HR Square - Costas Markides & Frederik Anseel

What if we decided to take employee-driven innovation seriously?

HR Square masterclass 13-05-2014

Frederik AnseelGhent University

[email protected]: @fanseelWeb: fanseel.be

“Discussing the importance of innovation would be a waste of

your time”

Frederik Anseel HR & Innovation – 13-05-2014

“The most valuable resource for innovation remains largely untapped – the people-side of

innovation”


“40 years of psychological research provides us with a good scientific understanding of the

psychology of innovation and how to encourage it”

Objectives of my talk today


• Share scientific insights on 4 key resources that drive employee-driven

innovativion

• Formulate principles that can shape an innovative work environment and

daily work experiences of employees

• Translate these principles in actionable practices and HR-tools for

stimulating innovation

Employee innovation is determined by 4 resources


MOTIVATION

ENVIRONMENT

MOOD

EMPLOYEE INNOVATIO

N

KNOWLEDGE

(1) The motivational resource


• Being passionate about work fuels innovation

Passionate? Feeling competent and in control

Intrinsic motivation ρ = .24, variation 25%

Creative self-efficacy ρ = .33

• External incentives can foster or hinder one’s innovation

It depends!

Extrinsic motivation ρ = .14, variation 151%

It is not only about whether people like their job, it is also about whether they like to help others.

I enjoy the work itself!

I want to help others through my work!

Generates novel, but operable work-related ideas

“My co-workers will think worse of me if I often try

outnew approaches on my

job”“If I were to do something

innovative, my image in the

organization would be enhanced”

“Coming up with creative ideas helps me do well on

my job”

“Investigates and secures funds needed to

implementnew ideas”

Caring about your image does not help innovation trying new ideas to do a better job does!

“I consider diverse sources of information in

generatingnew ideas”

“My manager will publicly recognize those who are

Creative”

“I can decide on my own how to go about doing my

Work”

Empowered employees engage more often in creative processes when this is encouraged and valued by their supervisor.

I am not interested in making sure that you are here, that you are giving us so many

hours a day. We need people who will deliver a final

result.”

“If we do not let people do things the way they do, we will never know what they are really capable of and they will just follow our boarding school rules.”


Principle 1

“Focus on intrinsic motivation, by fostering feelings of

control and competence, and channel this motivation

towards innovation by setting the right cues”

(2) Environmental resources


• Perceptions of one’s jobe.g. autonomy ρ = .32

• Perceptions of one’s co-workerse.g. co-worker support ρ = .36

• Perceptions of one’s leadere.g. leader-member relationship ρ =.29

• Perceptions of one’s organizatione.g. Supportive resources ρ =.27

“In my organization, creative work receives appropriate

recognitionand praise”

“opportunities for personal growth and development are important to

me”

Also for people in routine jobs, recognition of creative work leads to more creative performance

“Desire to elicit high performance from

me.”

“Expresses anger at me when he/she is mad for another reason”

“Desire to make me feel bad about

myself.”

Abusive leadership hinders creativity, but less when individuals believe their leader just wants them to perform better.


Principle 2

“Structure employees’ work environment in such a way

that employees believe to be free and psychologically

safe in their job, and supported by their co-workers,

leaders and organization to innovate”

(3) Emotions as resources


• Both positive and negative moods can facilitate innovation• Whether the mood is activating makes the difference

=Dual-pathway of innovation

Do not solely focus on fostering positive moods. Creativity stems from a subtle interplay between positive and negative feelings.

Do not solely focus on fostering positive moods. Creativity stems from a subtle interplay between positive and negative feelings coupled to supervisor support


Principle 3

“Positive activating vibes energize employees to innovate,

but do not avoid a sense of crisis or urgency”

(4) Knowledge as resource


• Knowledge and information are key component of creativity

• Emphasis on knowledge gathering, development & sharinge.g. openess ρ =.19 – Intrinsic motivation to learn ρ =.21

“The manager encourages members to

share ideas with each other”

“Interact with my colleagues in this organization to

discusssuggestions and ideas”

“Available for sharing experiences with people

outside this organization”

Internal and external knowledge sharing can spur creativity and innovation. However, leaders have an important role in encouraging and facilitating these processes.

“I feel that using the Web 2.0 application is fun”

“When using the Web 2.0 application, I am absorbed

intensely in the activity”

Knowledge seeking and sharing through Web 2.0 tools contributes to employee creativity as employees experience more flow from these new tools than classic knowledge management tools

“How frequently do you directly ask your supervisor

for feedback about your work?”

By asking feedback directly on problems and ideas employees use a valuable source for creative solutions

“How frequently do you payattention to how your boss acts

toward you in order to understand how he/she perceives and

evaluates your work?

In competitive climates hiding your knowledge for others ultimately backfires on your own creativity


Principle 4

“No matter how much you motivate, energize and support

your employees, knowledge and information are the

currency of innovation. Organize for easy acces to

information and fluent sharing of knowledge”

“HR* can apply these 4 principals through its control over: ”


WORK DESIGN

LEARNING & DEVELOPMENT

PERFORMANCE MANAGEMENT

COMPENSATION & BENEFITS

INNOVATIVE MINDSET

INNOVATIVE PERFORMANCE

MOTIVATIONENVIRONMENTMOODKNOWLEDGE

*Today is about how to manage not about who to hire

HOW CAN HR INCREASE RESOURCES FOR EMPLOYEE INNOVATION THROUGH WORK DESIGN?



FOCUS ON THE MOTIVATION AND KNOWLEDGE PRINCIPLECustomize challenging jobs that target employees passion:-Negotiate I-deals -Create an internal project market for which employees can volunteer-Allow employees freetime to work on innovative projects and set goals-Spur a prosocial climate by creating interdependency and impact-Team interdependency leads to knowledge-sharing

HOW CAN HR INCREASE RESOURCES FOR EMPLOYEE INNOVATION THROUGH WORK DESIGN?

HOW CAN HR INCREASE THE FOUR RESOURCES THROUGH TRAINING & DEVELOPMENT?


HOW CAN HR INCREASE THE FOUR RESOURCES THROUGH TRAINING & DEVELOPMENT?


FOCUS ON THE KNOWLEDGE PRINCIPLE•Integrate challenges in people’s jobs in a strategic way in order to increase on-the-job learning•Systematically integrate after-event reviews in work as to employees can learn from their successes and failures •Integrate new professional social media in employees’ daily handling with each other www.yammer.com www.work.com www.cognistreamer.com •Train supervisors in encouraging and facilitating internal & external knowledge sharing and feedback-seeking in their team

http://www.yammer.com/

http://www.work.com/

http://www.cognistreamer.com/

HOW CAN HR INCREASE THE FOUR RESOURCES THROUGH PERFORMANCE MANAGEMENT?


HOW CAN HR INCREASE THE FOUR RESOURCES THROUGH PERFORMANCE MANAGEMENT?


FOCUS ON THE CONTEXT AND THE MOOD PRINCIPLEFacilitate progress instead of evaluating performance•Replace annual performance reviews by performance check-ins (Adobe)•Stimulate supervisors to reflect daily (checklist) on how they helped their team to make progress www.progressprinciple.com •Set creativity goals and focus both on the outcome and the process.•Psychological safety and support•Learn to capitalize on mood swings

http://www.progressprinciple.com/

HOW CAN HR APPLY THE PRINCIPLES THROUGH COMPENSATION & BENEFITS?


FOCUS ON THE MOTIVATION PRINCIPLE:I. HOW SHOULD WE REWARD TOP MANAGEMENT TO FOSTER

INNOVATION?

II. HOW SHOULD WE REWARD EMPLOYEES TO FOSTER INNOVATION? Individually or team-wise?

HOW SHOULD WE REWARD TOP MANAGEMENT TO FOSTER INNOVATION?


• Pay related to short-term goals: cost-cutting and less investments in R&D• Long-term benefits do not overcome this tendency• High-tech companies reward top management’s behavior and decisions,

e.g. R&D expenses, new patents or product launches, milestones in innovative projects, innovation-audit

HOW SHOULD WE REWARD EMPLOYEES TO FOSTER INNOVATION? Individually or team-wise?


Team rewarding:•Creates outcome interdependency•Stimulates information sharing •Facilitates cohesion•Enhances learning •Diminishes subgroup salienceCaution:•Social loafing – alternative hybrid rewarding

So, what have we learned here?

Benefit from the psychological science of innovation– Analyse your organization for motivation, work

environment, mood and knowledge– Seek how to adress those in HR-practices

1. Job design2. Learning and

development3. Performance

management4. Compensation and

benefits

And what about recruitment and selection?

Stay tuned….

Your management really values taking into account the customer’s opinion on the company's products and services, and spends a large amount of money every year on consumer research. One of the products that your company sells is toilet paper. You report in a meeting that consumer research revealed that customers complain about the packaging of the toilet paper. They say it is too big and not convenient to carry around. You believe a solution is needed and could create a competitive advantage. How would you proceed to find an innovative solution?

Questions?

[email protected] www.vigorinnovation.comwww.innduce.me @fanseel@vigorinnovation

mailto:[email protected]

http://www.fanseel.be/

http://www.vigorinnovation.com/

http://www.induce.me/

Promoting Innovation in Our Organisations

Professor Costas Markides

London Business School

Possible Answer #1

Consider this simple exercise:

• Add all the numbers from 1 to 100 and tell me the sum total (in one minute).

My first question to you:

• How many of you gave up?

My second question to you:

• Who came up with the answer?

Who got the answer?

• Gauss, the best mathematician that Germany ever produced got the answer in 60 seconds in 1787 (when he was only 10 years old)!

• How did he do it?

The difference:

• Most people say: “My God, this is impossible to solve in one minute”

The difference:

• Most people say: “My God, this is impossible to solve in one minute”

• Gauss said: “My God, this is impossible to solve in one minute like that.”

The difference:• Most people blame the task

we gave them. This leads them to give up.

• Gauss blamed the way he was trying to solve the task. (that is, his methodology). This led him to questioning.

Please Note:

• He did not innovate because we asked him to “be innovative” or to “think outside the box”!

• He innovated because he questioned his methodology

Unconventional Idea:• Innovation is NOT an end in

itself;

• It is the by-product of something else = the questioning of how to achieve a really stretch objective that people bought into)

Another way of Saying this:

• Give your people a really stretch goal; AND

• Sell it to them to win their emotional commitment to this goal

In General:• If you give your people a really

stretch goal; AND

• Sell it to them to win their emotional commitment to the goal; THEN

• They will begin questioning the way they are trying to achieve this goal.

• This questioning may lead to Innovation.

What determines success:

• Is not the sexiness of the stretch goal!

• It is whether you succeeded in “selling it” to your people.

Example:

• President Kennedy (or Steve Jobs) versus Costas Markides.

HOW TO WIN EMOTIONAL COMMITMENT

I KNOW

I UNDERSTAND

YES, I THINK I CAN

I WILL

This sounds difficult!

• Any other ways in which we can promote innovation in our organisations?

Possible Answer #2

Example:

• “Eat Healthy” Campaign in the USA…

The Results:

• Six months later, the campaign proved to be a total failure.

• Why?

Why?

• Because (believe it or not) the statement: “Eat healthy” is NOT clear enough!

• The options are limitless and this leads to decision paralysis.

Same principle for many things!• We need to “cut our costs”

• We need to become more customer-centric

• We need to change

• We need to become more innovative

First Principle to Know

• Principle #1: What often looks like resistance to change is actually lack of clarity

Therefore:

• Don’t tell your people: “We need to be innovative” or “we need to think outside the box”!

Instead:Focus on Behaviors:

• Certain behaviors are associated with innovation.

• Therefore, encourage everybody in your organisation to behave like this on a daily basis…

What Behaviors Promote Innovation?

• Jean Paul Gaillard at Nespresso in 1992-1993.

The moral of the story:

• Innovation requires that someone takes ownership of the idea;

• Innovation requires that you stick your neck out.

Other Behaviors:


• Selling shoe polish at Sara Lee


• Innovation requires that you get out of your office and observe the customer personally.

Other Behaviors:



• Arthur Fry’s discovery of the Post-It note at 3M


• Innovation requires that you bypass the constraints that the organisation puts around you in a creative way.

Other Behaviors:• Jean Paul Gaillard at Nespresso

in 1992-1993.



• The introduction of tabloid-sized newspaper by the Guardian


• Innovation requires that we question the things we take for granted.

• Such as: why pay all this money to shave?

The Dollar Shave Club

Other Behaviors:• Jean Paul Gaillard at Nespresso in 1992-

1993.



• The introduction of tabloid-sized newspaper by the Guardian

• Unilever’s fiasco with Omo Power


• Innovation requires experimentation

• Allow your people to try things without fear of failure.

And so on:

• Start out by identifying what behaviors you’d want from every single employee in your organisation.

Such As:• Question the things we take for granted; Question

everything.

• Try things out (without fear of failure)

• Be willing to stick your neck out. Take ownership of new ideas.

• Look outside your industry for ideas.

• Go to the customer and observe…

• Cooperate beyond your silos.

• Think strategically and be proactive

• Take the initiative

Unfortunately:

• Identifying the behaviors you want from everybody is important but not enough!

• People will not behave like this even when you make it very clear to them that you expect these behaviors from them.

Why Not?

• Why is it that people do not follow the behaviors that will get us innovation?

• There are two major reasons for it:

First:

1. An unsupportive Organizational Environment.

Let’s Try a Simple Exercise

You have a cake and a knife. You are allowed to cut the cake four times in straight lines. What is the maximum number of pieces that you could cut the cake into (in one minute)?

It is not 8 Pieces!

It is Not Eleven Pieces!

1

2

34

56

8

79

10

11

It is Not Twelve Pieces!

It is Not Sixteen Pieces!

Cut the cake into two pieces. Put one piece on top of the other and cut in two again. Put all pieces on top of each other and cut in two again. Put all pieces on top of each other and cut in two again.

24 = 16 times

More Importantly:

• Why do most people try to solve this exercise individually?

• What explains this behavior?

What Determines Behaviors?

Solving the exercise individually

Time-pressure

Mindsets, assumptions, beliefs

Psychological pressures

Structure

Incentives

A Key Management Principle:

• The Underlying Environment determines how people behave (much more than we’d like to believe).

What happens:• We keep telling people to “Question

Everything” but the moment anybody does it, we call them troublemakers…

• We keep telling people to “Try things out” but the moment they fail, we fire them

• We keep telling people to “Stick their neck out” but when they do it, we chop it off!

Downtown Calcutta

Versus

Downtown Fontainebleau

What Drives Behaviours in Organizations?

Sumantra Ghoshal

Second Principle to Know:

• Principle #2: What often looks like a people problem is actually a situation (environment) problem.

Specifically:• At most, our personality can only explain 30% of our behaviors.

• The remaining 70% is explained by the “social context” (or “situation” or “underlying environment”) in which we find ourselves.

The Underlying Environment

How we Behave in our company

Structures and

Processes

People, (skills, attitudes,

mindsets

Culture and Values

Measurement and

Incentives

The Implication of All This is:

• If you want to change how your people behave, you need to change the Environment around them.

• That is, create an environment that supports and promotes the behaviors you want from everybody.

How?

• How can we create an Environment that Promotes Innovative Behaviors from everybody?

Children See, Children Do:

In Other Words:

• YOU adopt the behaviors that you want all the others to adopt.

In addition:

• Small changes in the Environment can have a big impact on how people behave.

• This is known as “The Butterfly Principle”

The Butterfly Principle:

• It is the basis of the book NUDGE

• And already, countries like the UK and the US have “Nudge Departments” in their ministry of the Interior

For Example:

• How did the UK government increase its tax revenues by £1 billion last year?

What does the letter say?

• The deadline for submitting your taxes is January 30th. If you fail to submit on time you will be fined £500.

• The deadline for submitting your taxes is January 30th. Last year, 93% of people submitted their taxes on time.

In Other Words:

• Advertise the behaviors you want and encourage people to conform to these behaviors.

What You Need to Do

• Tweak the Environment so as to:• Make the “right” behaviors a little bit

easier

• Make the “wrong” behaviors a little bit harder

Summary So Far:

1. Identify the behaviors that you want everybody in the company to display every day.

2. Encourage these behaviors by creating a Supporting Environment for them

Unfortunately

• There is a second reason why our people do not follow the behaviors that will get us innovation.

Second Reason:

1. An unsupportive Organizational Environment.

2. All the behaviors we ask of them are the exact opposite of their “automatic” behaviors (that is their DNA)

Two Types of Behaviors:

• Thinking Behaviors

• Automatic Behaviors

Automatic Behaviors

• We automatically behave like this without thinking.

Why Automatic:

• Genetic (e.g. lion attacks)

Why Automatic:


• Values (e.g. offering your seat in a bus to an elderly lady)

Why Automatic:


• Values (e.g. offering your seat in a bus to an elderly lady)

• Experience—I have done it so many times, I can do it with my eyes shut (e.g. tennis).

And now a test for you:

• I will give you a list of behaviors.

• Your task is to tell me which are our automatic behaviors (“I have done this so many times, I can do them with my eyes shut”).

• Ready?

Which is the automatic behavior?

• Thinking outside the box versus conforming to what everybody does.

An academic study by Professor George Land on Divergent Thinking and Schools

• Who has the ability to think in a divergent way (a pre-requisite for creativity)?

• Anybody who scores 10/10 is called a genius in creativity

Divergent Thinking and Schools

• 3-5 year old kids:


• 3-5 year old kids: 98% score as genius



• 8-10 year olds: 32%



• 8-10 year olds: 32%

• 13-15 year olds: 10%



• 8-10 year olds: 32%

• 13-15 year olds: 10%

• 2,000 adults 25+ year old: 2%

As Einstein said:

• It’s a miracle that curiosity survives formal education.

Conformity in Action:


• Cooperate versus being competitive.

• (example: the arm-wrestling exercise)


• Take the initiative versus social loafing.

• (consider this video)

It Happened in New York:


• Experiment versus analysing and searching for the one best solution.

Say versus DoAutomatic Behaviors What we ask you

Conformity Stick your neck out

Competitive Cooperate

Search for best solution Experiment

Social Loaf Take the initiative

Conform Think outside the box

Message:

• Most of the behaviors that we ask our people to follow (for innovation) are the exact opposite of what their automatic behaviors.

What wins out?

• A few hours of our boss (or teacher) telling us what we “should” do?

• Versus 40-50 years of experience teaching us what is “good” for us?

The sad truth:

• We keep telling you: “these are the behaviors that we want from you”

• These behaviors all sound “common sense” and “easy”.

• But the sad truth is that you spent the last 40 years of your life at home, school and work learning the exact opposite behaviors!

Third Principle to Know

• Principle #3: What often looks like laziness to is actually emotional exhaustion.

What Does This Imply?

• Go Beyond Telling People: Analytical appeals are not enough!

• It’s tempting to prepare a powerpoint presentation, listing the things you want from your people—it will not work!

What We Need to Do:

• If telling people that these are the behaviors we want from them is not enough, how then can we get the “proper” behaviors out of our employees?

Answer:

• To get people to change their automatic behaviors, you will need to make the need for change emotional.

An Analogy

• Psychologists have an analogy for this: The Rider and the Elephant

The Rider and the Elephant (Haidt, 2006)• The Rider:

• Rational, Cool Cognitive

• Knows what we should do

• Holds the reins and seems to be in control

• The Elephant:

• Emotional, Hot

• Larger and more powerful

• Motivated by what we want (comfort, peace and quiet, ice cream)

How Can you Make the need for Change Emotional?

1. Things you see are more likely to evoke emotions than things you read

Make it Emotional

Make it Emotional: Free Hugs


1. Things you see are more likely to evoke emotions than things you read;

2. Stories (and how you tell them) are more likely to evoke emotion than a presentation.

Power of storiesIgnoring the evidence in favour of the story – a medical

example

Source: Freymuth and Ronan, Modeling Patient Decision-Making: The Role of Base-Rate and Anecdotal Information, Journal of Clinical Psychology in Medical Settings 149

Negative story Positive story

Treatment A 90% effective

Treatment B30% effective

‘Base rate information’


example



88%Treatment A 90% effective




example



39% 88%Treatment A 90% effective




example






7%


example






78%7%

The Power of StoriesProsecution

Facts

Facts

Story

Story

Def

ense

Source: N. Pennington and R. Hastie:“Explanation-Based Decision Making”, Journal of Experimental Psychology:Learning, Memory and Cognition, 1998

The Power of Stories

63%

59%

ProsecutionFacts

Facts

Story

Story

Def

ense



63% 78%

59%

ProsecutionFacts

Facts

Story

Story

Def

ense



63% 78%

31% 59%

ProsecutionFacts

Facts

Story

Story

Def

ense

RESULT: A near 50% swing in the number of people saying someone is guilty of first-degree murder based on whether a story was told or not.


1. Things you see are more likely to evoke emotions than things you read;

2. Stories (and how you tell them) are more likely to evoke emotion than a presentation.

3. How do you frame the need for change?

For Example:

Can you think of a word?

-- A N Y

For Example:


MA N Y

For Example:


MA N Y

--ENY

Possible Signs:• Can you please help a blind man?

• I am blind. Please help me feed my children

• Is it a sunny day? I am blind

• It is springtime and I am blind

• I am blind and it’s springtime

Anchoring• What comes first “anchors” the

mind to it.

• Everything that comes after it is evaluated relative to what you said or did before.

• Therefore: Put it in a context so that whatever you say afterwards shines.

Agenda Can you use “symbolic actions” to reinforce your message?Can you generate momentum (for the change you want) through early victories that you celebrate with your team?Can you “advertise” the “right” behaviors you expect from people?Can you make them feel “special” for doing what you want them to do?

Make it Emotional: What else?

Summary: The 3 strategies

• Provide Clarity

• Tweak the Environment

• Make the need for change emotional

Possible Answer #3

Who wants to be a millionaire:

169Source: Jeff Howe, Crowdsourcing: How the Power of the Crowd is Driving the Future of Business.

Phone a friend:

Ask the audience:

You don’t have to think of everything


Phone a friend: 65%

Ask the audience:

You don’t have to think of everything


Phone a friend: 65%

Ask the audience: 91%

Practice Open Innovation:

• You do not have to discover everything in life!

• Ask others for ideas and solutions to problems—the world is your oyster.

Putting the idea into practice:

• The strategy of “Connect and Develop” by P&G.

• P&G Mission (2001): “Fifty percent of all new discoveries in P&G must come from outside P&G”

Summary: 3 Ideas

• “Stretch” your people into active questioning.

• Encourage the behaviors associated with innovation;

• Practice Open Innovation

In Conclusion:

• Lots of Things to Think About so let me finish with one last thought.

The Knowledge - Doing Gap

Time

B

ProfitsA

Overall:

Everybody knows Only 1% do…

Therefore:

• Seize the moment!

• The future belongs to those who dare take chances!

HR Square - Costas Markides & Frederik Anseel

Recruiting & HR

Transcript of HR Square - Costas Markides & Frederik Anseel