If an organization is aiming to be innovative and at the forefront, its Innovation and HR strategies should be integrated to ensure development and progress. Short-term as well as long-term.
Changed conditions for competitiveness
Today, most companies live in a reality characterized by rapid changes in all from demand to technological solutions. Recently, there was an article in the Harvard Business Review on how Porter’s five forces model has become out of date.
Being the largest player with the most resources are no longer a clear competitive advantage. The social revolution and the rapid market changes have destroyed permanent entry barriers and replaced them with temporary entry barriers and benefits. The long-term strategies become more of a long term objective and the companies’ strategy exercises more of the character “What are we really good at and how can we use it?”.
The change forces companies to a constant renewal, to be innovative. Innovation is not just about product development but also about renewal of the business model, distribution, processes and the entire ecosystem around the organization. It is about developing and changing in order to meet the customer needs in a way that the competitors are not able to.
Why some succeed and others do not
Each year, Booz & Company releases a report on how the companies with the highest investments in research and development develop financially.
The two latest reports have indicated the importance of the company’s culture and the ability to progress and take advantage of one’s resources. Innovation is driven by technological knowledge and market knowledge. Skills, knowledge and functioning processes are key for succeeding with the innovation strategy.
The link between Human Resource Management and Innovation Management has become more international established. In Sweden, this synergy is still relatively unexploited.
But considering the growing interest in innovation and business innovation capacity, we think that innovation can and should be the next big HR trend.
Actually, HR and innovation is a rather obvious combination. A successful innovation strategy requires that the co-workers are committed and understand the purpose.
Quite naturally, co-workers feel a certain fear for changes, having thoughts like: “Is there a risk that my job will disappear?” So it’s about getting them to feel committed to an uncertain future by measuring and rewarding the right things.
Another important role for HR will be to build up the company with the right kind of individuals and in the right combinations, which can create new creative solutions that gradually can be carried off.
The world-leading innovation and design company IDEO has identified ten innovation types required for an effective innovation work. In this context there is room for developing the recruitment work to ensure that all ten innovation types are represented in the company.
Competence development also becomes an essential tool. Through training, education and organizational learning you can ensure the technology and market competence needed for succeeding in innovation strategy.
Working with the corporate culture is rarely the HR function’s responsibility. But through great efforts to improve the organizational learning, offer leadership development and work to build high performance teams, HR can help create a creative and innovative business environment.
We need to improve on building a culture that promotes the specific competence within the company and highlight it.
Innovation and HR – a mutual dependence
An effective innovation work requires the innovation strategy to be linked to the HR strategy and the HR initiatives chosen by the company.
The management needs to be aware of how different HR activities, such as changes of benefits and policies, affect people and their innovative capabilities. Therefore, innovation management and HR management cannot function as two separate entities without understanding of or connection to each other and the overall business strategy.
I hope to be able to continue our work and take this one step further; to substantially develop those HR initiatives needed for each innovation strategy.