What does HR innovation look like?

Innovation in HR is more important than most of us believe, experts say. The first step is knowing what it looks like and how to make it happen.

We are at a tipping point right now, HR experts say. The industry as we know it could become irrelevant and be replaced by staff and managers taking control and creating the culture and business they want and need. Or the industry could instead increasingly show its true colours by becoming integral to organisational strategy, to business goals and to staff needs. How do we achieve this? Success is all about innovation. “There is an urgent need for innovation in HR,” says Professor Julie Cogin, Director of the Australian Graduate School of Management (AGSM) and Deputy Dean of the UNSW Australia Business School. “HR is at a crisis point. Every single job is changing. Jobs and industries that exist today will not exist in 10 years. HR needs to work at a strategic level on the future of jobs and the future of businesses.” Rhonda Brighton-Hall, a Director of the Australian Human Resources Institute, agrees. “People are anxious about work and the piece they are most anxious about is HR,” she says. “That means something is wrong. People should be feeling good about work. It is our job to make sure they’re feeling confident.”

‘Innovation’ is often understood to mean doing something differently or better, a step change or an improvement in the way things have always been done. But that’s not innovation. Instead it is incremental improvement, Cogin says.

We have to reimagine the experience of working, she says, and what the HR function’s effect should be on that experience. Should HR be insisting on uncomfortable and often boring conversations between managers and staff every six months in the name of performance appraisal, for instance? Or should we instead be ensuring staff have a great reason to get out of bed and come to work happily and positively every day? Cogin describes innovation in HR as being about two things: creativity and implementation. “It is about doing something new, not doing something you already do but better,” she says. “There is quite a bit of a risk involved in innovation, but it is about prudent risk-taking.”

According to our experts, there are three main blockers of innovation in HR. The first is obvious – senior managers who do not value HR and who see it as a process function. “My suggestion to those in this situation would be to take on a project and work deeply on it to highlight the value-add of HR,” Cogin says. “Obviously when you are drowned in administrative work it is difficult to do that. But just take one thing that is important to the business, perhaps succession planning, talent mapping or corporate culture. Try to get in front of the executive team and build their confidence in the function that way.” The next blocker is a lack of capabilities of the HR professional, usually a lack of a whole-of-business perspective, and business acumen. This is solved through mentoring, coaching, spending time in and with other departments and seeking professional education. The third, Brighton-Hall says, is sheer exhaustion, resulting in a lack of courage. “The exhaustion comes from change management,” she says. “When you say, ‘We need to change something because it doesn't work,’ everybody just rolls their eyes and says, ‘Oh no, not more change management.’ But really innovative businesses are agile and are always changing. It needn’t be the huge drama we make it into.”

What does an environment of innovation look like? One of the finest examples, not just in HR but across several organisations and functions, came from the Christchurch rebuild. After the earthquakes in 2011, an organisation of sorts was formed to put the city back together. Many punters were originally cynical about the chances of the Stronger Christchurch Infrastructure Rebuild Team (SCIRT), a partnership between several government and private organisations, completing the job. According to one academic who has researched their performance, a single factor led to their overwhelming success – innovation. “SCIRT had an innovation KPI that ran across the company,” says Professor Suzanne Wilkinson from the Department of Civil and Environmental Engineering at the University of Auckland. “It was intended to encourage and capture innovations across the organisation. It got everybody thinking about innovation. That KPI was tagged to the amount of projects each particular group would be awarded, and to their funding. So they were essentially collaborating whilst competing. Innovation was one of the KPIs.” SCIRT even created a senior role, called ‘Value Manager’, responsible for measuring, promoting and rewarding innovation. Wilkinson’s research study, funded by BRANZ (an independent and impartial research company), is intended to improve innovation across the construction industry in New Zealand. This is exactly the attitude the HR industry needs, says Brighton-Hall.

Imagine if we use big data, Brighton-Hall suggests, to track the career paths of people who have worked under specific managers. Imagine the resulting evidence that would become available around which managers really are the most effective, and which managers require further development. This is just one of thousands of ideas that could make the HR industry more relevant to organisations of today. “The last time we had a really big change in work perspective was 1840 to 1860, during the shift from agricultural to industrial,” she says. “At that point, we introduced the eight-hour day, five days a week. We developed contracts that described the power the employer has over the employee. It is now 2016 and we are still using them.” Nobody works nine-to-five these days, Brighton-Hall says, despite what their employment contracts say. The old reality is in fast retreat and the new one needs support from HR. “The really good examples of things like flexibility happen when you give the capability to make specific decisions at a team level,” she says. “If we stop taking lessons from what is best practice of companies with 40,000 staff and instead ask what is best practice for businesses that do flexibility really well, then we would be closer to a good place.” “If we let people try things and they work, then other people will hear about it. People naturally share innovations. Right now we’re not doing that enough.”