By: Anthony Ferrier / Fiona McLean
The increased focus of mature organizations in developing a more innovative culture and set of actions is a crucial opportunity for HR / Talent leaders to play a leadership role. This whitepaper examines a range of actions that HR / Talent leaders can take to drive this strategic imperative.
With constant radical disruption being the new norm in every industry sector, the only option for survival is to expect and demand innovative action from employees at all levels of an organization. These changing expectations impact how leaders recruit, engage and drive value from their employees, as they are now an even more crucial component in driving innovative action, impact and eventual survival. Within this environment, corporate innovation efforts represent a crucial opportunity for HR leaders to take a strategic leadership role. So the question is, why aren’t HR leaders consistently driving this conversation?
Business leaders, especially within the HR / Talent area, need to think and act differently in how they drive value from their employees, taking into account the following perspectives:
- Approaches to engage and drive value from employees is changing – Employees (especially millennials) have different career expectations, but workplaces (often for incumbent organizations) can fail to respond effectively. Candidates have changing career expectations, where they now value experiences, experimentation, autonomy, social impact, leadership capability, skills acquisition and “zigzag’ career ladders. This contrasts to engagement models of mature organizations that are often built around brand value, hierarchical career development and long employment periods. Talent and employee attractions strategies that effectively address these changing expectations are more likely to win the talent war, creating a competitive advantage in a disrupted business environment.
- Innovation is maturing and shifting towards employee capability building– The innovation function is underpinned by capabilities including complex problem solving, curiosity, and creativity. These have historically been less valued as technical skills within organizations, but as many HR and business leaders will attest, the best technician doesn’t always make a great leader. Talent measurement and business environments that value and develop these competencies are better positioned to successfully navigate disruptive environments. Further, in recent years innovation leaders have increasingly focused on employee’s innovative capability building, as an opportunity to build a broad pipeline of new, innovative ideas.
Despite this environment, HR / Talent leaders rarely seem to strategically engage or own innovation-focused efforts. This represents a significant missed opportunity for those individual leaders and their businesses.
HR leadership is in a prime position to further embed and amplify core skillsets which their function is already valued for. So what is holding HR leaders back? Some possibilities include:
- HR teams are resource constrained, so they can only focus on supporting existing processes and compliance.
- Mindset shift is too great for HR leaders or teams to manage and apply, especially where the focus has been on policy compliance and process orientation.
- HR leaders may lack a “seat at the table”. This is often sighted as a reason for lack of action but demonstrating business acumen, data driven business insights and driving new business opportunities have always ensured HR practitioners can be critical Executive team members.
- HR leaders see the innovation agenda owned by Business Units (BUs), and not by them. For innovation to truly be successful, all parts of the organization must take ownership responsibility.
- Culture / employee engagement functions have become more distributed over time, driven in part by technology solutions such as Slack, etc. This can lead to a lack of ownership options, especially if HR is used to working within a command and control approach.
In response, there are a range of specific steps that proactive HR leaders can take to drive and embrace an innovation agenda. Of course, not all of these will be applicable to a specific organization, but are presented as a menu to choose from, depending on needs and abilities:
- Leverage technology – Technology can simplify the operation of necessary, but highly time consuming administrative HR functions. Effective design and implementation of apps, platforms and automated processes can radically enhance the employee relationship with data driven insights, along with meaningful and timely communication as a chance to drive cross-functional collaboration and resulting new ideas.
- Extend Organisational Insights – By identifying emerging trends at the edges of talent management, HR leaders can effectively contribute to an effective innovation vision. Disruption to customer and business models can just as easily come from outside an industry as from within it, so looking to science, academia and comparable industries for inspiration and network development.
- Organizational Design (Core) – HR teams can support organization redesign efforts, align objectives, talent attraction and retention, as well as diversity initiatives with a more innovative focus.
- As any HR professional knows, these concepts can be incredibly difficult to implement, but a firm focus on innovation as a (core) driver, and understanding new models that are appearing, is a way to help the organization thrive going forward.
- Organizational Design (Edge) – Increasingly Corporate / HR / Talent leadership are looking to develop radical, disruptive ideas on the edge of the organization, where they are operationally separated from the core, but retain connections (often at a leadership level). Further, this can also be an effective risk mitigation approach.
- HR leaders can also use this as an opportunity set up new employee recruitment, engagement processes that might not be immediately applicable to the core, but could be introduced over time.
- Innovation-focused employee communications / training – HR leaders can take the lead in developing programs that increase awareness of trends impacting the organization (both current and future) through existing / new communication channels. In addition, they can develop training programs around processes to develop new ideas. The delivery approaches and content design should be tailored to the specific needs of different employee groups.
- This thinking can be extended where HR develops and manages employee engagement networks, focused on innovation activities. This can be an opportunity to help connect, engage and drive value from your organization’s most innovative employees.
- Redistributing resources – A key issue in developing any new idea is securing employee resources. HR / Talent leaders can build processes to ensure the best ideas are effectively implemented by the highest quality employees.
- Culture as valuation point – Investors now value organizations around their innovative abilities, including their cultural / intangible assets. By presenting metrics around the innovative nature of the organization to analysts / investors, HR / Talent leaders can more closely align with value creation.
- This approach should be extended to clients / customers, as they want to associate with innovative organizations
- Process Redesign – Organizational processes can be redesigned to make it quicker and easier to develop new ideas.
Without taking a lead, HR leadership will face challenges such as:
- Control of HR functions will become decentralized and owned by BUs themselves.
- They will increasingly find it difficult to participate in strategic discussions.
- Culturally focused efforts will continue to be overtaken by other functions, such as innovation initiatives.
- The decision making approach of candidates and customers is much faster and has more access to relevant information via technology than ever before. Giving candidates and customers timely access to relevant information on a company’s culture, career offering, values and products is a direct way for HR to materially impact a company’s revenue and market share opportunity and own that seat at the executive table.
The competency of innovation represents a key opportunity for Talent / HR leaders to take a proactive role in helping shape a strategy for an organization to thrive in a constantly changing environment. At the very least, the HR function needs to strategically support innovation efforts, at best, they should be viewed as owners of key elements of an innovation agenda. Without this, talent leaders are at risk of being marginalized within an organization where they increasingly are viewed as process oriented, tactical bit-players.
By Anthony Ferrier & Fiona McLean
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).
Fiona McLean is the founder and CEO of The Social Index, a reputation analysis business that helps businesses and individuals navigate the emerging complexities of social media for talent management and career decisions. Prior to this, Fiona was a senior HR leader with global experience in Professional and Financial Services and innovative start-ups , specialising in strategic HR, IR, Talent Management and transformation focused initiatives. She has an Honours degree in Industrial Relations from the University of Sydney, is member of leading Academic research groups and a well-regarded speaker on opportunities for HR and businesses to partner on Future of Work issues.