Talent Management, Employee Engagement and Innovation HR’s seat at the table April 15, 2008

Welcome Our goal for the next hour is to examine the important role that HR can play in innovation: Talent Management Employee Engagement Evaluation, compensation and motivation And how an innovation initiative creates benefits that are important to HR

Our goal for the next hour is to examine the important role that HR can play in innovation:

Talent Management

Employee Engagement

Evaluation, compensation and motivation

And how an innovation initiative creates benefits that are important to HR

Audience You are primarily Human Resource executives in Fortune 500 firms, who are also actively using or considering the Authoria suite of products You are vital to the success of your firm in areas like recruitment, talent management, retention and employee engagement

You are primarily Human Resource executives in Fortune 500 firms, who are also actively using or considering the Authoria suite of products

You are vital to the success of your firm in areas like recruitment, talent management, retention and employee engagement

About OVO OVO is a consulting and software development firm helping our clients build sustainable innovation capabilities. We work primarily with large, distributed organizations that seek to make innovation a consistent, repeatable capability Our clients include many large Fortune 500 firms

OVO is a consulting and software development firm helping our clients build sustainable innovation capabilities.

We work primarily with large, distributed organizations that seek to make innovation a consistent, repeatable capability

Our clients include many large Fortune 500 firms

OVO Capabilities We help firms Innovate on Purpose™ by defining strategic goals and implementing consistent processes Our capabilities include: Facilitated Ideation Innovation Process definition Definition of roles and responsibilities Assisting with culture, communication Defining innovation metrics

We help firms Innovate on Purpose™ by defining strategic goals and implementing consistent processes

Our capabilities include:

Facilitated Ideation

Innovation Process definition

Definition of roles and responsibilities

Assisting with culture, communication

Defining innovation metrics

Hello My Name is Jeffrey Phillips

About Me Jeffrey Phillips One of the lead consultants from OVO Active in a number of innovation projects for Fortune 500 firms Author of the just published book – Make us more Innovative Author of the Innovate on Purpose blog and numerous magazine articles and white papers on innovation

Jeffrey Phillips

One of the lead consultants from OVO

Active in a number of innovation projects for Fortune 500 firms

Author of the just published book – Make us more Innovative

Author of the Innovate on Purpose blog and numerous magazine articles and white papers on innovation

What We Want to Accomplish

Goals for today Define the importance of innovation Examine key HR concerns Examine how HR can enable and support innovation activities Help you become more active in your firm’s innovation initiatives

Define the importance of innovation

Examine key HR concerns

Examine how HR can enable and support innovation activities

Help you become more active in your firm’s innovation initiatives

Key Points Your HR team is chartered to increase engagement and improve talent management Innovative firms have high engagement and find it easier to recruit and retain people Innovation creates new roles, responsibilities, measurements, and questions about evaluation and compensation Does your HR team have a seat at the table?

Your HR team is chartered to increase engagement and improve talent management

Innovative firms have high engagement and find it easier to recruit and retain people

Innovation creates new roles, responsibilities, measurements, and questions about evaluation and compensation

Does your HR team have a seat at the table?

Definition of Innovation Innovation has as many definitions as there are people in the room We often use the word assuming other people have the same definition It’s critical that everyone has the same definition for good communication

Innovation has as many definitions as there are people in the room

We often use the word assuming other people have the same definition

It’s critical that everyone has the same definition for good communication

Innovation is people putting ideas into valuable action Innovation is people putting ideas into valuable action Innovation is people putting ideas into valuable action Innovation is people putting ideas into valuable action Innovation is people putting ideas into valuable action

OVO’s Definition Innovation is people putting ideas into valuable action Innovation is not just “creativity” Innovation is not just idea generation Innovation requires putting ideas into action – developing new products and services Those new products and services need to drive value for the business

Innovation is people putting ideas into valuable action

Innovation is not just “creativity”

Innovation is not just idea generation

Innovation requires putting ideas into action – developing new products and services

Those new products and services need to drive value for the business

Why is innovation important? In a recent Boston Consulting Group survey, over 66% of the CEOs surveyed listed innovation as one of their top 3 priorities Research demonstrates that the financial markets reward firms viewed as innovators with a premium in their stock price over their competitors After years of outsourcing, cost cutting and right sizing, firms need new growth opportunities

In a recent Boston Consulting Group survey, over 66% of the CEOs surveyed listed innovation as one of their top 3 priorities

Research demonstrates that the financial markets reward firms viewed as innovators with a premium in their stock price over their competitors

After years of outsourcing, cost cutting and right sizing, firms need new growth opportunities

What’s the Role of HR? “ HR is very critical to developing an innovative culture, but the people in HR don’t play the right role. They create processes. They are viewed as a nuisance. The new role of HR is going to be as global talent scout and to work with the chief learning officer.” Vijay Govindarajan, professor at Tuck and author of Ten Rules for Strategic Innovators

“ HR is very critical to developing an innovative culture, but the people in HR don’t play the right role. They create processes. They are viewed as a nuisance. The new role of HR is going to be as global talent scout and to work with the chief learning officer.”

Vijay Govindarajan, professor at Tuck and author of Ten Rules for Strategic Innovators

What’s the Role of HR? “ HR is very critical to developing an innovative culture, but the people in HR don’t play the right role. They create processes. They are viewed as a nuisance. The new role of HR is going to be as global talent scout and to work with the chief learning officer.” Vijay Govindarajan, professor at Tuck and author of Ten Rules for Strategic Innovators

“ HR is very critical to developing an innovative culture, but the people in HR don’t play the right role. They create processes. They are viewed as a nuisance. The new role of HR is going to be as global talent scout and to work with the chief learning officer.”

Vijay Govindarajan, professor at Tuck and author of Ten Rules for Strategic Innovators

HR Role (cont) “ HR needs to focus on people who can think about destruction. They must hire people who can make radical and rapid change.” “ You can train for creativity by rewarding innovation.” Philippe Baumard, professor at the Haas School of Business who studies innovation

“ HR needs to focus on people who can think about destruction. They must hire people who can make radical and rapid change.”

“ You can train for creativity by rewarding innovation.”

Philippe Baumard, professor at the Haas School of Business who studies innovation

Innovation is about people More than any other function in a business, innovation is dependent on active, motivated, engaged people To generate ideas To consider and evaluate ideas To make prioritization decisions To prototype or pilot To convert into new products, services or business models

More than any other function in a business, innovation is dependent on active, motivated, engaged people

To generate ideas

To consider and evaluate ideas

To make prioritization decisions

To prototype or pilot

To convert into new products, services or business models

Innovation is about people

If it’s about people If innovation is primarily about people, then the HR team has an important role However, that role is often overlooked or dismissed

If innovation is primarily about people, then the HR team has an important role

However, that role is often overlooked or dismissed

Turn the perspective We’ve looked at the definitions for innovation and why innovation is important Let’s look at some issues that are “top of mind” for most HR executives

We’ve looked at the definitions for innovation and why innovation is important

Let’s look at some issues that are “top of mind” for most HR executives

Talent Management

Talent Management We view talent management as a strategic approach to managing human capital throughout the career cycle: attracting, retaining, developing and transitioning your most important assets. (Career Partners Intl) the entire talent management process of recruiting, developing, compensating, retaining and engaging high-quality employees. (Authoria)

We view talent management as a strategic approach to managing human capital throughout the career cycle: attracting, retaining, developing and transitioning your most important assets. (Career Partners Intl)

the entire talent management process of recruiting, developing, compensating, retaining and engaging high-quality employees. (Authoria)

Engagement People are excited and enthused about what they are doing They resist distractions Tend to forget about time or place Ponder current challenges even when they are not directly involved in the activity Invest free time (discretionary effort ) Identify with the activity Invite others in (emotional contagion) Source: Re.sults Project EMP: Excelling at Employee Engagement , The Concours Group, 2004

People are excited and enthused about what they are doing

They resist distractions

Tend to forget about time or place

Ponder current challenges even when they are not directly involved in the activity

Invest free time (discretionary effort )

Identify with the activity

Invite others in (emotional contagion)

Recruiting/Retaining Finding the “right” people Providing the “right” skills Retaining the “right” people Providing a career path Defining rewards and compensation

Finding the “right” people

Providing the “right” skills

Retaining the “right” people

Providing a career path

Defining rewards and compensation

Preaching to the choir

So, how are we doing? ?

Gallup Survey of Engagement Gallup Poll Study of employees indicates 29% consider themselves fully engaged employees 56% would like to be engaged 15% are presently not engaged at all Downward slide from engaged to not engaged only takes 1.5 years to occur.

Gallup Poll Study of employees indicates

29% consider themselves fully engaged employees

56% would like to be engaged

15% are presently not engaged at all

Downward slide from engaged to not engaged

only takes 1.5 years to occur.

Gallup Management Journal When asked to rate their level of agreement with the statement "I feed off the creativity of my colleagues," roughly 6 in 10 engaged employees (61%) strongly agreed, while only about 1 in 10 actively disengaged employees (9%) gave the same answer. This suggests that higher levels of employee engagement not only increase the likelihood that individual employees will generate new ideas, it also suggests that idea generation among engaged employees can be amplified when it occurs in a team setting.

Towers Perrin Workforce Study

HR and Innovation goals intersect We’ve looked at HR and innovation as processes or functions with little intersection Let’s review how they align and “intertwine”

We’ve looked at HR and innovation as processes or functions with little intersection

Let’s review how they align and “intertwine”

HR and Innovation Innovation imposes process changes , introduces new roles and responsibilities , requires new talent and cultural change These are all HR capabilities 3 important enablers to innovation 3 important inhibitors to innovation HR can dramatically impact the enablers and inhibitors

Innovation imposes process changes , introduces new roles and responsibilities , requires new talent and cultural change

These are all HR capabilities

3 important enablers to innovation

3 important inhibitors to innovation

HR can dramatically impact the enablers and inhibitors

Inhibitors – 3 C’s The three inhibitors to innovation are: Communication Compensation Culture While HR is not generally driving communication, it is actively involved in compensation and culture

The three inhibitors to innovation are:

Communication

Compensation

Culture

While HR is not generally driving communication, it is actively involved in compensation and culture

Compensation When innovating, we ask people to take on new roles and work in new processes with risky ideas that may not succeed We must consider how innovators will be: Evaluated Rewarded Recognized Compensated

When innovating, we ask people to take on new roles and work in new processes with risky ideas that may not succeed

We must consider how innovators will be:

Evaluated

Rewarded

Recognized

Compensated

Compensation Evaluated How does the innovation work get recognized or reflected in ongoing evaluations? Recognized/Rewarded How will innovators or people called on to participate be recognized, rewarded or compensated?

Evaluated

How does the innovation work get recognized or reflected in ongoing evaluations?

Recognized/Rewarded

How will innovators or people called on to participate be recognized, rewarded or compensated?

Culture Firms that successfully innovate have a culture that embraces innovation Your HR team can help change the cultural approach to innovation through The people you hire The things you reward and recognize The goals and outcomes that are emphasized New skills and capabilities delivered through training

Firms that successfully innovate have a culture that embraces innovation

Your HR team can help change the cultural approach to innovation through

The people you hire

The things you reward and recognize

The goals and outcomes that are emphasized

New skills and capabilities delivered through training

Embracing innovation Move from “not invented here” thinking Change from a “negative bias” to a “positive bias” Encourage many attempts and celebrate wins and failures Change attitudes “ we tried that 10 years ago” “ that’s never been done here before”

Move from “not invented here” thinking

Change from a “negative bias” to a “positive bias”

Encourage many attempts and celebrate wins and failures

Change attitudes

“ we tried that 10 years ago”

“ that’s never been done here before”

Enablers – 3 P’s Just as there are inhibitors, there are enablers for innovation Those are three “Ps” that HR can influence People Process Permission

Just as there are inhibitors, there are enablers for innovation

Those are three “Ps” that HR can influence

People

Process

Permission

People Identify individuals who bring unique skills and viewpoints into the business Identify people within the business with a knack for innovation and capabilities to add to an innovation team Provide training to help people think creatively

Identify individuals who bring unique skills and viewpoints into the business

Identify people within the business with a knack for innovation and capabilities to add to an innovation team

Provide training to help people think creatively

Permission People want to innovate, but they often feel inhibited by the culture or compensation models They need permission to: Take on new projects Add more risk to the portfolio Innovate occasionally Fail without fear

People want to innovate, but they often feel inhibited by the culture or compensation models

They need permission to:

Take on new projects

Add more risk to the portfolio

Innovate occasionally

Fail without fear

Process For any business function to work effectively and sustainably, it must follow a consistent process Innovators need a defined process to generate, manage, evaluate and select the best ideas to become new products and services

For any business function to work effectively and sustainably, it must follow a consistent process

Innovators need a defined process to generate, manage, evaluate and select the best ideas to become new products and services

What can you do? 3 Rs How can you get more involved in innovation programs? What can you add to the mix? Three Rs Recruiting the “right” people Retraining to add new skills and capabilities Recognizing and rewarding those who innovate

How can you get more involved in innovation programs? What can you add to the mix?

Three Rs

Recruiting the “right” people

Retraining to add new skills and capabilities

Recognizing and rewarding those who innovate

What’s important to HR? Most firms are focused on: attracting the best talent managing that talent effectively retaining high performers building high employee engagement Are these goals consistent with yours?

Most firms are focused on:

attracting the best talent

managing that talent effectively

retaining high performers

building high employee engagement

Are these goals consistent with yours?

Benefits of innovation Most innovation leaders can demonstrate that their innovation programs and culture help them: Attract the best candidates Retain their best people Provide opportunities for high performance talent Maintain a high level of employee engagement

Most innovation leaders can demonstrate that their innovation programs and culture help them:

Attract the best candidates

Retain their best people

Provide opportunities for high performance talent

Maintain a high level of employee engagement

Logical Conclusion You should return home and start an innovation program within your firm as soon as possible.

You should return home and start an innovation program within your firm as soon as possible.

Was a benefit, now a driver What’s happening in the innovation space is that these “soft” HR oriented benefits were recognized as outcomes, but are now being used as justification for innovation initiatives and programs Several large Fortune 500 firms have recently started innovation programs in part to achieve these goals of talent management, increased retention and employee engagement

What’s happening in the innovation space is that these “soft” HR oriented benefits were recognized as outcomes, but are now being used as justification for innovation initiatives and programs

Several large Fortune 500 firms have recently started innovation programs in part to achieve these goals of talent management, increased retention and employee engagement

Your seat at the table Too often, HR is simply not invited to participate in an innovation program. That’s usually not intentional, just a lack of understanding about the value that HR can provide Yet many of the challenges that innovators face are directly related to skills and capabilities HR can bring to the table

Too often, HR is simply not invited to participate in an innovation program. That’s usually not intentional, just a lack of understanding about the value that HR can provide

Yet many of the challenges that innovators face are directly related to skills and capabilities HR can bring to the table

The real “win-win” Innovation teams want to quickly scale up and define new roles, responsibilities and convert ideas to new products that add value To do so, they encounter a lot of challenges: Recruiting the “right” people Ensuring the appropriate mix of skills Determining how people will be evaluated, recognized and compensated

Innovation teams want to quickly scale up and define new roles, responsibilities and convert ideas to new products that add value

To do so, they encounter a lot of challenges:

Recruiting the “right” people

Ensuring the appropriate mix of skills

Determining how people will be evaluated, recognized and compensated

Win-Win HR is increasingly emphasizing talent management, retention, recruitment and employee engagement These are all positive outcomes from a successful innovation program Working together, the innovation team and HR team can help each other achieve the goals and outcomes

HR is increasingly emphasizing talent management, retention, recruitment and employee engagement

These are all positive outcomes from a successful innovation program

Working together, the innovation team and HR team can help each other achieve the goals and outcomes

What HR can offer Recruiting – finding new people with different skills or perspectives Identifying innovators using Myers-Briggs, KAI, FourSight or other aptitude testing Training – implementing creativity and innovation training programs to increase skills Recognition – examining specific recognition and rewards programs Compensation – determining how innovators should be appropriately compensated Evaluation – setting evaluation programs and parameters for innovators or innovation teams Cultural change – establishing a change in a corporate culture to embrace innovation

Recruiting – finding new people with different skills or perspectives

Identifying innovators using Myers-Briggs, KAI, FourSight or other aptitude testing

Training – implementing creativity and innovation training programs to increase skills

Recognition – examining specific recognition and rewards programs

Compensation – determining how innovators should be appropriately compensated

Evaluation – setting evaluation programs and parameters for innovators or innovation teams

Cultural change – establishing a change in a corporate culture to embrace innovation

Two Key Points Firms with a focus on innovation have higher engagement and can more easily recruit and retain people These benefits are important to HR HR teams are not invited or involved in too many innovation programs, even though the HR skill sets are vital to the success of those initiatives Take your seat at the table

Firms with a focus on innovation have higher engagement and can more easily recruit and retain people

These benefits are important to HR

HR teams are not invited or involved in too many innovation programs, even though the HR skill sets are vital to the success of those initiatives

Take your seat at the table

Conclusions Proactively seek out opportunities to get involved in innovation initiatives Currently, several of our customers and prospects have HR leading an innovation initiative Use innovation programs as a method to drive engagement

Proactively seek out opportunities to get involved in innovation initiatives

Currently, several of our customers and prospects have HR leading an innovation initiative

Use innovation programs as a method to drive engagement

Wrapup While innovation and HR may seem strange bedfellows, they are actually co-dependent and mutually reinforcing Innovation is a people-centric activity and needs the skills HR can bring to the table When innovation is successful, your key goals will be fulfilled as well

While innovation and HR may seem strange bedfellows, they are actually co-dependent and mutually reinforcing

Innovation is a people-centric activity and needs the skills HR can bring to the table

When innovation is successful, your key goals will be fulfilled as well

Questions? Contact us Phone: 919-848-8675 Email: [email_address] Web: www.ovoinnovation.com Book: Make us more Innovative

Contact us

Phone: 919-848-8675

Email: [email_address]

Web: www.ovoinnovation.com

Book: Make us more Innovative