As the global economy improves, many progressive HR leaders are focusing attention on better leveraging innovative activities from across the organization. The resulting new level of partnership and support not only enhance existing employee focused metrics (such as employee engagement), but also align HR / Talent more closely with generating direct financial impact and growth to the organization.
This whitepaper provides a high-level overview of how these new approaches can work and steps to consider before proceeding.
As the global economic outlook improves, organizations continue to focus on ways to enhance employee engagement (EE) and retention in order to support aggressive growth strategies. The war for talent is firmly back on the C-suite’s agenda. The pressure is on for HR and Talent leaders to create a culture of high employee engagement, recruit and retain top talent, and enhance direct business value, all within the context of fewer resources at their disposal. A well-developed innovation program can be an essential element to achieving each of these goals.
Workforce engagement levels have essentially remained unchanged over the past 10 years, despite repeated and sustained efforts at improvement by HR and business professionals. A recent Gallup report (The State of the American Workplace, 2013) indicates that 70% of employees within U.S. businesses remain disengaged in their job. Further, the Gallup report indicates that fully 20% of workers are “actively disengaged” meaning that they are “…more likely to steal from their companies, negatively influence their coworkers, miss workdays, and drive customers away”. The calculated cost of these workers in the US alone was estimated to range from $350 – $450 billion per year.
70% of employees within U.S. businesses remain disengaged in their job.
Employee disengagement is especially relevant to the college educated, millennial workforce, who reported the highest levels of disengagement within the Gallup report (72% disengagement rates).
In addition, a recent AON report (2014 Trends in Global Employee Engagement) indicates, “Innovation emerges as a differentiating engagement driver for Millennials.“ Accordingly, innovation is ranked as a top-5 engagement driver for Millennials and top-3 for Generation X and Baby Boomer workers.
The mandate for HR and Talent leaders is clear. What is needed is a new approach to improve EE, retention and recruitment, which better incorporates innovative activities. This should help HR / Talent groups better align with business goals, build a more effective culture and generate leveraged financial impact.
A New Innovation-Centric Approach to Employee Engagement,
Retention & Recruitment
For some time progressive HR / Talent leaders have been focusing resources and attention on supporting innovation activities (often aligned with a centralized program), in order to enhance EE results. In some circumstances, these HR / Talent leaders are supporting existing innovation activities. Others are developing their own innovation-focused activities, often in partnership with Innovation Program leadership.
This new sense of partnership can provide leveraged value to all stakeholders, in ways that;
- Drive business value aligned with corporate priorities,
- Align with the needs of high-potential employees,
- Leverage positive influences across the organization, but with limited management and support resources,
- Actively direct the organization towards a cultural goal, such as a more nimble and innovative workforce, and
- Improve the recruiting “career perception” of the organization. This is especially true for millennials who “want to work for organizations that foster innovative thinking, develop their skills, and make a positive contribution to society.” (Deloitte, The Millennial Survey 2014)
To achieve these objectives, HR, Talent, and Innovation leaders are focusing their efforts on:
This new sense of partnership between HR and Innovation groups can provide leveraged value to all stakeholders.
- Strategic Planning
- Activity Tracking
- Employee Network Development
- Individual Competency Development
In order to build a successful strategic framework for a more innovation-centric engagement approach, HR and Talent leaders, working with Innovation Program leadership, are considering how existing innovation activities support shared goals. As they go through this process, they are asking some key questions, such as:
- Do current engagement measures directly or indirectly incorporate the impact of innovation activities?
- What innovation activities, currently in place, are available to a wide range of employees?
- What additional support could HR or Talent leadership provide to these innovation activities?
- What new innovation focused activities could HR support in order to improve and track engagement?
- What Innovation Program tracking mechanisms can or could be useful to HR or Talent leadership?
An innovation-centered strategic plan around engagement should provide an ongoing framework to guide the development in this critical area. Having this framework align with the goals of various stakeholders (including employees) enables innovation centric activities to be incorporated into tracking engagement efforts.
As part of this process, HR, Talent and Innovation Program leaders are modeling their programs after best– in–class organizations and benchmarking to them. Much has been written about cultures at progressive companies such as Google, Apple, etc. The focus of Talent and HR leadership should also be on studying innovative companies in adjacencies to their current business or industry sectors, so that the examples have more relevance and chance for success. As part of this process, it is important to consider how activities from other organizations will align with the existing corporate culture in their organization. Taken a step further, these leaders should consider actions needed to feed into the development of a broader cultural framework for their organization.
Two thirds of responding organizations depend strongly on innovation for their long term strategy success.
Around one in five (18 percent) rate innovation as their top strategic priority.
Source: “Why “Low Risk” Innovation Is Costly” By Wouter Koetzier and Adi Alon Copyright © 2013 Accenture
Companies are implementing managerial responses intended to facilitate innovation
Source: Why “Low Risk” Innovation Is Costly” By Wouter Koetzier and Adi Alon Copyright © 2013 Accenture
By identifying and aligning the goals of stakeholder groups (Corporate Leadership, Operations, HR and Talent and Innovation, employees, etc.) with a company’s Innovation Program, a more cohesive message is delivered organizationally. In turn, everyone has a clearer sense of company direction and a better under- standing of how and where to add value, in part by identifying new and innovative ideas that have a better chance of success. The resulting new product and revenue streams (or cost saving opportunities) can drive short-term financial performance and in the longer term differentiate the organization in a competitive marketplace.
“Over time employee engagement tracking should focus more on generating direct financial impact.”
Another consideration during the strategic planning process is to account for evolving goals and actions over time. As a culture of innovation matures across an organization, innovation perspectives and criteria should be incorporated more deeply in talent selection, performance management, EE and on-boarding processes. This changing level of activity and expected results should be accounted for in any strategic plan.
Taken further, over time EE tracking should focus more on generating direct financial impact. While HR and Talent groups have tracked the financial impact of EE for sometime, the calculation can often be viewed as tenuous. By more clearly aligning EE with the development of specific ideas (generating positive financial impact) corporate leadership should gain a better appreciation of the value of innovation investment, and the value of EE activities.
Once a strategic framework is in place, HR and Talent leaders are better positioned to recognize how employees interact, at a tactical level, with current innovation activities. This is also a good indicator of engagement, at a macro level, among differing employee populations within the organization.
Tracking employee involvement with innovation activities provides an excellent opportunity for HR leaders to identify individuals who may be driving business value. HR can use this information to recognize and reward those who are champions of innovation. Taken further, it can be an especially powerful tool for HR to support and create alternate career advancement paths for individuals who may not be identified within the standard channels. This is a critical step to drive a more innovation-focused culture, especially when existing channels may recognize behaviors from outdated models of behavior and competence. It is worth noting that several HR / Talent organizations have been testing these approaches on their own staff, as a way to gain additional insight into their own teams, but also to test out their approaches and thinking in a way that limits internal perception risks.
Additionally, strategic thinking can often be one of the primary competencies identified amongst employees who actively participate in innovation activities. Identifying these strategic thinkers within your organization further enables the matching of talent goals to the organizations needs. This also serves to engage a strategic-thinker who might otherwise be functioning in a more process-oriented role, impacting engagement and retention.
Rita Gunther McGrath has written about employees acting as free agents, where they will often move from organization to organization, seeking new challenges and opportunities. In line with that thinking, employees should be given the opportunity to work on the development of their innovative ideas (if chosen for further development). This can be viewed as a way to encourage internal mobility, drive the successful implementation of ideas and further enhance EE results.
Employee Network Development
As part of an innovation centric EE and retention approach, progressive HR and Talent leaders are building consistent and scalable activities to support behavioral change and a longer-term culture of innovation. Discrete, intermediate activities such as innovation challenges are seen as opportunities to create interest and excitement amongst employees. A more consistent application and approach to innovation can aim to generate longer-term changes on culture, employee behavior and engagement.
Progressive HR and Talent leaders are seeking consistent and scalable efforts to support long-term behavior change and a culture of innovation.
Organizations such as Pfizer, Intuit, Qualcomm, Nordstrom, Wells Fargo, Chubb, etc. have, for some time, been building and managing innovation focused employee networks. These networks are designed to support employees that may have a demonstrated interest in innovation thinking. While the style and approach to networks varies amongst these organizations, they all involve active partnership between centralized innovation programs and stakeholders such as HR and Talent groups.
These employee innovation networks include a range of discrete activities that aim to engage employees, including access to exclusive challenges, action learning teams, etc. Importantly however, these networks are supplemented by consistently accessible activities and resources, which seek to change member’s behavior. Examples of activities may include access to resources libraries, training opportunities and regular communication channels, etc.
Innovation training efforts are seen as opportunities to connect individual members and provide them with new skills to drive idea development and business value. Innovation training is most often successful when it incorporates information around the organization’s existing idea development processes and channels.
It also must include an overview and discussion of business priorities so that resulting behavior changes align with leadership’s goals.
While these networks are great at engaging employees, they should also be viewed as developing broad pools of talent that can drive the development of ideas and enhance the associated impact to the organization. This is a more direct approach to linking employee engagement as actively contributing to the future growth and development of the organization.
HR and Talent leadership need to consider approaches that support innovative activities, in order to improve EE, recruitment and retention results (and drive business value). Taking this approach helps generate leveraged success for both HR and Innovation Program groups, as well as the organization more broadly. In addition, it helps draw the HR function closer to driving tangible business value, which has al- ways been a goal, but has often been difficult to achieve or quantify.
By Anthony Ferrier and Heather Hilgart
About the Authors
Anthony Ferrier is a well-regarded executive, entrepreneur, advisor and thought leader on corporate innovation. He has worked with organisations in the US, Europe, Asia and Australia to develop effective innovation strategies that guide organizational change and build cultures that encourage the development of new products and solutions. Anthony has worked with organizations such as Transport for NSW (Australia), Department of Defence (Australia), Bristol-Myers Squibb (US), Fidelity Investments (US), Pfizer (US), Volkswagen (Sweden), Ergo Insurance (Germany), etc.. He currently leads innovation and commercialisation efforts at Swinburne University, and previously led The BNY Mellon global innovation program, as well as co-founding two successful tech-driven consultancies. He has a Master of Commerce (University of Sydney) and Bachelor of Economics (University of Newcastle).
Heather Hilgart is an Organizational Development consultant with Borgess Health in Michigan, where she provides strategic guidance and support to the organization’s leadership. Heather has over 15 years experience in the HR leadership, talent acquisition, and Organizational Development, working at organizations as diverse as Toyota, TravelClick, Wireless Enterprises, and First Data Corporation. She has a Masters of Science (Organization Development and Strategic Human Resources) from The Johns Hopkins University and a Bachelor of Science (Psychology) from Eastern Michigan University. Heather resides in Kalamazoo, Michigan.
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