6 min read

The Importance of Innovation from an HR Perspective

The Importance of Innovation from an HR Perspective
Maggie Franz

Maggie Franz

Photo by Christina Morillo

How open innovation can stem the tide of millennials leaving, and attract new top talent.

As millennials gain experience and look to build their skill sets, more are leaving good jobs in corporate environments to work in startups. This is leaving seasoned HR management level staff wondering what is driving these younger employees to leave a sustainable environment with a recognizable name and upward mobility, to work in a more volatile or less stable company, in some cases making less money and with lesser quality benefits.

The answer lies in the opportunity for challenge and personal growth. Startups by their nature, need to be more agile and achieve rapid growth in order to attain market share and sustainability. This requires them to listen to the ideas of all employees, challenging team members to think outside of the box, to get creative and run experiments (an opportunity not afforded to them in the corporate setting).

In large corporate companies, the focus tends to be on executing, rather than searching. What we mean by this is that their focus is on the legacy products which customers are buying. If innovation is embraced, its core innovation, otherwise known as improvements to these existing products or services. Employees are not encouraged to generate ideas that will revolutionize the business, because business is good. If there is an innovation department, it tends to be comprised of a small team of experienced individuals and set in a completely separate offsite location, so as not to distract these other employees.  

But millennials are seeing startups, incubators and innovative companies and getting distracted on their own time, and leaving these green pastures for the chance to get involved with these shiny new startups that lack the rigidity of corporate life. Millennials want to have a stake in their employer, to feel valued and able to make an impact. This is possible in these startups, and not so much in large corporations. In turn, they become disenfranchised and easily swept up by these exciting and creative smaller organizations churning out exciting new products which could eventually, disrupt an industry.

How can Open Innovation Help HR Managers?

By definition open innovation, means inviting different people from different backgrounds into challenges, idea jams, hackathons, etc. and applying their creativity to solve problems or generate new forms of business. If implemented in a sustainable manner, (which we’ll get to in a moment), open innovation can be a win win for managers, c-suite executives and hr personnel.  

Open innovation engages team members who currently feel undervalued, teaches or trains them in various facets of innovation and business intelligence, while generating improvements or new products, services, processes, target markets, etc.

How to implement a sustainable innovation program, incrementally.

Step 1: Create a Home for Ideas

Provide your employees with a dedicated space where they can submit their ideas. This space should provide the employee with ownership of their idea, a means for colleagues to interact with the ideator around the idea, and visibility into any developments on the ideas.

Step 2: Training Through Process and Refinement

Just creating a receptacle for ideas is not enough. If nothing ever happens with the ideas that are submitted, employees will become disenfranchised and stop submitting ideas, leaving you right back where you started. The next step is to design a process for the ideas after they have been submitted. This process should include the refinement and improvement of the initial ideas, and a juried voting process (by peers, management or both).

As ideas are refined, and questions are asked of the ideators, those employees will learn and submit ideas of better quality over time. This benefits both the individual employee from a personal growth standpoint, but also the organization, as the time from ideation to project implementation will be shortened. This education process will also cut down on the idea noise, or the high number of partially formed ideas that an organization might experience at the beginning of their open innovation program.

An oversimplified example of this process might like this: Ideas are submitted on a rolling basis by employees from all of the organization. Once a month, a panel of managers will review the ideas, and select 5-10 ideas for refinement. Employees will be asked to engage around these ideas, with managers also weighing in. Then the ideas will be evaluated a second time, and 3 will be chosen to move on to the next round. Here, the ideator will work more closely with a team of managers to research the idea more extensively, to build a business case and design any necessary experimentation. After this phase, each idea will be evaluated and approved or denied from moving onto being implemented as a project.

Step 3: Set Aside Time, a Workspace, and Budget

C-suite executives will need to work with individual managers to approve and support this process, as it will necessarily involve taking different team members away from their day to day activities within reason. Some managers may have a negative reaction to this idea, as they may view your innovation initiatives as a threat to their individual goals, but over time and with specific projects to use as examples, you can create adoption by the managers across your organization. As the innovation program matures, you may consider changing or modifying some of their goals and the managerial incentive structure to include stretch goals or to place an emphasis on innovation products created at a departmental level.

A workspace or idea workshop, much like a sandbox, will provide a safe space for team members to explore their creativity and try out different ideas before submitted them. By allowing people to have the time and space to think and explore, this workspace will foster a higher number of better quality ideas. Creating a workspace enables employees to get up from their desks, move around, and think with an elastic childlike mind. It will improve the overall daily work experience for employees. Dedicating such a space will also demonstrate that the overall organization and c-suite level executives values not just the team members, but their personal development and creativity as well.

Lastly, setting aside a budget is essential to see some of the ideas that are submitted, through all the way to becoming a real, recognizable impact in your business. There are a number of ways to source a budget for these projects, whether it’s allocating money from other places in the existing budget, or using incremental core innovations to generate money to reinvest in future innovation projects, setting aside funding will enable you to create a sustainable open innovation program within your organization.

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