HR's role in driving innovation (Toughest HR Question)

It’s about creating a culture that rewards and incents creativity
By Brian Kreissl
|Canadian HR Reporter|Last Updated: 03/20/2015

Question: How can HR help drive innovation within organizations?

Answer: While HR isn’t generally responsible for product development or business process improvement, it can help to create a culture of innovation throughout the organization. It can also help by creating innovative HR programs, implementing policies and creating organizational structures that help foster innovation and creativity, and facilitating workshops that encourage employees to come forward with new ideas.

Innovation is a huge concept in business right now, for a number of reasons. Most importantly, with the continuous advancement of technology — especially so-called “disruptive technologies” — businesses increasingly need to rely on creativity and innovation as a means of differentiating themselves from the competition.

‘Disruptive innovation’

Disruptive innovation is when goods and services that are expensive and complex are transformed into something much more affordable and accessible, according to Clayton Christensen, a Harvard Business School professor and author of The Innovator’s Dilemma.

He argues that such innovation has caused some great companies to fail. Indeed, there are many recent examples of large organizations that failed to innovate — or finally decided to change after it was too late. Such companies include Kodak, Polaroid, Blockbuster Video and Borders bookstores in the United States.

In a constantly changing economy, the message becomes “Innovate or perish.” While companies that don’t respond are doomed to fail, companies need not be facing extinction in order to innovate and improve.

It is also important to understand that innovation need not be “disruptive” in order to capitalize on new ideas or emerging technologies. Multiple incremental changes and small projects can have a significant impact on an organization’s success and profitability.

Out-of-the-box thinking

The first step in helping to drive innovation is by fostering a culture that respects and promotes out-of-the-box thinking. This is challenging for many large, traditional employers that are generally very formal, hierarchical and resistant to change.

While many organizations can point to companies such as Google and say they want to be innovative like them, this kind of transformation doesn’t happen overnight — nor is it even appropriate for every organization. High-tech companies are staffed mainly by knowledge workers who thrive in a creative atmosphere. Such an environment might not work as well, for example, at a bank or retailer.

Having an open office with slides, pool tables and pods for napping isn’t for every employer. But that’s not to say others can’t learn from innovative organizations such as Google.

Aside from the built environment — which can inspire and facilitate creativity — organizations can create a culture that helps foster and reward innovation. And HR is positioned to help drive and manage cultural change.

A culture that truly values innovation is one where it is safe to speak up. Innovative cultures can be less hierarchical and have an empowered workforce where front-line employees have the authority to make routine decisions impacting their own work.

It is also important for senior leaders to respectfully listen to and consider ideas — no matter where they originate. After all, front-line employees are generally the ones closest to the customer.

In fact, innovative organizations are generally highly customer-centric. Such employers recognize that innovative ideas and suggestions can also come from the customers themselves.

Organizations that are serious about driving innovation have a healthy attitude towards risk and tolerate a certain amount of failure. Being too afraid of failure can lead to a culture that’s too conservative and risk-averse. If you’re not willing to take at least some risk, you will never be able to innovate or grow.

Cultural change needs to be reinforced with proper change management interventions and communications. Senior leaders and HR also need to be seen as modelling appropriate behaviours.

Promoting innovation

The organization needs to reward and incent creativity and innovation in its total rewards management and performance management programs. Suggestion schemes can also be set up whereby employees receive a bonus for making suggestions or recommendations that ultimately result in increased revenue or decreased costs for the organization.

HR can also help foster innovation by creating and implementing an appropriate organizational structure and design. For example, a divisional or product-based structure might be best suited for driving product innovation.

While you can’t really train someone to be innovative, HR can facilitate innovation forums and workshops in which employees are encouraged to come up with new ideas. Once all of the ideas are documented, they are typically ranked and voted on by the executive team, with the best ideas moving on to “proof of concept” stage and eventual approval and implementation.

Another idea is to develop a corporate “skunkworks” program to develop and champion innovative product ideas that are then developed outside the organization’s traditional hierarchy and infrastructure. 

Similarly, some employers have “intrapreneurship” programs in which employees are encouraged to act like entrepreneurs within the organization.

At Google, employees have reportedly been empowered to spend up to 20 per cent of their time on side projects that don’t necessarily relate to their everyday roles — though some commentators suggest there are parameters around those projects, which should relate somehow to Google’s overall goals and objectives.  

Regardless of which types of innovation programs are implemented, however, organizations must be prepared to spend money and provide sufficient funding to the projects that are ultimately chosen to move forward.

Brian Kreissl is the Toronto-based product development manager for Carswell’s human resources, OH&S, payroll and records retention products and solutions. For more information, visit

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