The People-Profit Chain™ model from i4cp discovered five domains--and 25 KPIs--that are most correlated to market performance and determined that high-performance organizations are 2.6x more likely to focus on improving products and services. Much emphasis is put on research and development processes, marketing, and sales, but what about HR? The function has a more direct impact on product and service improvements than most think.
By building and maintaining processes that value outside feedback and enable continuous experimentation, it is possible to innovate at a sustainable rate. But this is much easier said than done.
The needs of consumers are always changing, so it's important for products and services--and the processes that bring these to market--to evolve as well. Unfortunately, consumer expectations often rise faster than companies can innovate, leading to gaps in satisfaction. Luckily, i4cp's research has found or reaffirmed four organizational talent practices that can help.
Expectation vs. innovation
HR should be as aware of customer needs as the sales department and clearly communicate the issues that are identified via customer feedback. HR should make these needs a core component when hiring, partnering with external sources such as universities to recruit people who not only have the skills to meet market demand, but match the demographics of customers. Plus, the process needs to persist after selection, with training for new hires (onboarding) and continuing education for legacy employees (learning and development).
1) Educate every employee about customer needs
Some crazy ideas (even the ones that seem really, really crazy) should be put into action. Some will fail, others will not. But this will only happen if employees operate in an environment that welcomes risk. Creating a culture that rewards intelligent risk-taking will deliver a steady stream of innovation from across the organization.
2) Reward intelligent risk-taking
Capital One employs a test and learn strategy, continuously piloting new product and service offerings and marketing approaches (over 30,000 tests per year) and analyzing the results to identify improvements. The company focuses its hiring and development processes on creating a workforce that has strong analytical abilities and is comfortable with data-driven experimentation.
Some companies have struggled to implement social media tools successfully and some have resisted them altogether, believing social networking to be more of a distraction than a productivity accelerator. High-performance organizations are 2.5x more likely to use technology-enabled collaboration or social media tools to share knowledge, as doing so can lead to greater connectivity across global workforces and generate new ideas or solutions to existing problems or inefficiencies.
3) Embrace technology-enabled collaboration/social media tools
Shell Oil, an i4cp member company, has created a 25-person division with a budget of $40 million to analyze ideas submitted by employees (via an internal website) and subsequently vet them for potential opportunities. Not only does this type of formal review process demonstrate to employees that the company takes seriously and values employee contributions, it also has potentially massive revenue implications.
4) Put in place a formalized or structured idea/innovation review process
i4cp research shows that high-performance organizations are proficient at improving products and services. If you're curious about how your organization stacks up, consider The People-Profit Chain™ Assessment.