities in the digital world.

When these two research streams were brought together, what stood out the most was how successful leaders were able to build not only innovative organizations but also networks and ecosystems that could co-create across organizational boundaries. These people mastered what we have come to describe as “scaling genius” (the working title of our upcoming book). In doing so they took on three interconnected functions: architect, bridger, and catalyst.