The best and most disruptive innovation outcomes occur when the right combination of the right culture, talent, leadership, vision and engagement is in place. A good example of the convergence between HR and innovation is Lend Lease, the highly successful global construction company, which has married these two portfolios by appointing Michael Vavakis as Global Head of HR and Global Head of Innovation.

Why Is Innovation Not Working in Most Companies?

According to FusionLabs CEO Patrick Crooks, many companies are being smarter about managing their innovation portfolio by demanding more accountability for innovation efforts but large companies in particular continue to struggle with scaling innovations up and making them more systemic. After an initial burst of excitement, executives often can’t see the long term benefits. Often an organisation’s rigid culture and institutionalised thinking attack new ideas and kill them during embryonic stages. Well-intentioned innovation initiatives can have brilliant short term success but limited longevity, for instance:

  • Crowdsourcing ideas: you receive too many ideas, the funnel gets clogged and all cannot be responded to which leads to disengagement
  • Hackathons: a good way to inspire creative thinking in a short space of time but they don’t embed innovation systemically in the organisation
  • Skunk works: the knowledge of how to pull off breakthrough innovation tends to get stuck inside the group and never gets integrated into the broader company. Also, if people are cycled through the skunk works then the magic chemistry that worked once isn’t guaranteed to work again
  • Lab Environment: innovation can thrive in a separate space, free of corporate constraints, but the new ideas are rejected or die a slow death upon re-entry back into the corporate environment.

These are some common barriers when trying to achieve innovation outcomes:

  • Fear of failure
  • Short term metrics
  • How people are incentivised
  • Fixed mindsets in assuming customer needs
  • Integrating innovation as a culture, mindset and process systemically across the whole company
  • Senior executives don't want to take on the risk
  • No one wants to take on the budget

How Can HR Solve For This?

HR done well can unleash the human innovation potential of an organisation. It can be the difference between success and failure, the difference between existing in five years time and not.

HR, together with the executive leadership team, has a crucial part to play in overcoming these barriers to innovation. The right culture, organisational and team design, processes, talent, performance systems, leadership capability and workforce planning are all crucial factors in an organisation’s innovative effectiveness. Think of how important people and culture are to the world’s most innovative companies such as Google, Apple, Microsoft/LinkedIn, Unilever, Tesla, Atlassian and Coca-Cola.

Tips for Corporate Innovation:

1. Create a Culture of Innovation

Check out this video on Spotify's Engineering Culture This is a must view if you’re looking to move the dial on culture.

2. Identify the Problem you are Trying to Solve

Use Design Thinking or other innovation techniques to identify the problem you are trying to solve. Innovation is all about finding the motivation of the individual. Look down lots of rabbit holes to identify surprising insights and unexpected customer needs. Set a goal as to how many potential solutions you want to look at. The really exciting ones come at around number 10 or 11. This is where we start thinking beyond the obvious. Socialise the prototype in a raw format and you'll get more constructive feedback than sending a finished product.

3. Start Niche, Start Small and Grow Incrementally

  • Look for a niche, extreme customer need, build a product to solve that problem and then build that product for the mass market
  • Prove your concept on a small scale and then you earn the right to do the next big thing

4. Learn, Borrow, Forget

  • Learn – be a learning organisation
  • Borrow – ideas and suggestions
  • Forget – let go of previous institutionalised thinking and forget the things that will hold you back.

5. Democratise Innovation

Good ideas can come from anywhere. Cross-functional teams tend to work best. Creating an internal Air Tasker type of environment can work well because it allows people to give extra contribution if they so desire.

The most innovative companies tend to have self-empowering teams, high risk tolerance, are able to de-layer the organisation and can “minimise the blast radius” of new ideas going wrong. They have people with unwavering belief and passion, entrepreneurial grit and diversity of thought. But over-riding all of this is the need to have a CEO who will put his or her career on the line for it.

HR has an exciting role to play in embedding innovation across organisations. It is HR that joins the dots and partners with leaders to create a hotbed for innovation by fostering the right culture, talent, capability, metrics and rewards to get there.

ChapmanCG is a global search firm specialising in HR. Together with Fusion Labs, Fiona Jury and Felicity Gray facilitated two Innovation Workshops for HR Leaders in Sydney on 18th and 19th October 2016 as part of the ChapmanCG global HR Networking series. Morgan Stanley and Lend Lease hosted these sessions with attendance by HR Leaders from Barclays, Colgate-Palmolive, Commonwealth Bank, Novartis, QBE, Sanitarium, SunRice, UBS, Virgin and Woolworths amongst many others.

Fusion Labs is a corporate innovation company in Sydney with a track record of achieving significant innovation outcomes for large corporates in Australia. For more info contact Patrick Crooks, CEO, or Annabel Murphy at Fusion Labs via email amurphy@fusionlabs.com.au