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How HR can drive innovation

Lucy Adams on January 23, 2020

How HR can drive innovation


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Every organisation seems to crave greater levels of innovation.  The organisational responses to an innovation drive usually involve the following:

  • We add the word “Innovative” to our corporate values
  • We set up an Innovation Lab
  • We invite the owner of a tech start-up to speak at our annual leadership conference.

And we try and offer innovation solutions in HR too.

  • We put on innovation training programmes
  • We include “the ability to innovate” in our leadership promotion criteria
  • We adapt our psychometric assessments to try and spot the innovators

Unfortunately, these interventions rarely create truly innovative environments. Indeed, I’d like to suggest that much of what we do in our normal HR practices result in crushing the conditions for innovation rather than creating them.

The conditions for innovation are well documented; the ability to work with autonomy, the psychological safety to experiment, creative tensions brought about by working with people who are different, fluidity of organisational structures, etc. But in HR we have grown up seeing our role as driving cost efficiencies and operational effectiveness rather than creating value through innovation, resulting in our core processes having compliance and conformity at their heart. If we want to play a vital role in creating an environment where innovation thrives, we have a lot more to do.

I’d like to offer four suggestions for setting up HR as a force for innovation;

  1. Re-designing the employee experience
  2. Getting rid of the annual cycle of HR
  3. Moving away from traditional team structures and finally,
  4. HR to remodel itself as an innovator

Redesigning the employee Experience

We need to consider how innovation could run throughout the entire employee experience that we create through our numerous processes, rather than designing these processes in isolation of one another.  Here are some examples:

We need to revisit the way in which we develop our employment policies that currently prescribe what’s allowed and what’s not, in minute detail, to “freedom within a framework” to create greater autonomy and trust. We should revisit our assumptions that long-term permanent hires are a good thing and instead embrace the concepts pioneered by Linkedin’s founder Reid Hoffman in The Alliance, ie: short term assignments should be welcomed as they generate fresher thinking and new perspectives. Our onboarding should be refocused and become less about achieving conformity and more about about understanding what each new employee’s unique contribution could be.

We need to get rid of leadership competency frameworks that promote the idea that leaders must be good at everything and instead focus on identifying leaders who can create the conditions where each of their team can play to their strengths. Our succession planning could change too, to include employees’ suggestions of who they’d want to lead them – resulting in leaders who are different to the ones we identify top down. We should consider how our reward practices encourage our people to experiment and risk failure instead of doing more of the same and hitting target. Here’s a great article by Jacob Morgan on how companies such as P&G and Tata have been experimenting with “failure rewards” recognising that feeling safe to fail is critical for an innovation culture.

If we are serious about equipping our organisation for innovation, then we need to re-think our people policies and processes holistically. Innovation should run through them like a stick of rock.

Getting rid of the annual cycle

We also need to look hard at our propensity to deliver people processes on an annual cycle and how this undermines our organisation’s ability to move at speed. Annual performance appraisals. Annual engagement surveys. Annual talent reviews. Annual bonus schemes. These belong to a more sedentary era.

Companies with strong innovative cultures don’t wait to give feedback until the end of the cycle. They don’t only want to know what their employees think and feel every 12 months. They don’t wait until the talent review process draws to a close to move and promote great people. They don’t wait till the bonus scheme has been calibrated to say thanks. Just because the business results follow an annual cycle doesn’t mean that we should.

Moving beyond the org chart

HR has traditionally focused on, supported and reinforced team structures shown on an organisation chart. Our objectives cascade through these hierarchies. Our engagement surveys measure results within these teams. We calibrate talent, performance and reward within these team boundaries. We assign them an HR business partner who services their needs. But innovation typically comes through the connection of individuals who sit in different teams, across traditional departmental lines or even across different companies. Our rigid adherence to the org chart means that we are less able to recognise innovation potential and definitely less able to support it. Marcus Buckingham has highlighted the problem in his In The Real World blog series, but I’ve yet to see many examples of how HR can adapt to this. Just recognising that innovation will happen through the breaking down of traditional silos is a start but it raises some serious questions about how we collect insight and data (greater use of Network analysis?), how we think about recruitment (building broader talent communities within and outside our organisations?) and how we structure our own HR teams (moving away from the HR business partner model?).

HR as Innovation Role Models

Finally – as that motivational poster says “Be the change you want to see” – we need to be role models for innovation ourselves. We can bring new and fresh perspectives to our work by partnering with teams outside of our domain. We can develop our abilities to experiment, to fail fast and move at the pace of our most demanding clients. We can choose not to wait till our competitors have implemented first, thereby making it “safe” for us to do so too. We can extend our learning beyond attending HR conferences and hearing about best practice in our own field. We can focus on outcomes rather than process. We can segment our markets and try to customise for different types of clients. And we can recognise that it doesn’t have to be perfect – that progress may be better for innovation than perfection.

Creating the conditions for innovation is one the biggest challenges for HR and we need to do so much more than a handful of isolated innovation interventions.

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