How can HR help to innovate in research and development?

Famous companies such as Amazon, Apple, Google, and Coca-Cola often spring to mind when considering “organizational innovation.” Many may credit the companies’ product and financial standings to their creativity. In reality, the shared element among these organizations is that their personnel strategy is oriented towards promoting a culture of innovation, supported by strong research and development initiatives.

What does organizational innovation attempt to achieve?

Nonetheless, companies that continue to implement organizational innovation can sustain employee engagement, recruit top talent, and offer value to their clients. They can also build organizations that support an innovative culture, often leveraging research and development to drive these efforts.  To attract top talent and maintain a creative culture among current employees, human resources plays a critical role—the necessity for innovation within organizations in the current evolving environment. Research conducted by McKinsey revealed that 84% of CEOs regard innovation as essential for growth, with research and development as a core component of this strategy. In addition, as we’ve observed lately, a lack of innovation can result in a business’s stagnation and potentially its closure. Throughout the pandemic, most businesses concentrated on preserving operational continuity, yet it also triggered swift changes in our work methods, customer expectations, and fresh opportunities emerging from an evolving (and still evolving) environment. Indeed, studies have indicated that companies prioritizing growth and innovation in times of crisis often surpass rivals that resort to layoffs. After the pandemic and with new crises emerging, organizations will still confront the necessity to innovate and adjust. These offer chances (and obstacles) to capitalize on and spur innovation.

What does organizational innovation mean?                       

Organizational innovation involves adopting and executing fresh ideas, strategies, and techniques to develop new products and services. Organizational innovation aims to generate value and should result in business growth. Certain organizations innovate merely for the sake of novelty – however, genuine innovation is the creative impulse that propels the organization forward and brings value to its essential stakeholders. A strong focus on research and development often supports these efforts, driving innovation through systematic exploration and implementation of new ideas.

Organizational creativity:

• Provides you with a benefit: It represents a step forward from the earlier method, item, or service frequently enabled by research and development to create novel solutions.
• Simplifies matters: It streamlines experiences for all – clients, employees, and essential stakeholders.
• Produces fresh concepts: This entails brainstorming and considering creative ideas, along with employing strategic planning and decision-making to cultivate new concepts. Here, research and development play a vital role in turning ideas into actionable innovations.

The crucial function of HR in driving organizational innovation

Positions deemed crucial for innovation typically encompass roles in areas such as data, automation, AI, robotics, and more. However, HR remains the most vital element for innovation within organizations. Research carried out by KPMG indicates that a company’s success is not influenced by its research and development budget. In contrast, KPMG’s findings indicate that there is no notable correlation between financial performance and innovation. Moreover, technology does not assume the most significant role either. Rather, research indicates that the effectiveness of organizational innovation strategies relies heavily on their emphasis on individuals and human capital. These consist of:

•   Recruiting, attracting, and rewarding exceptional talent for creativity
• Fostering an innovative culture through the promotion and acknowledgment of entrepreneurship and willingness to take risks which can be enhanced by leveraging research and development findings.
•   Fostering employees’ ability to innovate.

HR serves as the ideal strategic business partner to foster and maintain an innovative culture while attracting and motivating essential talent for innovation. HR not only possesses an essential role in organizational innovation, but Human Resources has effectively shown how to adopt innovation. Resources have effectively shown how to adopt innovation, frequently aligning their strategies with research and development efforts to drive impactful results.

Ways HR can integrate innovation into the organization

Culture plays a vital role in fostering innovation within organizations

When examining innovative firms (from Pixar to Procter & Gamble, from Tata to Toyota, Apple, and Google), the essential element of innovation is culture. HR can significantly contribute to fostering a culture of innovation by aligning its strategies with research and development efforts.

Promote taking risks

For organizational innovation to flourish, it is essential that employees are permitted to take risks and, crucially, are permitted to fail. Leaders frequently struggle with accepting failures; however, a hesitant attitude toward new endeavors due to fear of failure can swiftly hinder innovation. HR should assist leaders by advising them on the importance of accepting risk-taking and perceiving failure as a chance to understand what is most significant to customers. This risk-taking environment, supported by insights from research and development, enables organizations to experiment and refine strategies for meaningful innovation.

What HR is capable of?

• Allow employee autonomy: A method for HR to promote risk-taking is by assisting managers in establishing an environment that fosters employee autonomy. Workers ought to be permitted to show creativity and adaptability in their tasks. Instruct managers to cultivate coaching abilities to make this possible. When supported by insights from research and development, such autonomy can be directed toward meaningful innovation.
• Innovation projects: Establish projects that simplify risk-taking, like introducing an ‘innovation day,’ organizing a ‘hackathon,’ or hosting a Dragon Den-style competition to promote creativity.
• Encourage risk-taking: For instance, the Tata Group conducts a yearly event known as the InnoVista Awards. It recognizes teams of employees throughout the organization for executing the most creative and effective concepts.
• Steer clear of punitive performance evaluations: In what manner are performance evaluations carried out? With genuineness? Or do managers merely perform their duties and check off the list? Additionally, punitive performance evaluations will diminish innovative actions among employees. Not every choice will result in a positive outcome, but some will, so keep persevering! Encouraging employees to take risks, with the support of research and development, creates a pathway to innovation.
• Foster psychological safety: By emphasizing the right values and communication methods, HR can significantly contribute to establishing psychological safety within the workplace. In the absence of psychological safety, neither risk-taking nor innovation will occur in the workplace.

Create systems to foster innovation.

HR needs to offer the ‘platform’ for innovation by establishing processes and policies that foster creativity within the organization. This might seem paradoxical, but processes provide employees with the framework required to innovate within. When generating a new idea or concept, what are the bounds in which an employee is encouraged to function? A defined procedure will allow employees to securely brainstorm and evaluate ideas. For instance, Nordstrom established an innovation lab to develop and evaluate ideas, whereas Dow employs a talent allocation system to assemble teams with the appropriate mix of innovative abilities. Such efforts align closely with research and development, ensuring structured creativity and practical applications.

What HR is capable of?

• Create a secure atmosphere that allows employees to freely share their ideas. This may serve as a physical location for innovation or a group of imaginative thinkers and leaders that promote a setting of creativity and teamwork with well-established guidelines.
• Allocate time to foster creativity. Routine business often allows minimal time for creative thinking, indicating that it must be incorporated into the workday. The organization also designated ‘inner work’ days when the office shuts down, and staff halt ‘outer work’ (emails and calls) to concentrate on reflective activities such as reading, walking, and mindfulness. These practices, enriched by research and development, can lead to well-informed and innovative outcomes.

Track innovation metrics and include innovation in KPIs

Since innovation is included in an employee’s objectives, they will be motivated to embrace them. Furthermore, links innovation to performance evaluations. Innovation may appear to be an abstract idea, yet it is crucial to assess its effects on the organization. Monitoring innovation metrics can assist HR in measuring its effect on business results.

Metrics that HR can monitor:

Certain metrics that HR professionals can monitor to evaluate the impact consist of:

• Staff involvement
• Time allocated for innovation
• Count of individuals trained in innovation skills
• Assessments to identify whether innovation is ingrained within the organization

Tying these metrics to research and development initiatives ensures that innovation aligns with broader organizational goals.

Define incentives and acknowledgment.

In what ways is innovation recognized? Linking salary and bonuses to innovation is a key method to achieve this. Nonetheless, it also promotes creativity by permitting workers to explore their concepts. Amazon launched a “Just Do It Award.” The accolade honors employees who demonstrate creativity and a proactive approach to their jobs. And this is their prize – a large shoe. A single large shoe. This is the most sought-after award at Amazon, illustrating that it doesn’t always need to be financial and that acknowledgement has a significant influence.

What Human Resources can accomplish:

• Connect job possibilities to creativity. For instance, offer scholarships or brief assignments on creative projects.
• Establish a non-financial innovation recognition or incentive. Acknowledge employees who demonstrate innovative actions, regardless of whether these actions result in success or failure.

Recruit for creativity and develop in-house skills.

To achieve organizational innovation, it’s essential to draw in the best employees. Creating an innovative organization will enhance your appeal to top talent in the marketplace. Enhancing innovation abilities while fostering career advancement can enable the organization to make better use of its current employees.

What HR is capable of?

• Organize your interviews to evaluate creativity. This could involve requesting examples of situations where the candidate demonstrated innovative actions or presenting a case study that requires them to showcase their most creative selves.
• Create career advancement structures that promote interdepartmental collaboration and professional development.

Encourage teamwork

Collaboration fosters innovation. This was demonstrated during the pandemic when businesses had to establish links among individuals through wider virtual networks, leading to a notable rise in innovation initiatives. Virtual and remote work also allowed creative companies to assist employees in forming and maintaining the connections essential for generating new concepts. This also led to businesses expanding the range of thinkers who generate excellent ideas.

What HR is capable of:

• Question the existing norms regarding ‘this is how we operate’ and broaden the concept of collaboration within your company and throughout processes. Align this mindset with research and development to challenge traditional methods and explore new opportunities.
• Facilitate collaboration either in a virtual setting or in a physical space. For instance, by establishing a designated area where individuals can step away from their regular work setting and promote in-person interaction or online meetings specifically focused on brainstorming and discussion tied to research and development objectives.

Essential insight

The significance of HR in fostering research and development and driving organizational innovation is set to grow even more in the years ahead. The rise of novel HR positions, including Human Machine Teaming Manager, People Data Specialist, and Digital Evangelist, indicates the direction in which the HR function is heading. To maintain a competitive edge, HR needs to assume its proper role in fostering a culture of innovation research, and development throughout the organization.