Investing in employees continues to be the key to stimulating innovation in business
The landscape across all industries is changing at an unprecedented rate. For businesses to continue to succeed in this context they need to continually innovate, something they can achieve with the right employee support frameworks.
- Innovation is acknowledged to be a key contributor to profitability for businesses operating in the knowledge economy and thus an imperative
- Established research has helped to define the factors that are necessary pre-conditions for innovation to thrive
- A Saïd Business School study has taken this understanding a step further by considering the essential role the employee makes in the stimulation of innovation in the workplace
- The study identifies a chain of connected and reinforcing conditions that allow employee-sponsored innovation to thrive in professional service businesses
- In the flux of change to the nature of employment, embracing the lessons of employee-led innovation will be critical for survival in the future knowledge economy
Research has produced evidence-based criteria for the conditions required for innovation in an organisational context. Moreover, this innovation is increasingly seen as the lifeblood of businesses operating in the knowledge economy. After all, any product or service that stands still is likely to be consumed by commoditisation and shortly thereafter, automation.
However, in all the research that has helped to define the ingredients of innovation, the role of the employee has, until now, been largely overlooked. A study conducted by Tim Morris of Saïd Business School in Oxford, along with academic colleagues from other institutions, has now put the employee squarely at the heart of the innovation process in professional service companies.
Ability, Motivation, Opportunity
The role of employee as innovator cannot be wholly disconnected from the working environment, and Morris emphasises that the contribution of the employer to create the right context for innovation can be distilled to three key factors known as the AMO framework:
- A for ability – suitable training and enrichment of knowledge and skills
- M for motivation – incentives and reward for tangible progress
- O for opportunity – the scope for staff to be able to exercise their capabilities
A sound AMO framework is only part of a chain that connects the company to the employee. The staff contribution to innovation is contingent on positive behaviours – some inherent, some learnt. The inherent behaviours are filtered through the recruitment process and in the professional services context, this is often achieved by hiring graduates from top universities, thereby securing talent that is assumed to be predisposed to perform well. The learnt behaviours are formally instilled through training, or informally absorbed from workplace peers, which leads to reinforcement of a positive disposition toward innovation.
Train your way
The final linked dependency is the application of enlightened management practice focused on talent performance – specifically skills, commitment and productivity achieved through focused training, mentoring and performance management.
The research shows that the delicate inter-dependency of AMO together with a carefully nurtured culture of staff-led creation, introduction and application of new ideas structured within a conducive framework of performance management will deliver tangible outcomes. In the 120 organisations studied, those that energetically pursued each of the influencing factors reported higher levels of innovation that ultimately manifested as increased levels of new service innovations and higher levels of client wins.
While innovation will be compromised if any of these elements are missing, the summary conclusion is that the employee is the lynchpin of organisational innovation.
This article is based on findings from:
Fu, N., Flood, P., Bosak, J., Morris, T. and O'Regan, P. (2015), "How do high performance work systems influence organizational innovation in professional service firms?", Employee Relations, Vol. 37 No. 2, pp. 209-231. https://doi.org/10.1108/ER-10-2013-0155