IDEAS FOR LEADERS: HR Policies Can Kill Innovation But HR Can Also Be A Great Encourager of Innovation!

This was written by Karl Moore with Phil LeNir and Diane Boulet and published in Forbes

HR often kills innovation. They are seen to get in the way of the business rather than help it along. We wrote that in January.  This time we want to flip that on its head and focus on the outstanding HR people we have worked with who have been at the centre of driving innovation.

Most will agree that the people in the organization are the most important component to sustained business results.  Weighing the accuracy of this statement, it follows that HR is your organizations most critical sector, affecting the people in, and thus the success of, your organization at all points from hiring to policies and programs, performance management, and succession planning.   So, why haven’t you placed your smartest talent in charge of HR?  Is your HR team comprised of the right people, prepared to catalyze your business’s success through innovation?

After we finished our last piece on how HR Kills Innovation, we realized the opposite is also true: HR can form the basis for innovation.  It is well recognized that business value is generated and regenerated through innovation and your people strategy department (HR) can be the key channel to increasing innovation through people in the workplace.

But to be a key driver of innovation, HR must be innovative.

Imagine an organization with a head of HR that focuses on measuring their department against best practices, plays it safe, and ensures every initiative has a quantifiable ROI? Sound familiar?  How is HR supposed to drive and support an innovative workforce when caution and risk aversion is their main priority?  These organizations that hold fast to traditional approaches to HR and discourage experimentation, risk operating machine-like enterprises, following, but incapable of rising above, industry norms.  What is wrong with this picture?

The mindset and culture of your HR team has an exponential impact on the entire organization: everyone is influenced by HR.  Therefore, changing your organization and becoming more successful and innovative begins by teasing apart your beliefs on this role.  Who is in a better position to campaign for and express the culture and needs of your organization at all touch points (hiring, policies and programs, new employee on-boarding, succession planning, performance management, etc.) than HR?

Who promotes and embodies everything your organization stands for?  HR leaders can translate your organization’s business strategies into cohesive and efficient people strategies.  They can be the link between the leaders and the business enablers – your people.  Strategic HR management plays a critical role in the organization but if your organization’s prevailing mindset is conservative, your HR will fall prey to this strategy.

Is your HR team scared to take a chance?

Are they paralyzed in the face of innovation?

So, how do you push your HR team into a more innovative mindset?  Innovation at Google does not come from their HR team and employees measuring themselves against best practices.  Similarly, Zappos did not become a billion dollar industry in less than 10 years selling shoes online by following industry norms in HR – they innovated.

How many experiments in HR policies have you allowed in the past twelve months?  How about an HR policy that offers all new employees a $2,000 incentive to quit?  This is what Zappos does, and though it goes against the grain, it is perhaps one of the most cost effective means of ensuring everyone in the organization is happy and satisfied with their jobs.

How about making everyone’s salary public knowledge?  This is Ricardo Semler’s method at SEMCO in Brazil.  Companies, such as Google, Amazon, Facebook, Microsoft, and Apple, offer many examples of innovations in HR policies leading to large successes.

Innovation is never a sure thing.  In fact, it is almost always a gamble.  Any venture capitalist will tell you that while they are always looking for greater than 10 times return on their investments, they also expect a pile of failures along the way.  This contradicts an HR mainstay: ROI.  Organizations with HR departments that avoid risk-taking for fear of not justifying every new policy through a black and white ROI stifle business growth and potential.

Perhaps it all starts in the beginning: do you even expect HR to be innovative?  If not, ask yourself who cares about the bottom line.  To increase innovation in the organization, leaders must work together with HR towards the delivery of innovative business and people strategies.

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Phil LeNir is Executive Director of Coachingourselves, where he works closely with Henry Mintzberg and Diane Boulet is Senior Director of Corporate Development, Brother Canada.

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The Organization Optimizer identifies how the management, employees and customers perceive innovation opportunities within the organization and what capabilities the organization requires to drive innovation.