How do I get my HR function into the 21st century? Over 1.200 HR executives helped us answer this question by participating in our global survey. One of the key insights: make sure that your organization has an innovative and experimental culture. In this blog we explain how to realize such a culture, by giving you insights and solutions.
Innovation is all about experimenting and creating new ideas. But how do you get your organization to be innovative? Easy: by making sure everybody is on board. This starts with leadership. Leadership has the most critical role in sparking cultural change and encouraging that change to flourish over the long term. Based on experience and research over the past decade, we estimate 70 percent of the impact to culture comes from leadership decisions, guidance and modeled behaviors, while the remaining 30 percent is driven by elements such as training and engagement programs. By having leadership embrace innovation, employees can do so as well.
In our global survey we see that 24% of the HR leaders are less confident in their ability to transform the workforce. Well-prepared leaders recognize that innovation might feel daunting for employees. 'What is the impact on my job?' is the most frequently asked question when it comes to innovation. Innovation requires change and along with change comes uncertainty. To address these fears, leadership has a crucial role in explaining the broader purpose for the changes and clearly communicate expectations for employees moving forward. Have an open dialogue with your employees to make clear why innovation is needed and what is expected from them.
Do you recognize that great ideas often start in the shower? That's when we are totally relaxed and have the opportunity to rethink our work instead of being fully focused on optimizing our results. 35% of today's HR executives don't experience their culture as innovative. This is considered to be a top barrier to digital transformation. Innovation requires time and resources to make great products or develop new ideas. Many employees are busy with their 'normal work' and don't feel that they have a lot of time to be creative. That is why for example Google empowers their employees to be creative by providing them with 20% creative think time, which brought us Gmail and AdSense. When CEOs mention innovation, they often mean 'we have to speed up'. But ironically, innovation works best when accepting a temporary slow-down in normal business. Accepting this slow-down is crucial to think out-of-the-box and test new ways of working.
When leaders are involved and time is freed up for innovation, there is one more crucial sentence to remember: innovation can only happen when people feel that it is possible to fail.
Innovation is about having the right people in the right place and making sure that they are motivated to experiment and innovate. When leadership is focused on innovation more than on continuation, employees feel the freedom to experiment. The current way of working has gone through the cycle of execute, evaluate and adjust for years. New ideas will not outperform old ways of working at first attempt and it would be unrealistic to expect this to happen. A focus on innovation and experimenting means room for testing and failure. As the CHRO of India Zone for Schneider Electric mentioned in our global survey, her organization is shifting its culture: "We want to become an organization where fear of failure is mitigated by an ability for positive disruption". As KPMG, we agree and believe that innovation requires openness to new ideas. In order to determine whether the ideas can be effective, they must be tested again and again. Embrace failure, create KPIs around pushing for innovation instead of punishing potential brilliant mistakes.