Innovation And Employee Engagement

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

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

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 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

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

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

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?

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 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

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

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 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

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

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

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

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)

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

Recruiting/Retaining
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 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”

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

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

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

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?

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

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”

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

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

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

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

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

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?

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

Logical Conclusion
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

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

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

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

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

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

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

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

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

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Innovation And Employee Engagement

by Jeffrey Phillips on May 13, 2008

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