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HR Leadership Column

Innovation by HR

With business picking up, now is the time for HR leaders to increase employee innovation in their organizations by leveraging performance-management, assessment and compensation strategies. While initiatives will vary by company and industry, HR needs to take responsibility for fostering a culture of innovation.

Monday, April 18, 2011
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At the recent Human Resource Executive ForumĀ® in New York, I had the privilege of moderating a panel discussion on HR's role in driving innovation and growth within companies. It was a great panel -- with CHROs Randy MacDonald of IBM, Mirian Graddick-Weir of Merck, Dan Sullivan of Qualcomm, and Rich Floersch of McDonald's.

Each of them shared insights on ways they've approached the challenge of leveraging human capital to drive innovation within their organizations.

Strategies were as diverse as the companies, from using test stores to try new food products and continually innovate around processes, to creating a venture capital fund within the company to allow investment in new lines of business or allowing employees to submit ideas to peers for instant collaboration and communication.

Although some business authors urge companies to encourage risk taking by celebrating failure, all agreed that wasn't realistic. Instead, they said failure should be treated as a learning opportunity, with efforts made to dissect what may have gone wrong to improve the likelihood of successful innovation in future efforts.

You can read more about the session at HREOnlineTM's The Leader Board blog.

In preparation for the panel discussion, HREOnlineTM fielded a brief survey about what HR was doing on this subject of innovation and growth.

The results suggest that the panelists may not be typical of how the profession is driving innovation and growth. In fact, the results suggest that HR executives may not even be leveraging their HR expertise to really help.

In response to the survey, a large majority said that HR plays a significant role in fostering innovation at their organizations. But it's hard to understand how they know they're actually doing it, since a large majority also reported that the performance evaluation for HR leaders wasn't based, in any way, on the ability to foster innovation.

And although there are tools available to professionals to help foster innovation, most don't use them: more than two-thirds -- 71 percent -- don't use screening tools designed to bring in creative and innovative candidates; half -- 53 percent -- don't tie performance-management systems to driving innovation; and half -- 53 percent -- don't have any formalized suggestion system in place.

You can see all of the survey results here (PDF).

Is it possible that we think we're playing an important role in driving innovation in our organizations just because of how hard we're working and not because we have any data to support that conclusion? Perhaps.

Longitudinal research conducted at the University of Southern California by Ed Lawler, distinguished professor of business management, found something similar. His research shows that, since 1995, HR executives have reported they were spending more time on strategy than they did five to seven years ago. But when the percentages are compared to previous years, it was revealed that they are spending the same amount of time as in the past.

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Of course, it isn't easy to continually innovate and grow. After all, if driving innovation and growth was easy, everyone would be doing it well. The reality is that two-thirds of the companies on Fast Company's 2009 list of the 50 most innovative companies didn't make it onto the 2010 edition.

But, as we come out of a recession, HR professionals have an opportunity to help drive innovation in their organizations. As the economy continues to improve, companies will take on greater risks and push harder for more innovation.

HR executives just need to use the HR tools available to them, and leverage those tools to the organization's advantage.

Are you focusing on what changes might be necessary to your performance-management system to help shift the culture from one of risk-avoidance during a recession to one that encourages risk taking?

Are you using assessment tools to help identify candidates that will be more innovative for roles that demand innovation?

Will you ensure compensation systems reward employees who, despite being exhausted from weathering the economic storm, are fully engaged in driving innovation within the organization?

And will you know you're successful because you're allowing yourself to be held accountable for fostering a culture of innovation?

In short, don't be someone who just says that HR plays a significant role in fostering innovation.

Actually do it.

Susan R. Meisinger, former president and CEO of the Society for Human Resource Management, is an author, speaker and consultant on human resource management. She is on the board of directors of the National Academy of Human Resources.

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