Innovation is in need of a significant transformation on how it is designed, developed and executed in most organizations. Traditional approaches to managing this simply need ripping up and redesigning to allow innovation to become more the central core.
In most organizations the Human Resource Management (HRM) function seems to have been far too often side-lined on shaping and influencing how innovation should be designed as a critical part of the future for the company. Many of the existing traditional HRM solutions might actually be in conflict and working against innovation actually.
If we look at the broad areas that HRM has to cover and master in organizational development today, it can, perhaps, leave little time for adding in innovation into this array of demands. You can understand that HRM has little time to master a ‘decent’ understanding of what makes up innovation, when they are grappling with so much already but they should. It might simplify or promote a rationalizing of some of the existing practices built up over considerable time as the expedient option but this is still creating a ‘lagging’ set of effects and not offering the ‘leading’ ones that innovation demands.
Today’s HRM role is demanding and complex, no question.
Let’s firstly remind ourselves what does make up a current HRM role in leading or participating in many crucial areas needing constant attention. These include planning and designing and the executing of change management, seeking out potential leaders, participating in career development and recruitment, managing organization capability and effectiveness in all its different demands called for across a diverse demanding organization.
This goes along with seeking out different designs to team building, organization transformation, building knowledge and talent capacity, let alone the classic payroll, reviews and turnover questions brought on by volatile markets, change of directions or global expansion.
I could add more but organizational development is an extremely tough, challenging and pivotal role, often under-appreciated and struggling to gain their rightful seat at the top table.
Adding innovation as a simple add-on will not work
So adding onto this veritable list of tasks we are appealing for a different approach and more focus on innovation, maybe a little unfair because it is unlikely to work. I believe HRM should have a new raison d’être making innovation the central, repeating theme running through of all the activities currently being undertaken and mentioned above.
Presently HRM is little involved in the current innovation process where innovation is focused on developing and designing new products, services and often even excluded from the design of new innovation business models to find the best ways to break these out from existing organization design so they thrive and not just survive due to patronage alone.
The management of human resource needs to be replaced with the management of human creativity and ingenuity, as this is the triggering point to innovation success. The critical role of innovation is without question needed for the future growth, wealth creation and organizations potential survival. Who is to drive the human change required here? I believe HRM should have a lasting design impact and central engagement role in this.
HRM has a crucial role to play in the needs to facilitate and underpin top-line growth through innovation design and bottom-line impact through risk balance and control as people are the essence of innovation. Individuals gain (new) insights, they offer idea generation and the capabilities to implement these through the designed innovation process as new introductions into the world that improve on the existing. HRM needs to make sure this is well supports and happens by ensuring the people factor is well designed into the organization, in every activity for making innovation the ‘way of life’ and well understood as corporately vital to be well support and consistently enhance in capabilities and capacities.
Reversing the current organization design
Over the past few decades, even the past century it has been the organization ‘knows best’ and decides and passes down, the teams are then resourced and empowered and the structure is put in place for the individual to deliver. Today that is not working well.
Going forward this top down approach will simply not work. In the case of innovation the reverse actually applies. The germ of an idea or insight starts with the individual connecting different strands of knowledge and combining these in new and often novel ways. Then they must go and convince others of its value, so they will support this and turn it into a project. This then needs to move up the organization for others to come on board to offer the necessary means, resources and support to achieve the eventual outcome.
Failure to move potentially exciting but ‘raw’ ideas into projects, then into reality by attracting required resource is becoming crucial to be managed. Recognizing this essential shift of bottom up is crucial in organizational design for skill development and approaches throughout the organization.
If we take just one example, the failure to take ideas forward as one area that needs to be treated differently than the current traditional judgement or measurement metric of valuing only ideas just going through the pipeline. If we value experimentation, prototyping and piloting of innovation ideas that did not fully work out or got combined or re-scoped, we can begin to see experiences gained, challenges resolved, obstacles overcome as learning points. This gives a different measuring approach that can reverse current design and reward and show the increasing value of exposure, practice and understanding as accomplishments that build deepening capabilities and highly valued in experiences.
We should be looking for the knowledge and insights gained as part of the robustness of the pipeline. This is one area where HRM can design innovation differently and intervene so as establish the impact of learning as one of the factors to enhance innovation capability. There are many of these intervention points that have a catalytic effect.
Those that attempt innovation gain valuable experience
If HR took innovation into the core of organizational design, the mandate for each person is to get involved in innovation activity to gain valuable experience that enhances the desired capabilities for the future. If innovation is seen as core, you begin to break down the present barriers and mindsets that restrict innovation today by current behaviours, blocking innovating activity or placing constraints in allocating the required resources to ‘allow’ innovation to flourish.
HRM plays the critical role in breaking down the existing barriers (cultural, environmental, structural) and determines the need for information and knowledge sharing to actively lower one of innovations greatest barriers today, the not invented here, that existing within organizations both in themselves and in opening up to external new sources of stimulus. HRM can find clear ways to foster innovation in more open ways.
Moving beyond today’s traditional competencies
In many organisations HRM are adapt at, or certainly working hard at the assembling, managing and deploying of resources to support the work-to-be-done. They pride themselves on managing labour costs, evaluating workforce performance, enhancing productivity and focusing on retaining valued talent. These are well within themselves but are simply not enough in such changing market conditions. They are reinforcing effectiveness and efficiency and these alone are simply not enough for securing the future, it is through innovation and creativity that is urgently needed to be added.
Future leaders need to emerge not from managing existing assets well but in managing in increased uncertainties, being more adaptive, agile and responsive to changing needs. CEO’s are demanding creativity, flexibility and speed to size up, quickly seize and grab breaking opportunity. These newer demanded skills come from knowing how and where to go, to be well-connected across platforms of knowledge, having close client connectivity and being able to extract all the essentials, resources and commitments to enable execution. Adaptability to constant change has a very different mindset to be developed in our future leaders.
The changing role of organization design
There is a consistent need to sustain and secure a steady top-line and bottom-line growth, CEO’s tenure is mostly based on this. What is increasingly needed is to go beyond this expected ‘state’ and deliver the ‘wow’ factor, which comes mostly through innovation. Here top managers have to seek out speed, flexibility and adaptability as outlined earlier in this article but they also need to go beyond this.
Managers need to find the right ways to stimulate innovation in creative and systematic ways and encourage entrepreneurship, more reciprocating in the transfer of knowledge, ideas and practices for pushing across boundaries for value creation opportunities. We come back to the ability to extract new value is in the individuals identifying, assimilating and exploiting knowledge and it is in recognizing this reverse flow, is where the HRM role needs to focus on a different organizational design.
For me building absorptive capacity is crucial and HRM needs to focus far more on understanding the value of this. I loved one suggested description on the absorptive capacity model. Absorptive capacity is like the alternating current, whereas development capacity is the direct current. Combining this into a AC/DC innovation model then Innovation becomes the ‘power provider’ to growth requiring both currents, with one, a direct current flowing one constant way, whereas alternative current flows one way, then the other, continually reversing direction for knowledge generation that acquires, assimilates, transforms through exploitative learning. HRM needs to leverage ‘exploitation learning’ as a real need for building the power into innovation capability.
HRM needs to be on the cutting edge of innovation
HRM does need to step up and define a new mandate for innovation. If innovation is ever going to achieve a core place within organizations it has to be deliberately designed in for skill definitions, leadership development and knowledge and experiences gained. HRM needs to cultivate, mobilize and capitalize innovation.
To do this it needs to redesign its existing practices and approaches so at least four critical aspects become established as the starting point and way forward while a deeper understanding of innovation is gained:
- Recruiting always people for the potential to innovate and knowing what this means in inputs, outputs and expected organizational outcomes.
- Nurturing individuals and teams constantly in innovation capabilities and skills and setting about designing a comprehensive programme for this to take hold and stick.
- Recognizing and discussing in formal ‘learning ways’ the critical factors needed for success and equally acknowledging and recognizing the learning value of the failures. Valuing both in experiences and organization outcomes.
- Build on going diversity into teams, resourced across the organization, augmented with external resources as and when needed, so the teams are varied, distinctive and constantly changing and exchanging experience and are delivering innovation that makes a real difference to the future of the organization.
If this means employing external mentors, coaches and innovation expertise to bring HRM up to speed, then it is well worth it. Having a dedicated external resource to work with you in HRM has the same ‘outsourced value’ as many other activities deemed to be handled by specialists, receiving the support and inputs to your needs that makes sound economical and knowledge intensive sense.
Care of course, is in finding those that have the depth and breadth of required experience to work alongside you, to build up and transfer the appropriate understanding of those innovation needs, until it has been ‘embedded’ within HRM so it becomes fully absorbed and part of the daily fabric of the organization as a new core, well supported and constructed to deliver sustaining innovation.
HRM has a stark choice
HRM needs to take on a more pivotal role for innovation. They can become central for a lasting place to plan and significantly contribute to building innovation capability and capacity or stay more passive and operate always in the outer periphery of today’s and the future corporate relevance that innovation needs to play.
I believe HRM needs a new raison d’être, one that comes from grabbing hold of innovation and making this core to the organizations future design. Building capabilities and capacities for innovation are essential to our organizations future well-being and HRM needs to step up and become far more engaged.