In i4cp's newest report, Human Capital Practices that Drive Innovation, human capital professionals were asked to rate their organizations' effectiveness across eight types of innovation, including often overlooked elements such as product development and process effectiveness innovation. By creating an index of effectiveness scores, combined with i4cp's Market Performance Index rating for each respondent, i4cp was able to determine the top ten human capital practices that not only drive innovation, but are also correlated to overall market performance.
The best news is that all of the practices that were found to be the most effective were those on which HR could have immediate impact -- from seemingly small things like promoting values to major changes such as the creation of online forums to foster new ideas.
And now, the ten best ways HR can improve workplace creativity and innovation (you’ll need to provide your own drum roll):
10. Reward innovation via more engaging work and/or autonomy
Creative types aren't always motivated by money -- for them, the work is the reward. Allow those creative minds the flexibility and space to create.
9. Track innovation talent at both the college undergraduate and/or graduate level.
Innovation is one of the largest differentiators between high- and low-performing organizations, and the battle for that innovative talent is heating up once again. The most effective companies find the brightest minds earlier than their competitors -- sometimes even before graduation. Qualcomm leverages an intern program to attract technical talent from top universities, and encourages its best performers to return to their schools as "campus ambassadors."
8. Put in place a formalized or structured idea/innovation review process.
When the creative ideas come flowing in, the next step is to create gates that allow purposeful review of those ideas, so that budgets for new projects can be allocated correctly.
7. Provide internal training in creativity and innovation practices.
Innovation and creativity levels vary from person to person, but that doesn't mean those abilities can't be improved. Research shows there are proven methods of improving the innovation process in the brain - take advantage of these. Capital One Financial provides employee teams with the time, tools, training and settings to address specific business challenges in creative ways.
6. Put in place discrete budgets to fund innovation projects external to the enterprise (i.e. to generate ideas or products from non-employees).
Don't limit your avenues of innovation -- many groundbreaking ideas come from unlikely sources, and when it comes to innovation, more is almost always better. Even small rewards can be enough to interest customers in submitting their ideas.
5. Have a formal program to find and promote creative/innovative programs, products, or ideas.
There's innovation happening all the time at your organization -- without a way to harness and showcase that creativity, much of it could be going to waste.
4. Tie individual bonuses and/or salary increases to innovation.
You can't buy creativity, but you can show that innovation is a key component of your organization by rewarding the innovative minds in your business. Only 15% of companies surveyed by i4cp indicated that they had these financial rewards for innovation -- this is certainly an area for improvement.
Flextronics has instituted programs that reward creative ideas and innovations monetarily and through recognition. It has two bi-yearly awards focused specifically on innovation -- one chosen for the best idea and results overall, the other for the best cost reduction idea.
3. Include innovation as a major competency in leadership development plans.
Having innovative leaders helps promote the commitment to creativity in your organization, but only 26% of responding companies include innovation as a key competency. At 3M, innovation and leadership are linked directly, and innovation is part of each leader's responsibility.
2. Define and promote organizational values related to innovation.
Having an explicit message that innovation is important creates a more robust environment for innovation, and can allow employees to feel safer when taking the risks necessary for successful innovation.
1. Use technology-enabled collaboration/social media tools to share knowledge.
By using forums, intranets, and other media for group efforts, top companies are able to gather ideas from a diverse group of employees and sometimes even customers and company outsiders. IBM did some research on their online communications and found that the more sources of diversity that were represented the more productive, engaged, and inter-communicative people were. Creating avenues for communication and championing policies that embrace more input from social media can help find those diverse viewpoints...
A more detailed examination of these findings can be found in i4cp's Human Capital Practices that Drove Innovation (i4cp membership required). Also contained within that report are more recommendations of actions that can be taken to improve innovation, and further examples from some of the leaders in innovation today: IBM, Qualcomm, Flextronics, 3M and Sony Pictures. Innovation may seem uncontrollable, but it turns out that there really are ways you can harness it at your own organization.
Cliff Stevenson is an senior human capital researcher with i4cp, lead researcher for the Performance Management and Evidence-Based HR Exchanges, and one of the authors of Human Capital Practices that Drive Innovation.