How does HR innovation work? (The HR innovation cycle)

After having defined HR innovation and having explained why it is important in previous posts, we are going to concentrate today on how HR innovation actually works. To do so, I propose to use what I call the “HR innovation cycle”, which is a personal interpretation of the research carried out by Amarakoon,  Weerawardena & Verreynne  (see references at the end of the post).

The HR innovation cycle explains how exactly successful HR innovations and developed in organizations. This cycle is composed by 3 phases: Learning & opportunities for HR innovation, solutions (HR innovations) and benefits of this innovations. I summarize these phases in the chart below and I present each of them afterwards:

HR innovation cycle

1. LEARNING & OPPORTUNITIES

 a) External and internal learning: HR professionals analyze and learn from the internal and external environment of their organization. More concretely, they acquire knowledge and inspiration from/with external actors (eg. competitors, partners, clients) as well as internal stakeholders (eg. HR colleagues, managers, experts).

b) Opportunities identification: This learning and inspiration is then used to identify opportunities for HR innovation, that is, improvements or needs in the organization for which HR innovation can be a source of competitive advantage. On top of the internal and external sources mentioned, opportunities can also come from new strategic orientations of the organization of course.

2. SOLUTIONS

a) HR innovation design: Once the opportunities have been identified, HR professionals need to come up with the concrete HR innovation(s) adding value to organizations. To do so, it can be useful to use innovation techniques such as design thinking, which boost collective intelligence and creativity. Indeed, Tim Brown (CEO of the famous design firm IDEO) mentions in his HBR article 3 key steps to design thinking: inspiration, ideation and implementation. And all of them can be found in the HR innovation cycle I am presenting.

b) HR innovation implementation: Once the HR innovation “ideation” and design are ready, it is critical that HR professionals ensure its right development and implementation to transform this idea into successful reality. Both in the design and the implementation phases, HR professionals need to partner and co-create with line managers to make sure they get both the input and the buy-in from business. Amarakoon et al. actually highlight that “firms who undertake a higher degree of HR innovation (…) involve line managers in design and development stages of HR innovation”.

3. BENEFITS

a) Added value & HR recognition: By proposing HR innovations that add value to organizations, HR credibility is strongly reinforced in the eyes of management and top management. This confirms their confidence in and recognition towards HR professionals.

 c) Top Management support: HR recognition is then translated into concrete top management endorsement to support and finance future added-value HR initiatives and innovations.

This top management support opens new perspectives to keep looking for new learning and opportunities in the organization, and the HR innovation cycle starts again and again…

References

Competitive Advantage Through Innovation (Amarakoon,  Weerawardena & Verreynne,  European Business Review,  September 2013)

HR innovations an opportunity for gaining competitive advantage: evidence from Australia (Amarakoon, Weerawardena & Verreynne, 11th International Conference on Business Management, 2014)

Design Thinking (Tim Brown, Harvard Business Review, 2008)

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Welcome to the Board of Millennials…

accor1

“Write with the door closed, rewrite with the door open” – Stephen King

Accor is a French hotel group which has been in the spotlight of French management press lately due to a very original initiative they just launched: a shadow Executive Committee, or “Comex” in French. This new committee is a sort of “Board of Millennials” in charge of challenging the company’s key decisions and helping Accor deeply revisit its digital strategy.

This “shadow Excom” is composed by 12 people between 25 and 35 years old, not only because this is the age of the founders of the new players reshaping the industry, such as Airbnb, but also because Accor declares that as of today, 90% of their decisions are made by executives who are older than 50. As well as a young commitee, this is also a very diversified one: 6 men and 6 women, 7 different nationalities, 5 to 12 years of experience in the company and very diverse backgrounds and profiles.

The objective of this “shadow Excom” is to challenge company’s key discussions and decisions by bringing fresh new ideas and points of view. More concretely, the mission of these Gen Y profiles is to propose specific recommendations to the actual Excom of the company on how they would approach some of Accor’s most pressing challenges and digital business stakes. To do so, these 12 young talents are given the same level of information than the actual Excom members, and they are also given the support of a coach to help them formalize their proposals prior to each Excom meeting.

According to Sébastien Bazin – Accor’s CEO, from now on, no important decision for the company will be taken without having listened and taken into consideration the ideas and proposals coming from these smart Millennials. In order to ensure as much fresh input and inspiration as possible, the members of this young committee have a one-year mandate after which they will be replaced by new Gen Y colleagues proposed by themselves.

Of course this initiative is strongly inspired on the more famous reverse mentoring, in which young generations challenge older colleagues on their digital practices or business ideas, but it is the first time I hear this takes place on a regular basis at the very top of a company. Only the time will tell if this is only a nice HR marketing initiative or a radical cultural change in this company, but I have to recognize I found the idea (and the courage to implement it) very inspiring…

What is HR Innovation?

Yellow umbrella4

At a time when firms strive for competitiveness, HR innovation can serve as a non-traditional, but vital source of competitive advantage”  (Amarakoon, Weerawardena & Verreynne)

As mentioned in a previous post, more and more attention starts being paid to HR innovation in organizations. However, very few definitions of what HR innovation is can still be found. The best definition I have read so far is proposed by the three Australian authors to which belongs the opening quote of today’s post. According to them, HR innovation can be defined as “an HR management activity/ practice/ programme/ system adopted by a firm that is new and value creating to the adopting firm”. These innovations can take place in one or more HR fields or practices, such as training, career management or compensation & benefits and the authors also highlight that “the degree of HR innovation differs based on the degree of newness, extent of change, number of employees affected, and nature of its outcomes” (see first reference at the end of the post).

HR innovation can be seen both as a process and as an outcome. These authors see HR innovation as an outcome and they mention two possible types of HR innovation outcomes: “proximal” outcomes (innovations in HR fields such as attraction, commitment, engagement and retention of employees) and “distal” outcomes (innovations in non-HR fields, such as productivity, market performance and financial gains). What is really interesting is that both types of outcomes are linked because “HR innovation results in proximal (HR) gains through which it influences distal (non HR) outcomes”. They mention several examples of companies which, thanks to HR innovations, improved employee turnover, absenteeism rates, commitment and engagement, what led to non-HR outcomes such as productivity improvement and product/service differentiation.

But HR innovation can also be seen as a process. In this case, we tend to focus on how the ideas emerge and how they are adopted and implemented in HR. There are several approaches and techniques which strongly contribute to this creative process, such as HR rapid prototyping or HR Hackathons. This is not today’s focus, but as I use some of these techniques in the HR innovation workshops I run, I will present some of them here in the future.

There are two types of HR innovations: radical and incremental. A radical HR innovation is for example the famous Google’s “20% Project”, in which the company proposed that staff worked on a company related project which interested each employee. This initiative has had very positive HR outcomes, such as improvement of employee motivation, performance and retention, as well as talent attraction. But this HR innovation has also business outcomes for the company, as the “20% Project” is the source of 50% of Google’s inventions, including Gmail, Google maps or Adsense. Many other disruptive HR innovations will be presented in this blog in the future, both in big organizations and in less known contexts, such as the American Major League Baseball (MLB).

Incremental HR innovations are improvements of existing HR practices that take place in organizations and, while they may be less spectacular that their radical counterparts, they also contribute to successful company transformation. Examples of incremental HR innovations can be, for companies not having these yet, the full digitalization of recruitment processes or the introduction of an internal confidential survey measuring employee engagement or employer branding. In all cases, according to research, both radical and incremental HR innovations can add value to organizations.

HR innovation can take place in one single HR field, such as recruitment or remuneration, but it can also happen in several HR fields at a time, therefore creating possible synergies among them. According to the abovementioned Australian authors, effective HR innovation implementation requires both an internal fit with other HR practices in the company and external fit with the organization’s strategic objectives. Speaking of strategy, how can HR innovation (further) constitute a source of competitive advantage for organizations? We will answer to this question in a future post soon!

References

Competitive Advantage Through HR Innovation (Amarakoon, Weerawardena & Verreynne, European Business Review, September 2013): http://www.europeanbusinessreview.com/?p=1079

HR innovations an opportunity for gaining competitive advantage: evidence from Australia (Amarakoon, Weerawardena & Verreynne, 11th International Conference on Business Management, 2014)

H(önsbä)R Innovation @ IKEA

IKEA

IKEA has often received “great place to work”-type awards from various institutions and its turnover happens to be much lower than its competitors. A part of this success is explained by the company by their flat organizational structure that encourages personal initiatives and employee empowerment. IKEA is also well known for having a strong culture that promotes work-life balance, work flexibility, diversity and creativity, which also reinforces their recognition as employer. The company also has a very innovative approach to HR management that contributes to their success, but some of its HR innovative practices are a bit less known out of the company. Let me share a few examples of inspiring and fun HR innovations that the company has implemented…

– Talent attraction field: « Fit quiz »:  Would you fit in the IKEA culture? An interactive online quiz allows external applicants to assess in real time to which extent their personal values resonate with IKEA’s ones, and therefore how likely they would be to be happy and succeed in that company. How does it work? You are proposed 10 multiple-choice questions such as “If I was a car designer, I would want to be known for making cars that…” or “I’ve got a great idea for a big project… I typically…”. You can earn a virtual IKEA piece of furniture after each answer which is in line with company values and step by step you furnish a virtual room representing the likelihood to succeed with them… so, would YOU fit in the IKEA culture? Don’t hesitate to give it a try by clicking here!

– Career Management field: « I want your job » philosophy: IKEA staff is allowed to identify a desired future position in the company and ask for coaching and advice by the person who has this job. This formalized “entrepreneurial approach” to career management breaks silos, opens new career perspectives for staff and boosts internal mobility. « Paddle Your Own Canoe » approach: With the support of their managers, IKEA workers can use a self-assessment tool to identify their strengths and weaknesses, figure out the ideal career path and establish an action plan including training and development elements.

– Employee empowerment and engagement: « Why sayers » program: IKEA employees are encouraged to give ideas to improve the IKEA stores and organization. Best ideas are tested is some stores and the most successful ones are made standard practices globally. On top of the business improvements and innovations that this program brings, it is also said to reinforce employee engagement, as they feel they can have a direct impact on the way a huge company like theirs works. And actually, this message is so strong that a recruitment campaign was built around the “we are looking for Why sayers” idea some time ago.

– Recruitment: “Assemble your career” campaign: why invest in an expensive recruitment campaign when you can leverage on your products to do the HR marketing for you? To watch a short and fun video about how the company implemented a very effective HR innovation idea in Australia, please click here (IKEA career instructions video).

And by the way, yes, Hönsbär is a real IKEA product!

 

Why focus on HR Innovation?

WHY2

Albert Einstein used to say that creativity is intelligence having fun. And I strongly believe that more creativity and fun would allow companies to find better and more innovative solutions to the People Management challenges they face. But concretely, how can this creativity be used to produce innovative outcomes? I particularly like Harvard Professor Theodore Levitt’s quote: “creativity is thinking up new things. Innovation is doing new things”. Therefore, HR innovation is not only having good ideas in the HR fields, but above all about making them happen and succeed in organizations.

Some HR teams are already leveraging on innovation to find alternative and more effective solutions to the challenges they face in HR fields such as recruitment, people development or career management, but this is only the beginning. Indeed, innovation has never been among the classical strengths of the HR function, but therefore, this also constitutes a unique opportunity for companies to build a new generation of really innovative HR professionals able to contribute in a more original and impactful way to the strategy of organizations.

According to few signs, HR innovation starts being (and above all will become) more and more critical in organizations. For example, in a recent study carried out by the Chartered Institute of Personnel and Development (CIPD) involving 300 HR and business leaders, HR innovation has even been highlighted as the top priority for HR professionals. Indeed, 35% of these HR leaders consider HR innovation as their most critical business priority beyond for example talent or performance management. Non-HR business leaders also highlight the importance of innovation in this same report.

Furthermore, in another recent study by the Economist Intelligence Unit, more that 1,500 executives were asked to identify the top challenges for their organizations over the next five to 10 years. The most critical challenge highlighted is people management (28% of the votes) and the second is innovation (20% of the votes). Is that random that people management and innovation are precisely the two most pressing challenges identified? I personally don’t think so!

The rising importance of HR innovation can also be observed on the field. Just to give an example (many other examples will follow in this blog), a Lab dedicated to HR innovation was launched some months ago in France, country in which I currently live. Supported both by public and private institutions, the “Lab HR” aims to boost and promote HR Innovation by bringing together key players in HR Innovation, such as start-ups, big companies or public actors.

Finally, a very inspiring book appeared last year : « The Rise of HR – wisdom from 73 thought leaders », by the HR Certification Institute and edited by Dave Ulrich among others. This book invites top HR leaders and experts worldwide to share their views on the main challenges HR professionals face and how this will shape the future of the HR function. It is a very inspiring book that I will probably further comment in future posts in this blog. What I find very striking is that despite the general HR orientation of the book, the words related to innovation (innovation, innovator, innovate, innovative) appear up to… 220 times ! This figure highlights, according to the world’s top HR leaders, how critical HR innovation will become in the close future. Well, enough for this first entry, I finish today’s post with an inspiring quotation of the book I just mentioned:

« HR as a profession should model what we ask organization leaders and employees to do, including (…) innovation – We should focus more on what can be than what has been, which requires innovation. Innovation can and will occur in HR services, business models, and mindsets. We should look for new, creative, and pioneering solutions to business problems » (page 4).

References:

« Innovation is top business priority for first time, finds CIPD HR Outlook » (CIPD article, 2016) : http://www.cipd.co.uk/pm/peoplemanagement/b/weblog/archive/2016/02/03/innovation-is-top-business-priority-for-first-time-finds-cipd-hr-outlook.aspx

« What’s Next: Future Global Trends Affecting Your Organization » (Chartered Institute of Personnel and Development, SHRM Foundation, 2014).

 « The Rise of HR – wisdom from 73 thought leaders », book (HR Certification Institute, 2015) : https://www.cipd.co.uk/binaries/the-rise-of-hr-wisdom-from-73-thought-leaders_2015.pdf