HR needs to build innovation into company strategy in 3 key ways: 1) Cultivate creative leaders by developing the next generation to lead in a global, flexible way. 2) Mobilize for speed and flexibility by rapidly developing workforce skills to match opportunities. 3) Capitalize on collective intelligence by fostering collaboration and knowledge sharing to drive efficiency and innovation.

1. How does
HR build in
innovation
into the
company
strategy ?
Ir. Mia Vanstraelen
Vlerick HR day
June 8th 2011
based on IBM’s Oct 2010 CHRO Study,
mia.vanstraelen@be.ibm.com © 2010 IBM Corporation

2. Common wisdom on innovation in a nutshell …
All growth driven strategies today require innovation; sustainability and CSR are now on the
innovation agenda
Type of Innovation:
– Sustained innovation, or incremental innovation… along the lines of continuous innovation and
improvements
– Disruptive or spectacular innovation in products, services, business models
Business leaders and their strategies must drive innovative projects;
– Leadership is required to break out of the innovation trap
Collaboration, collective intelligence is source of innovation,
IT is the tool, essential and pivotal; creative usage of IT creates new opportunities
Innovation is THE Source of longterm growth; innovation requires:
– Balance between creativity and discipline
– An Innovation Style in each company
– Innovation crosses the whole value chain
– Innovation works in dimensions: individual level, on corporate level, or at eco-system-level
The term OPEN innovation means open to ideas; it also means innovation involving clients and suppliers, all members
of the eco- system, involves high uses of technology and IP, requires short learning curves and adaptability in systems and in people, creates
structure out of chaos, looks for risk taking attitudes, is open to all types of partnerships, is collaborative in nature and cultural diverse in its core,
uses proven methodologies as bootcamps and best practices;
– FYI: the term “open innovation” had 200 google entries in 2003, while 13M at start of 2011… a factor 60K in 9 years.
© 2010 IBM Corporation

3. Agenda
CHRO Study “Working beyond borders” or working beyond the “tunnel”
Three workforce opportunities require focus from HR in order to drive growth,
and innovation:
– Cultivating creative leaders
– Mobilizing for speed and flexibility
– Capitalizing on collective intelligence
Making HR build in innovation into strategy
3 © 2010 IBM Corporation

4. The 2010 Global Chief Human Resource Officer (CHRO) Study
builds on our insights and findings over the last five years
2005 2008 2010
The Capability Within Adaptable Workforce Working beyond Borders
Key Themes Key Themes Key Themes
The menace of maturity Developing an adaptable Cultivating creative leaders
The quest for talent workforce Mobilizing for speed and flexibility
Retaining key people Closing the leadership gap Capitalizing on collective
Cracking the code for talent intelligence
Measuring performance
Driving growth through
workforce analytics
320 HR executive interviews 404 HR executive interviews 707 HR executive interviews
4 © 2010 IBM Corporation

5. HR leaders focus on two important goals — the need to drive growth
and maintain operational efficiency: the problem of innovation
Current and future areas of focus
64%
Improving operational efficiency
44%
35%
Developing new product/service offerings
48%
Requires
31%
Expanding into new markets/geographies Innovation
44%
Today Three years
“Our current stance is defensive to protect our profits under difficult economic
circumstances; however, over the medium and long term, our agenda is geared toward
global growth.”
Director of Operations,
United Kingdom
Source: Q1 (Overall, what do you see as the primary business challenges affecting you organization today and in the next 3 years? Select THREE)
5 © 2010 IBM Corporation

6. In the HR domain,three key capabilities enable organizations to
work beyond borders and therefore outside their tunnels:
Mobilizing for speed
Cultivating and flexibility
creative leaders Rapidly develop and deploy
Developing the next workforce skills and capabilities
generation to lead a to match emerging opportunities
more global, flexible
and diverse workforce
for business growth
Capitalizing on collective
intelligence
Fostering collaboration and
knowledge sharing to drive efficiency
and foster innovation
6 © 2010 IBM Corporation

7. 1 Leadership: Less than one-third of companies say they are
effective at building the next generation of leadership capabilities
Effectiveness at developing future leaders
Relative effectiveness
Ineffective 69% 9
8
7
6
Effective 31%
5
4
Developing
• Lack of modern leadership styles (cooperative, supportive, 3 future leaders
inspiring, lateral) 2
• Lack of knowledge on stimulating creativity & on reflecting 1
companies historic paths & traditions
1 2 3 4 5 6 7 8 9
• Lack of ways to incorporate external perspectives
Relative future importance
(suppliers, customers)
“We have hired and trained people to work in silos. We need to identify future leaders who
can operate in a globally integrated company, and train them to think and work globally.”
Patti Stumpp,
SVP HR, Invacare Corporation
Source: Q2 (How important is it for your organization to address the following workforce challenges in the next 3 years? Select THREE)
Q3 (How effective is your organization in addressing the following workforce challenges today: Developing future leaders? Effective = 4 and 5)
7 © 2010 IBM Corporation

8. Key issues for cultivating creative leaders
Check the innovation style of leadership in your company
Support your leaders in the process of innovation and
collaboration!
Foster multiple leadership styles, creativity and “out-of-the-
tunnel”-thinking among your leadership team!
Radically rethinking leadership development to emphasis
business growth through innovation!
8 © 2010 IBM Corporation

9. 2 Mobilizing: While companies are looking to become more flexible,
they are still challenged in building and allocating talent
Effectiveness ratings
Efficiently allocating
64%
Relative effectiveness
the workforce
across the 36% 9
organization
8
7
Rapidly developing 69% 6
workforce skills and 31% 5 Rapidly developing
capabilities workforce skills
4 and capabilities
Efficiently allocating
Effective Ineffective 3 the workforce across
the organization
2
• Lack of unified workforce strategy over different units 1
• Lack of focused allocation models
• Lack of appropriate learning platforms & opportunities 1 2 3 4 5 6 7 8 9
Relative future importance
Source: Q2 (How important is it for your organization to address the following workforce challenges in the next 3 years? Select THREE)
Q3 (How effective is your organization in addressing the following workforce challenges today: Rapidly developing needed workforce skills and capabilities? Efficiently allocating
the workforce across the organization?) (Effective = 4 or 5)
9 © 2010 IBM Corporation

10. Key issues for mobilizing for speed and flexibility
Break down the organizational silos and tunnels that
prevent the best use of your talent!
Use alternative work structures provide greater opportunity
for efficient and more innovative deployment!
Reduce time to competence in your most critical jobs
10 © 2010 IBM Corporation

11. 3 Collective intelligence: Organizations struggle to connect their
workforces
Effectiveness at fostering collaboration and knowledge sharing
Relative Effectiveness
9
8
7
Ineffective 78% 6
5
4
3
Effective 22% 2
Fostering collaboration
1
and knowledge sharing
1 2 3 4 5 6 7 8 9
Relative future importance
“We don’t share intellectual assets fully, even though we have the IT infrastructure to do so.”
HR Executive, Industrial Sector,
Japan
Source: Q2 (How important is it for your organization to address the following workforce challenges in the next 3 years? Select THREE)
Q3 (How effective is your organization in addressing the following workforce challenges today: Fostering collaboration and social networking? Effective = 4 or 5)
11 © 2010 IBM Corporation

12. Key issues for capitalizing on collective intelligence
Get multiple generations of employees to actively engage
in collaboration to overcome tunnels!
Encourage formation and use of cross-organization
communities around strategic business topics!
Develop ways to explore, reward and integrate diverse
and unconventional points of view!
Use novel techniques to tap into the insights and ideas of
employees around the world!
12 © 2010 IBM Corporation

13. Becoming
borderless and
more
innovative…
13 © 2010 IBM Corporation

14. Key challenges for HR supporting company strategies & leaving the tunnel
Use strategic influence not only for strategy execution but for
strategy building while using this knowledge to enable a culture of
innovation
Lessons learned from the CHRO-Study to make HR itself a driver
for innovation over the value chain of the enterprise:
At the top: Develop knowledge & capabilities of your strategic
leaders
In the company: guarantee efficient learning and talent
allocation to develop company’s intelligence
In between: Connect collective company intelligence with top
management levels to enable a culture of collaboration and
creativity
14 © 2010 IBM Corporation

15. For more information
For more information about this study, please visit the study web page:
www.ibm.com/chrostudy2010
Or contact one of the IBM leaders listed below:
Asia Pacific and Latin America: Denis Brousseau, dbrousse@cn.ibm.com
Japan: Kazuya Ohike, KOHIKE@jp.ibm.com
North America: Maria-paz Barrientos, maria.barrientos@us.ibm.com
Northern Europe: Hans-Henrik Jorgensen, hans-henrik.jorgensen@de.ibm.com
Southern Europe: Martina Pareschi, martina.pareschi@it.ibm.com
IBM Institute for Business Value: Eric Lesser, elesser@us.ibm.com
15 © 2010 IBM Corporation

16. Detailled insights ….
Imperatives for building innovation into the company strategy will
require HR to focus on:
Improve Expand into Develop new
operational new markets/ product/service
efficiency geographies offerings
Cultivating Be comfortable with distributed Accelerate the development Design leadership development
creative and virtual leadership of truly borderless programs to generate
leaders approaches; create leaders leaders; be creative in innovative emerging
who leverage informal power combining global and local business opportunities
talent
Mobilizing for Develop online marketplaces Adapt a global approach Leverage flexible work
speed and to efficiently match global to sourcing talent; structures to rapidly align /
flexibility talent supply with demand eliminate policy and process connect talent with
barriers to cross-border critical jobs in new
movement business areas
Capitalizing Improve productivity through Improve cross-functional Establish a culture of creativity
on collective best practices sharing and effectiveness by providing and innovation where new
intelligence reducing duplicative efforts an online platform for product ideas get visibility and
virtual team collaboration executive support
16 © 2010 IBM Corporation