It’s a war out there as companies’ competitors appear overnight and the lifecycle of a product is becoming shorter all the time. So how do you stay ahead?

Well, innovation is increasingly being touted as essential for an organisation’s success. It is now a vital tool, according to Allan Ryan, CEO of the Hargraves Institute, an Australian innovation think-tank dedicated to helping organisations embrace new approaches to innovation and doing business.

“There are many research reports and government inquiries to show that the more organisations innovate, the more they are successful,” Ryan says.

Obvious examples are Apple and Google. The latter builds innovation into its job descriptions by allowing 20 per cent of employees’ time to be devoted to projects they are really passionate about. Another example is 3M, which has a ‘top down’ commitment to innovation and is still churning out breakthrough products in a wide range of industries after 110 years in business.

Innovation is essential

Queensland University of Technology Business School senior lecturer and a leading researcher in the field, Dr Judy Matthews, says the transformation is making innovation essential. “When we speak to organisations they are saying they have to be innovative to survive – let alone prosper — as it is such a dynamic environment,” she says.

The importance of embedding innovation right across an organisation is strongly endorsed by Derek O’Donnell, who is responsible for Coca-Cola Amatil’s (CCA) INNOV8 process innovation program. Since its launch in 2007, the program has implemented numerous innovations across the business ranging from improved coin-slider mechanisms on drink vending machines to an iPhone application for hospitality staff training built for CCA’s customers.

High performance organisations were more than twice as likely (44 per cent) as lower performers (20 per cent) to embrace innovation. All too often innovation is seen as the responsibility of product teams or business units, but increasingly it is becoming a whole-of-organisation activity and innovation experts believe HR is an essential player. This stems from the social nature of innovation, with ideas arising from interactions between humans.

Although some breakthrough innovations are ‘top down’ and start with a great idea, many more are ‘bottom up’ and come from the people within the organisation.

“With the idea-first method, an idea is developed that just wins as it is so fantastic, nothing could have stopped it. But these ideas don’t come along very often. However, there are lots of smaller ideas that come along every day and these can be just as important,” explains Ryan.

“Global research shows 90 per cent of innovation programs only last three to six months, as organisations have not addressed the culture and leadership support aspects.” Seeing value in innovation also encourages employees to engage with the organisation’s strategic goals.

“If people can make the link between what they are doing and what the customer wants, then it is more interesting and engaging for them,” Matthews says.

HR’s role in innovation

Given the close ties between internal culture and innovation, it is unsurprising HR is viewed as a significant player in this area — both at the strategic and practical level. “If HR wants to be at the ‘top table’ and have an input in the key organisational decisions, it needs to be involved in the strategic side of innovation,” Ryan explains.

This is also the case for the organisation’s leadership team. “HR has a role in building leadership behaviours, particularly in coaching leaders to give candid and constructive feedback on the ideas people have brought forward during the innovation process,” he notes.

In Matthews’s view, this means acting as a facilitator for innovation. “HR professionals have an important role in helping to be clear on what the organisation is about,” she says.

Recruitment is also a key area. HR needs to ensure the right systems are in place to attract, identify and capture the best talent at every level. The i4cp/3M report, Innovate or Perish: Building a Culture of Innovation, found most companies were missing opportunities to drive innovation, most notably during the hiring process. It found the top methods for recruiting and selecting creative people — such as personal referrals or searching for innovative people in graduate programs — were not being used.

This can be challenging for HR professionals and organisational policy, according to O’Donnell. “A rigid adherence to policy can be destructive and a barrier to innovation when poorly applied in context. In some companies the HR function focuses so much on policy that it misses the opportunity to drive innovation and support an innovation culture. It should be an enabler — not a policeman — and have a highly active function in driving innovation.”