Human Resource Executive Online, June 16, 2007, Saturday
June 16, 2007
http://www.hreonline.com/HRE/story.jsp?storyId=15709874
Innovation Mavens
With technology and global competition growing at an explosive pace, companies must innovate to prosper. HR can -- and must -- play a critical role.
By
So you think "innovation" is just another mission-statement buzzword?
Just another vague mantra, such as "quality" or "continuous improvement"?
Well, you're right and you're wrong. Sure, some companies and some executives are quick to give innovation lip service, without doing much to make it happen. Name a company that doesn't claim to be innovative. Yet how many actually are? Just a few years ago, this didn't matter as much. If a company wasn't particularly innovative, it could always go out and buy one that was.
"Companies could put innovation on the back burner, and make believe it was the front burner," says Samuel Bacharach, director of Cornell University's New York-based Institute for Workplace Studies.
But no longer.
Some businesses are finding that the market for smaller, innovative firms is drying up. And, say Bacharach and other innovation experts, the threat to companies that don't innovate is increasing on every front: Products are getting to market faster than ever. Capital is easily available these days, so even small competitors can launch devastating sneak attacks. Offshored products and services are steadily getting cheaper and better. Technology and business knowledge are growing exponentially, leaving slow movers in the dust.
What all this means is that if your company isn't continually coming up with new products, new services and new ways of doing business that redefine the market -- rather than simply make incremental improvements -- you may wake up one day to find the train has left the station. And you're not on it.
When it comes to helping foster a company's innovative culture, HR can -- and must -- play a critical role. A variety of innovation experts, including business school professors, human resource consultants and corporate executives, say HR possesses many of the most important tools a company needs to build its innovative culture.
But the obstacles can be formidable. Many CEOs and other top executives don't understand innovation or support its underpinnings, the experts say. And when an organization has a rigid, closed culture, its air can be permeated with the poison most fatal to innovation -- the fear of failure.
Often, HR is its own worst enemy. As the profession struggles to define itself as a strategic partner with a strong business sense, some HR executives have become even more conservative and cautious -- and less open to new ideas -- than the line managers they support, says Rosabeth M. Kanter, a professor at the Harvard Business School who has studied innovation for more than 25 years.
"They want to sound 'hard,' rather than 'soft,' " she says, adding, "Innovation requires a leap of faith, a belief in people's ideas, rather than a belief that people are resources to be counted and compensated."
Says Jeffrey Pfeffer, a professor of organizational behavior at Stanford University's Graduate School of Business: "Most of what HR does kills innovation."
But at a growing number of companies, HR appears to be doing innovation right.
* L'Oreal, the Paris-based cosmetics giant, actively recruits people who are "ambidextrous" -- both creative and analytical -- and then uses HR "talent managers" to help employees develop both attributes throughout their careers.
* At Armonk, N.Y.-based IBM, HR helps foster a collaborative culture -- which in turn feeds innovation -- through a souped-up employee directory that's closer to a social networking site such as MySpace. By typing in keywords on the IBM intranet, employees can find others in the company who share similar interests or can help solve a particular problem.
* Fairfield, Conn.-based General Electric puts its executives and managers through training programs, such as the "Innovation Lab," that encourage experimentation and provide the tools to push through new ideas.
L'Oreal, IBM and GE are all considered companies where innovation is built into the culture. And the experts agree that an organization's overall culture is the key to whether innovation will be successful -- or even possible.
"If the culture of the company is to control things, to require that a number of approvals have to be in place before anything can happen, this will frustrate people who want to be innovative," says Doug Thomas, the partner for the compensation and business practice of Smart Business Advisory and Consulting in Devon, Pa.
Some companies preach innovation, but at the same time don't want their employees to be too creative, says Ilene Gochman, the Chicago-based director of organizational effectiveness consulting for Watson Wyatt Worldwide.
"Employees are told, 'We don't want to see cowboys; we don't want you to do anything in a different way,' " she says. "But they're also told, 'We want innovation.' From an employee perspective, this is unbelievably confusing."
That, she says, tends to lower trust in senior management, who "seem not to be aware of the culture that exists." The employees, she says, "are correctly perceiving it as a disconnect."
And then there is the fear of failure. At many companies, this defines the culture. But all innovation involves risk-taking, the experts agree. Where there is no risk, there is no innovation.
"Corporations are built on a fear of failure, because success is so important," says Scott Anthony, president of Innosight, a consulting company based in Watertown, Mass., that helps businesses become innovative. "People say, 'It sounds great to do things differently, but I don't want to put my career on the line. But at the root of any great success story, there was a failure."
It's a difficult dilemma. "Overcoming this fear of failure is a big problem that still lacks an adequate solution," Anthony says.
That fear can be particularly corrosive if it seeps down from the top. "If people tip-toe around the C-suite, you can have a culture that is dominated by fear and worry of retaliation," says Peter Adebi, founder of Star Leadership, an innovation and leadership development firm based in Blackwood, N.J.
This is more common than one might think. At 81 large companies polled by Sirota Survey Intelligence, an attitude research company, more than 40 percent of top executives reported that they get criticized more quickly for poor performance than praised for good performance. For them, failure does not appear to be an option.
Innovation experts acknowledge that an HR executive cannot single-handedly change a company's culture. At many organizations -- Thomas estimates perhaps 25 percent -- the C-suite "just doesn't get it," and innovation will have difficulty finding fertile ground.
But at the majority of companies, Thomas and others say, HR can make a difference.
Finding Innovators
One of the first steps is to search for innovative people both inside and outside the company. HR is in the unique position of being able foster a company's innovative culture simply by hiring the right kinds of people.
But it's not always easy, because there's a tendency for companies to hire the kinds of people who already work there -- who fit a certain profile. "You're not going to hire someone who's going to be a troublemaker," says Pfeffer. "Most people hire people like themselves."
Jeff DeGraff, a professor at the University of Michigan's Ross School of Business who has served as an "innovation guru" to companies such as 3M, Apple and Toyota, says an innovative culture can suffer when "HR tries to impose the criteria."
For example, "HR says, 'Here's the project and here's the trait that we want in this leader. He's the right kind of person to do that.' But I might be hiring him because he fits 12 attributes, and those 12 may not be right 18 months from now. Innovation pays in the future, where we don't have data."
Many innovators won't fit the expected profile, says DeGraff. "They bust the HR profile open," he says. "They require you to change the gene pool."
But how do you do that? How do you identify innovative people? Watson Wyatt's Gochman says HR should ask job candidates to describe how they handled specific situations.
Instead of asking candidates whether they're creative, for example, "You get them to tell you a story," she says. "You say, 'Tell me about the time you came up with a creative solution to a problem.' "
L'Oreal takes an equally fresh approach when it recruits entry-level employees for marketing and other departments.
"We always look for the people who have had non-traditional experiences -- a passion for something, it doesn't matter what it is, playing the violin, chess, travel," says David Greenberg, senior vice president of HR for L'Oreal USA, based in New York. "It shows that you have the ability to embrace something completely; it enters your heart."
He adds, "You can't teach someone curiosity, you can't teach someone passion. If you don't evidence the ability to become emotionally connected to something, you're probably not right for us."
HR can also foster an innovative culture by finding the innovators within. Often, they're hidden -- by choice, says DeGraff.
"They're under the radar," he says. "They've learned to be undetected for all the right reasons, because if they were found they would be removed."
To identify those employees in their organizations, DeGraff says, human resource leaders can put together projects that bring together a wide range of employees, from engineers to MBAs to artsy types. The actual project isn't as important as what happens when the people in the group begin to interact.
"It's easy to see who the innovators are -- they're basically doing things that don't fit the organizational mantra," says DeGraff. "Pay attention to anything that moves."
DeGraff calls these "Trojan-horse projects" because they're primarily vehicles for finding innovators.
"You need to create an environment where innovators can emerge and connect with others," he says. "They need to self-select. Rather than the company trying to find them, create very gentle ways for them to find each other."
Once the innovators are identified, says DeGraff, HR must help create an environment where their ideas can flourish. "It's HR's job," he says, "to love them, to protect them, to hide them, to grow them."
Encouraging Teamwork
To DeGraff and other innovation experts, it's all about collaboration. An innovative culture does not arise from workers toiling in isolation.
"Innovating is a team sport," says DeGraff. "It's participative."
A striking example of how HR can fuel this is the intranet employee directory at IBM. The directory, called the BluePages, not only includes photos of the company's 355,000 employees, but key information about them -- their skills, interests, areas of expertise, which solutions they've worked on and which clients they've worked with.
It even shows whether the employees are online at the moment, and can be "instant-messaged" -- a common form of communication within the company.
All these features are intended to encourage employees to network and collaborate, says Barbara Brickmeier, a vice president of human resources, whose department oversees the BluePages.
Although innovation has always been prized at IBM, it's now more crucial than ever, she says.
"The world expects more rapid change and more rapid delivery of products," says Brickmeier. IBM's clients, because of pressure from their own clients, "want it now and in a high-quality way, and they're not willing to wait. The cycle of innovation is more rapid than ever before."
HR at IBM also helps workers stay innovative through a database of their skills and expertise. With the basic information, provided by the employees and confirmed by their managers, HR can help keep the workers' skills current by suggesting training and career opportunities for them.
The database allows HR to let workers know "what we're going to need in the next generation of employee, and by the way, that's only next year," says Brickmeier. "We keep people updated on how to be innovative."
In addition, IBM's HR developed a set of policies and practices for "Blog Central," a network of employee blogs that encourages workers to share ideas. While many companies try to prevent their employees from blogging at work, IBM sees blogs as a way workers can collaborate. There are now more than 2,400 active blogs on the site, with nearly 18,000 registered users in 72 countries.
If a company is truly serious about innovation, the experts say, its HR leaders must continually foster and encourage it.
One way this is done at GE is through its "Innovation Lab," an HR-run training program that gives employees at all levels the chance to be innovative in a class setting, so they can see how the process works.
Among the things they learn: "How do you germinate ideas, how do you flush them out, how do you gain support for the ideas," says Raghu Krishnamoorthy, the HR leader for the company's commercial function. "They're given the tools to make sure they can think through the various options."
While the half-day lab is a "grassroots, bottom-up" approach to innovation, GE also offers a multi-day training program for business leaders and their first-level teams of managers. The program, also run by HR, focuses on questions such as "What does an innovative culture look like?" and "How do we build innovative capability?"
GE also encourages innovation by measuring its leaders on their level of imagination -- one of several essential "growth traits." Krishnamoorthy, who defines imagination as "coming up with new ideas that take the company to the next level," says the growth traits are evaluated as part of a leader's annual appraisal. There is also an assessment by the leader and his or her boss, peer group, subordinates and customers.
GE hold competitions and awards for the best at the growth traits, and in the one for imagination, "We showcase people who have come up with new ideas, we show what they've done and how they've done it," says Krishnamoorthy.
Using HR's Other Tools
One of the thorniest issues for HR is how to compensate or otherwise reward employees for being innovative.
As Innosight's Anthony notes, "Financially, it doesn't make sense for people to innovate, because it's the company, not the individual, that gets the reward. And the risk to your career is still high."
Many innovation experts say a crucial problem is individual pay-for-performance, which pits employees against one another and discourages collaboration.
Harvard's Kanter suggests HR should explore the possibility that employees can invest a part of their salaries in their projects.
To foster innovation, HR needs to use all its tools, the experts say. HR can suggest non-financial rewards for innovators, such as job sharing and time off to recharge. It can encourage innovation not only in hiring and then onboarding, but throughout the entire performance-management process.
"All too often, innovation fails because HR doesn't support it or doesn't know how to support it," says Edward Lawler, a professor at the University of Southern California's Marshall School of Business. Many companies, he says, have no "performance-management capability that identifies individuals who are to be rewarded and recognized."
Even when an HR leader knows what needs to be done, that is often not enough. Sometimes, the experts say, the most serious impediment is an HR leader's inability to make the case for why fostering innovation is so important.
Cornell's Bacharach maintains that if HR is really going to be a key partner in pushing ideas in the organization, it must develop what he calls "political competence." That means learning how to persuade, how to build coalitions, how to negotiate with people who resist new ideas, he says.
"We spend almost no time in HR teaching people to mobilize people around our ideas," says Bacharach, a professor of organizational behavior. The reason, he says, is that "we think our ideas are so obvious, that our good ideas will make sense to everyone."
Adds Bacharach: "HR simply has to get politically smarter. That's the only way we're going to be able to contribute to innovation."
June 16, 2007
Copyright 2007© LRP Publications
<< Home