The topic of leadership is critical today as leaders' decision-making processes affect political, social, and economic conditions globally. Considering market fluctuations and shifts, political uncertainty, environmental threats, and global societal issues, the question of leadership is at the heart of issues faced today as leaders impact people at all levels of society. The discussion regarding leadership has centered on the need for high-level critical and creative thinkers and has shifted towards academia as a source for innovation. Educational institutions are under a high level of scrutiny and pressure to prepare graduates effectively for a volatile and unpredictable global market, yet the educational model has been slow to change and adapt to market conditions. This study identified the relationship between the institutional environment, leader's traits, and divergent thinking to provide insight into the characteristics that drive innovation in the academic setting. The research involved a large-scale national study of college and university leaders and focused on leadership traits, divergent thinking, and innovation. Findings indicated negative relationships between the demographic attributes of gender and level of education, and innovation. Leaders with the traits of "Conscientiousness" and "Lack of Emotional Stability" negatively impacted innovation and institutional characteristics of location and type negatively affected organizational creativity. There was a significantly positive relationship between the institutional environment and three measured levels of innovation. [The dissertation citations contained here are published with the permission of ProQuest LLC. Further reproduction is prohibited without permission. Copies of dissertations may be obtained by Telephone (800) 1-800-521-0600. Web page: http://www.proquest.com.bibliotheek.ehb.be/en-US/products/dissertations/individuals.shtml.]