Rebecca Skilbeck reveals seven key themes that underpin the creation of a culture of innovation
Innovation is often cited as the single most important predictor of future success by many business leaders. Yet many companies struggle to achieve innovation-led growth.
The ability to innovate, adapt and respond with agility to consumer demands is a business-critical imperative. Highly innovative companies are first to market with new ideas. Whether innovation is about advancing products, processes or services, ultimately it is about remaining relevant in today’s fast moving environment.
I started my career as a scientist – creative thinking, experimentation and a fail-fast to succeed mentality are entrenched in my psyche. This early grounding to problem solving and working has continued to shape my approach to work. Many years on and I’m fortunate enough to work for a company that embraces agile practices. A collaborative, cross-team approach with a strong customer focus shape our way of thinking and working at a company-wide level. Yes, it’s a software company, but increasingly we are seeing many other industries adopt agile practices or design thinking in a bid to become more competitive.
So how pervasive has this idea become?
In our recent Global HR Innovation Study, themed, Driving a Culture of Innovation, we surveyed more than 320 organisations, including HR professionals across Australia, Asia, the United States and Europe and assessed their ability, and preparedness, to achieve sustainable, organisation-wide innovation.
The results highlight seven key themes:
1. Culture is more than corporate values: it’s how we do things around here
When it comes to innovation, we found many companies are talking the talk, but are not walking the walk. In-fact, three-quarters of organisations encourage creativity and innovation as a corporate value, but for many it wasn’t underpinned by other aspects required to create a thriving culture of innovation. Less than half (48%) promoted risk-taking and entrepreneurial behaviour. Only 57% felt confident their organisation created an environment of trust in which employees could challenge existing assumptions, try new ideas, and fail. Leadership is also key – as one respondent stated “if we don’t coach leaders or cultivate culture, innovation will become a motherhood statement with little traction”.
2. Framework, process and technology underpin company-wide innovation
Not all ideas are created equal and history is full of good ideas that ended up gathering dust on a shelf. Innovation as an organisation-wide phenomenon requires widespread use of technology and structured processes. Not surprisingly, we found nearly two-thirds of companies had adopted technology to support innovation. But more than the latest technology is needed – how do companies identify and develop ‘the one’, the idea that will catapult them ahead and leave competitors in the dust? The answer is process and frameworks. Yet, although 54% of companies had a process for submitting ideas, less than 40% had established processes for prioritising ideas and just over half seek and incorporate feedback to improve outcomes. Without frameworks for developing, prioritising and refining, companies will struggle to scale and commercialise ideas.
3. HR has a role to play in driving innovation…but is not delivering
Driving innovation in the next 12 months is an organisational priority for nearly two-thirds of companies. Does HR have a role to play in supporting innovation? The good news is the majority say “yes”. But is HR currently driving company-wide innovation? Nearly half of non-HR professionals think HR currently adds no, or negative value, in driving innovation. The challenges for HR are real. As one respondent commented, “HR is often road blocked by other departments and stakeholders who place other tasks and processes as a priority over culture, engagement and innovation”. HR can shift the perceived value proposition and close the gap, but they can’t do it alone - support from business leaders is needed.
4. Recruitment beyond diversity is key to building future workforce capability
Diversity of thought accelerates innovation. When individuals have different experiences and points of reference it is easier to challenge pre-existing frameworks and assumptions. Two-thirds of respondents work within organisations that promote diversity of thought and have established recruitment practices to build a diverse and inclusive culture. As one survey respondent put it, the challenge is of course for leaders and teams not to become homogenous over time and subconsciously discourage diversity of opinion. Feedback from our clients, however, indicates HR is well versed in the need to balance out this tendency.
But more than diversity is needed to future-proof the workforce. While less than half of the survey respondents said they currently recruit based on capabilities such as learning agility, innovation and collaboration, this trend is likely to gain momentum. Similarly, feedback from clients indicates a shift towards recruitment based on attitude and behaviours “because skills can be taught”. This is something we expect to see more of in the future.
5. Learning and development can build innovation capability
Innovation is a way of thinking. Contrary to popular belief, although some individuals are naturally innovative or creative thinkers, it’s a skill-set that can be taught. A sustainable culture of innovation has everyone innovating. Company-wide capability requires training in innovative thinking, processes and frameworks, yet very few companies had established practices in place to support the development of such skills – only 28%. This represents a huge opportunity for HR. In a similar vein, established development practices to support a cross-functional approach were limited. Again, this is an opportunity HR should embrace – job rotation, secondments and mentoring are effective methods for fostering innovation. The reason? They drive collaboration and knowledge sharing with insights gained from employees, customers, suppliers and competitors.
6. Performance management – more than reward and recognition
The importance of recognition and reward in driving a culture of innovation cannot be overstated. Although 53% organisations say they recognise and reward innovation only 38% had established performance management practices for doing so. This suggests companies are willing to adopt innovative processes without the endorsement or participation of HR. The good news is organisations understand the importance. The challenge for HR is to embed innovation into the entire performance management process, including objective setting and continuous feedback - innovation cannot be truly optimised without ongoing, iterative feedback. However, despite a market shift in emphasis from annual performance reviews to continuous feedback, we found a majority of companies aren’t there yet.
7. Future-proofing your workforce – the role of talent mobility
Talent mobility is critical to HR’s ability to dynamically develop and align the current and future workforce to strategic business needs. Yet, this was the area in which HR had the least traction. Leaders are being developed to drive company-wide innovation – but not necessarily through HR-led initiatives. The ability to quickly bring together high functioning teams is a hallmark of innovative companies. According to our research, HR has limited traction in this area - established processes for moving talent between roles and visibility into current skill gaps are areas where HR should focus its efforts. New models of working such as flexible work arrangements and the gig economy mean resources are no longer necessarily ‘owned’ by the company. The ability to source from internal and external networks of talent, creating agile and adaptable workforces, to respond changing market conditions will become increasingly more important, putting pressure on HR to think differently about how their workforce can continue adding value to the business’s bottom line.
Rebecca Skilbeck is Head of Customer Insights and Market Research, PageUp
For a full copy of the PageUp Global HR Innovation Whitepaper click here: Driving a Culture of Innovation or visit www.pageuppeople.com and head to the Resource Hub.