Constant reinvention and creativity are survival techniques in the rapidly changing world of business. So how can HR help improve organisational innovation?
The majority of advice on organisational innovation is just plain wrong, says innovation psychologist Amantha Imber. She has strong views on what’s written about her pet subject, describing it as a mishmash of fluff and opinions. But where does that leave HR professionals, charged with fostering a thriving innovation culture but often with little training in how to do it?
The answer, according to Dr Imber and others, is hard data. Evidence-based research that cuts through all the pop psychology and tells you what innovative companies actually do.
“The latest scientific research tells us very clearly what works and what doesn’t,” says Imber, founder of innovation consultancy Inventium.
In the completely ineffective category are faddish novelties such as beanbags, table tennis tables and offsite workshops in exotic locations. Instead, it’s all about getting the most out of the areas that are HR’s bread and butter.
“The key things are environment, talent and process,” says Christy Forest, former managing director, Asia Pacific, of CEB (now part of Gartner). “I think HR has a role to play in all of them.”
Imber agrees, and says a serious, structured approach is vital. “A lot of companies waste money on a scattergun approach. Most organisations talk about innovation and have it as a value. But there’s a big difference between talking about it and actually doing it.”
So in what areas can HR become a catalyst for innovative thinking? Let’s take a closer look at recruitment and training.
Imagine a future where it’s possible to objectively measure whether an individual possesses some of the key traits associated with innovation – creativity, intuition, imagination and tolerance for ambiguity, for example.
Joel Pearson, professor of cognitive neuroscience at the University of NSW and founder of the Science of Innovation Lab, says this future is not so far away.
“It’s not here yet, but we’re seeing developments in cognitive psychology and applied neuroscience which will completely revolutionise the way people are matched to jobs,” says Pearson
“These new measurement technologies will sweep into recruitment; it’s on the horizon.”
Historically, things like imagination and creativity have been too difficult to measure objectively, and questionnaires based on candidates’ subjective opinions of themselves have had to do. The problem, as Pearson notes, is that most smart people can figure out what you’re asking and tailor their answers accordingly, resulting in inaccurate conclusions.
Instead, Pearson uses technology such as virtual reality headsets and electro-encephalogram (EEG) tests to track brain wave patterns to measure innovation potential. For example, a candidate may be asked to imagine the colour green and have their brain response measured.
Apparently, someone who has a stronger imagination will see a stronger green.
Forest says CEB research has helped to isolate behavioural markers that are highly predictive of innovation potential. The five identifiers are: results seeker, customer empathiser, idea integrator, influencer and someone who is a risk taker.
Of these, the two standouts are customer empathiser (able to identify customer needs and develop novel solutions) and idea integrator (able to synthesise information from different sources). From a recruitment point of view, this means carefully assessing behavioural competencies rather than focusing too narrowly on technical expertise, says Forest.
When assessing performance, companies often focus too much on outcomes, thus rewarding result seekers at the expense of those showing other behavioural markers, she says. It’s rare to find one person with all five markers, so it’s important to have teams with a spread of these innovation indicators.
Imber agrees there are some innovation-friendly traits revealed by psychometric testing, such as being naturally curious or comfortable with ambiguity. But she cautions that scientific research on identical twins shows that innovation capability is only 30 per cent genetically predetermined; the other 70 per cent is about having the right environment and learning skills.
So given that genetics is not the whole story when it comes to creativity, how can you cultivate an innovative mindset? “It’s like going to the gym or running; you have to practice,” says Pearson.
Ideally, organisations should aim to train 10 per cent of their people. Imber says this should lead to a 20 to 40 per cent uplift in innovation capability within 18 months, as the skills spread beyond those who are directly trained.
“People are not born to be great innovators: it’s often knocked out of them at school,” Imber says. “HR must bring in programs, to help people identify opportunities and be better creative thinkers.”
Imber says one of the key skills required for innovation is understanding customers. The good news for those who are not natural customer empathisers is that it can be taught.
“How do you find out what matters to customers and what are their biggest frustrations? These are the big opportunities for innovation. If we just rely on what customers say, we end up with faster horses. It’s about finding out what’s lacking, not asking them for a solution.”
Another key teachable skill is knowing how to experiment in a low-cost and fast way. The typical approach to new ideas – developing a time-consuming and expensive business case – is fundamentally flawed because eight or nine out of 10 ideas fail.
Instead, people need to learn how to build a fast and cheap viable product to test the idea. For example, a health insurance company had an idea to package several products together for a target market, and tested the concept by building an inexpensive landing page on its website and asking customers to register for the product. That idea failed, as conversion rates were not as expected, and it lead to several changes before the product was launched.
Imber and Forest agree that the way some workplaces are structured can kill innovation. Hierarchical, bureaucratic organisations make it hard for people to speak up, while a lack of diversity, especially at senior levels, discourages debates from different points of view.
Forest says a flatter structure can help, but leaders are also another impediment to innovation – even more than organisational structure.
One of the toughest scenarios is where the CEO says the company needs to innovate but the organisation’s policies – on performance management, incentives and risk, for example – tend to penalise those who shift away from day-to-day outcomes.
“From office design, through to policies to show you trust people and that things are flexible; if you want to motivate people to care about the company and the brand, then you need to loosen things up,” says Pearson.
Why innovation matters
Behind all the investment going into scientific research to fathom organisational innovation is the fact that innovation has come to matter today more than ever.
“A decade ago, organisations didn’t need to focus on innovation so much,” Pearson says. “But waves of disruptive technology mean innovation is not something to choose to do as an add-on; it’s now become the new normal.”
He sees Australia lagging behind other countries, especially the US, in its linkages between universities and companies. “In the US, every professor has a start-up, but Australia tends to be very precious about intellectual property and conflicts of interest.”
Imber, on the other hand, points the finger at Australia’s strong culture of risk aversion. “Most companies know they need to take risks, but they are not comfortable and struggle to do so,” she says.
“Every company, no matter how big or small, must innovate. It’s not just about growth; it’s a survival tactic.”
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