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The Role of HR in Innovation

We’ve been told by the Turnbull Government we need to focus on Innovation in 2016. Have you thought about how you’re going to do that in your organisation?

We examined how you can do this from both ‘inside’ your business through fostering a culture of innovation and ‘outside’ of your business – as research points to the idea that real innovation arises from encounters with partnership between groups with different capabilities. 

We explored:
•    Building a high performance work culture
•    Frills and thrills – how to attract and retain talent
•    How to benefit from new technology-enabled markets for labour and skills


With Panellists:
Geraldine Nankervis – The Camden Collective
Janet Sernack - ImagineNation
Kimberley Reid
Moderated by Bec Kempster 

The Insights…

Why SMEs and start-ups should have a strategic & considered approach to HR

Create a ‘People Strategy’ early on. This will assist you in having a targeted approach for creating the culture you want as the business grows.

Have conversations with each area of management to understand the skills sets and talents they need to build their teams.

Appoint ‘People First’ style people as leaders and managers. Systemize where possible.

There is a balance though – you don’t want to dull or dumb down the brilliance of a CEO who may be ‘product first’ rather than ‘people first’, ie Rem Koolhaus or Steve Jobs, as talent line up to get through the doors of these organisations. Don’t lose your own sparkle. 

Recruitment is the most important step in the HR process. If you haven’t got the right people in the business, then you don’t have a business.

Can recruitment agencies plug in as a HR resource?

In the age of LinkedIn most people seem to go straight to market and the future of the recruitment market seems uncertain. The potential value add for recruitment consultants is to define their value proposition and what the job really is.

Businesses need innovative ways to attract and retain talent. The costs associated with using a recruitment agency are still quite exorbitant in age of LinkedIn. However, this is not across the board. For example, everyone in digital and tech is on LinkedIn however if you’re looking for a geo-scientist they may not be on LinkedIn. A need still exists for specialty recruiting according industry / position. 

Look at alternative ways to source talent – such as via coworking spaces. This may involve partnering with talent as opposed to ‘hiring’ them in the traditional sense. Consider alternative forms of remuneration such as profit share. 

What are the key elements of a HR Strategy?

Key drivers are:
•    Ensuring you have the right people in the right roles
•    Creating an organisational structure that enables success
•    Ensuring that managers are aligned and empowered
•    Ensuring employees are connected to the organization vision and values
•    Remuneration strategy including rewards and incentives
•    Looking at how to create effective knowledge and information channels
•    Exit strategy – what’s the message to the business when an exit takes place and how is it communicated.

What comes first – talent or outcomes? 

Strategy before structure. Work out the business outcomes and then ensure you have the capability to make sure you can fill it. 

However the possibilities could multiply if you have the talent onboard from the outset. If you find a gem, then find a way to fit them in and compromise elsewhere if need be. Having a HR Strategy in place allows you to understand what you need to compromise on. 

Identify competencies. 

How can organisations demonstrate culture during the recruitment process?

Thrills versus frills. If you don’t have a huge budget consider other alternatives that you can offer to talent. Such as:
•    Access – to CEO and management
•    Empowering them to take charge of their career
•    Flexibility
•    Access to new opportunities within the business
•    Fit with the rest of the team
•    A story they can buy into and play a role in 

Create an environment where there’s socialisation outside the workplace.

People want to be able to make a contribution. You need to establish how to facilitate this. 

What about long-term vision?

Be honest about whether this person is going to be in the business for two years or ten – what can you commit to? For example, a junior lawyer isn’t signing up to be a partner. They want to know what they’re going to learn, what they can contribute, what exposure they will get to the people they value. Young talent is often coming in with a shopping list of what they want from a role within a set timeframe and to have access to this talent you need to be in a position to align visions. 

You need to understand what your organization is not – ie Apple is not a relaxing place with work-life balance. 

It’s important to understand each party’s definition of success. If the candidate has very different success drivers to the vision of the organisation then they’re not likely to gel. 

What’s the best approach when exiting someone from the business?

Depends on approach that organisation leader takes around transparency and communication and what’s been set as the benchmark. Ultimately it all comes down to common sense – treat everyone as though you were on the other side of the table.

Communicate the impact to others in the business of this departure. Industry verticals have conventions may also dictate how this takes place – for example banking has adopted a common approach that is different to that of not-for-profits.

The approach should depend on what the leader is trying to communicate. There may be a reason why a public outing is the right approach, say in the case where people are being exited in order to drive a change in culture ie recent ANZ traders scandal that broke early this year. 

How does the feedback loop play into this?

Be clear upfront what the message is about why you’re behaving in this way otherwise people will make it up themselves and it’s more likely to lead to resistance. A collaborative culture has strategies and practices for providing feedback other than just an annual engagement survey.  

Innovation requires coherence because it’s a creative process. It’s about your ability to see the problem, develop a creative response and to solve it. Continually experimenting and adapting. 

Old promises of job security are now difficult to make. It’s no longer possible to give reassurances to someone that they’ll be employed by the organisation forever. The new promise is about telling the truth – you can stay here for X, you will get Y and then we’ll have another conversation about what happens next. More deal based approach. 

When you’re innovating and creating you need one approach, but when you’re at the point of executing you may need another approach. 

Consider ‘Tours of Duty’; ie
1.    Extractional – more likely to be freelance where you’re creating some value
2.    Foundational – merged and aligned with the organisation 

How can SMEs balance execution with innovation?

The Medici effect theorises that if you bring people that are very different together then they’ll produce the Renaissance. This may mean collocating with very different businesses or putting project teams together with very different skill sets. The Norwegian architecture firm Snohetta have had great success with this – such as making the CFO do the design pitch. Take people out of their comfort design. 

There’s thirteen types of innovation levers to explore in organization structures:
•    Product
•    Service
•    Platform
•    Solution
•    Customer needs
•    Customer experience
•    Communication
•    Process
•    Revenue generation
•    Business management
•    Supply chain relationships
•    Partner relationships

How can management encourage innovation?

Management are the role models of what they want the team to be. They need to drive the process and build a sense of passionate purpose that creates the urgency to deeply engage and inspire people. 

Managers drive culture whether they mean to or not so it’s much better if they are doing this intentionally. 

Perfectionist cultures are what inhibit innovation. We have a strong culture of avoidance in Australia. We need to give permission to experiment, improvise and importantly to fail. Mangers are responsible for creating the psychological safety for people to do this. 

Risk adversity is also another inhibitor. There needs to be a clear understanding of what is an acceptable risk to take and what isn’t. In Australia we live in a comfortable, wealthy, abundant society where there is no necessity for risk taking behavior. This has made us complacent and uneasy with moving out of our comfort zone. 

Innovation is tough – you’re asking people to do things differently, take risks and face their fears. This requires management to be compassionate and empathetic. 

And finally…

Dare to be different. Trust your fervour, passion and intuition that got you going in the first place. Cultivate your passionate purpose. 
Be more curious. 


Other Resources

The Alliance by Reed Hoffman
How Google Works by Eric Schmidt & Jonathan Rosenberg  (for info on ‘Smart Creatives’)
The Medici Effect by Frans Johansson
Netflix Culture Deck