Innovate your way out of the downturn

The Chartered Management Institute’s (CMI) recent Innovation for Recovery research, conducted in partnership with the National Endowment for Science, Technology and the Arts (Nesta), examined the proliferation of innovative working practices in the UK, and revealed that managers are placing greater emphasis on innovation as a method of driving economic recovery.

More innovation in the workplace has significant ramifications for the HR function, requiring as it does a fresh look at the search for traditional skill-sets. Where once the dominant call was for individuals with experience and know-how, now employers want to find people who are not just tied to the past, but are willing to explore something different.

What is ‘innovation’?

Nesta defines innovation as any type of change associated with newness. Of course the term “innovation” is open to interpretation and approaches to it vary widely between organisations and industry sectors. This is one of the great things about innovating. There are lots of ways to do it and it is open to everyone. In essence, innovation is about sharing ideas, then working out ways to implement them.

Most managers (78%) report that innovation is now very important to their organisation’s agenda in terms of products, processes or business models. So as well as taking bigger, bolder steps to foster a culture of innovation within their businesses, HR departments are increasingly being asked to find and develop individuals who can think and work innovatively.

Changing attitudes

What has brought about this change in attitude? Innovation isn’t a new concept and economists have consistently reinforced its importance as a major economic driver. But it would seem that the recent downturn has resulted in a shift of emphasis towards encouraging innovative practices. A quarter of managers believe that senior staff will spend more of their time on innovation than on day-to-day operations in 2010 and beyond. Furthermore, eight in 10 managers agree that innovation is now an essential part of their job role. From an HR perspective, then, it isn’t just about finding new skill-sets in new recruits. It’s just as important to ensure that roles are developed to reflect the requirements for current employees.

Yet the challenge facing many organisations is how to foster a culture in which innovation is encouraged and individuals feel uninhibited about suggesting ways to bring about change and improvements.

Look to leaders

This must, of course, come from the top. Support and openness to innovation among managers and senior staff is crucial. The Innovation for Recovery research reveals that four in 10 respondents point to the role of leaders in encouraging innovation, while almost one-third highlight the importance of setting up the right team of people. Only 18% of those polled by CMI consider incentives or reward programmes and dedicated resources for the development of ideas as essential to innovative working. This reinforces the notion that innovation can occur as long as the right mix of people are in place and contradicts those who argue that the challenges of the current economic climate make innovation difficult, if not impossible.

Instead, according to the research, the recession is having some positive effects on teamwork. Just over half (54%) of respondents claim that team members have become more co-operative and willing to combine their efforts and two-thirds (69%) say they now benefit from a shared “we’re in it together” attitude. A similar proportion (66%) also say the general management style they increasingly see is participative and collaborative, again, good for fostering the right conditions for innovation.

Spot the winners

If innovation is about people, then it goes without saying that a significant challenge facing employers is to attract and then manage the right people for the job. The most innovative individuals are those who are capable of open thinking and receptive to ideas, good at problem solving and able to demonstrate initiative. An organisation that has a reputation for innovation will find it easier to recruit individuals who possess these kinds of qualities.

It’s clear that employers recognise the need to innovate, which is a step in the right direction. But one of the deepest recessions in UK economic history has undoubtedly made some organisations more risk-averse. Fear of failure is identified by one-third of large organisations as a significant barrier to their capacity to innovate. Moreover, the demands of economic recovery place additional pressure on managers and restrict their time. When faced with these obstacles, it’s understandable that, for some, demonstrating innovative practices is an unwanted bolt-on to the everyday job.

Organisations need to overcome these barriers by empowering staff. Successful innovation is the result of collaboration, feeling comfortable about sharing ideas, and a willingness to take risks. We are on the brink of economic recovery and if we allow the recession to be a catalyst for innovation the financial crisis will leave us with a legacy far more positive than we thought possible.

Ruth Spellman, chief executive, Chartered Management Institute

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