Several new studies on the impact of HR on business results have culminated in an undeniable conclusion; that effective HR leadership is a critical factor in business’s ability to future-proof their organisations and succeed amid increasing disruption.
However HR is being shut out of innovation initiatives at many companies, despite their proven ability to foster change. Why?
Desperate to become a more innovative nation, Australia is running at full pelt just to stand still, suggests John McDuling at the Australian Financial Review.
That’s despite the fact that there are 256 state and territory programmes and 83 federal government measures that aim to boost innovation in Australia, according to a recent paper published by the OECD.
It is critical for Australia to harness innovation in order to “reignite productivity growth, and by extension sustain economic growth, over the long term,” McDuling writes.
But a recent study conducted by talent management software provider PageUp has concluded that while Australian organisations are ‘talking the talk’ when it comes to innovation – and even have many of the key ingredients for success in play, there’s still a gap between good intentions and results.
It’s a chasm HR is uniquely positioned to bridge says Rebecca Skilbeck, one of the researchers who led the study, which drew insight from 322 business and HR professionals globally, including 109 from Australia and New Zealand.
HR has a crucial role to play in helping businesses harness long-term innovation, but they are yet to deliver.
Though the study found that 75 per cent of Australian organisations say they have innovation and creativity as a corporate value, Skilbeck found much of the innovative activity is occurring in silos, rather than on a company-wide scale.
It also uncovered another roadblock to company-wide innovation. Skilbeck found there was a perception gap between what HR was doing and what management was recognising.
“When we asked HR whether they were delivering on innovative practices, 43 per cent said ‘yes, we’re currently delivering’. But when it came to asking non-HR professionals, only 24 per cent of them said that HR were delivering.”
What does this mean?
While HR needs to work on showing their value, Skilbeck suggests, organisations also need to recognise that company-wide innovation can only occur in partnership with HR.
So, what are some key functions that HR can transform to develop an innovative framework?
1. Talent management practices
“Imagine how powerful it would be for an entire company to have an innovative mindset? Contrary to popular belief, creativity and innovation can be taught.”
HR has a great opportunity to create change through training and development, Skilbeck explains. Only 39 per cent of organisations felt that they were training their staff in innovative practices, and only 28 per cent considered those people development practices to be mature.
“HR should be empowered to teach employees to develop and prioritise ideas and incorporate the feedback in an iterative manner. They should be establishing frameworks, as well as coaching leaders to overcome unconscious bias and preconceived mindsets. And managers need time and space to develop idea sharing.”
Data from the Deloitte 2017 Global Human Capital Trends report shows that Australian companies make talent acquisition less of a priority than many other countries (70 per cent compared to the global average of 81 per cent).
Skilbeck says HR needs to ask itself “do the people we’re recruiting bring an innovative mindset? Are they agile, can they deal with ambiguity and will they bring in a diversity of thought?”
3. Performance reviews and employee engagement
The current trend towards ongoing continuous feedback is very closely linked to innovation, she says, because it’s this iterative feedback that allows individuals to act upon and respond to feedback on an ongoing basis.
At the end of the day, the biggest challenge can be ensuring that great initiatives are sewn into the fabric of an organisation. “You really need to ensure that innovation is built into KPI’s in order for this to happen, and HR has a critical role to play when it comes to that performance management framework.”
Time for HR to take the lead
Skilbeck said the survey showed that most people didn’t see their innovation initiatives as world-class, perhaps because of a self-effacing perspective that’s hard to shake.
It is, however the perfect opportunity for HR to partner with leadership to kick-start real progress.
“The benefits HR can drive through talent acquisition, performance management, talent mobility, diversity and engagement programs as well as learning and development opportunities that support a culture of innovation are irrefutable,” says Skilbeck.
“The HR profession has an opportunity to shift internal perceptions, increase its value proposition and start delivering on the promise of sustainable innovation that contributes to the organisation’s bottom line.”