HR's role in organisational creativity and innovation

Innovation and creativity are becoming ever more critical to many organisations’ success. HR has the power to create the conditions most conducive to both

Remember Pepsi A.M., the caffeinated cola breakfast drink? Remember the Cosmopolitan yoghurt, the women’s magazine’s foray into the dairy industry? Or Microsoft Bob, the tech software with the big, bespectacled, smiley-face namesake?

Probably not. Because each of these products failed to take off and were unceremoniously dropped within 18 months of launch.

But for each of these failed innovations there was also the Ford motor car, the iPhone, the World Wide Web… products and services that are now part of everyday life but were once equally out-there wacky ideas.

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Is your company suffering from innovation fatigue?

Innovation and creativity are championed as the key differentiators between a company that stands out and one that fails to stay abreast of trends and meets an untimely demise.

“We’ve still got the Nokias of the world that are ragingly successful and then two years later seem to have completely disappeared,” says Liz Mellon, editorial board chair at Duke Corporate Education and executive director of Authentic Leadership.

“So people are rightly worried [about innovation] as there’s not enough of it going on – if there was companies would be successfully reinventing themselves all the time.”

With an estimated 77 new start-ups launching every hour in the UK employees and organisations able to demonstrate these uniquely ‘human’ skills have got it made it seems.

The World Economic Forum recently named analytical thinking and innovation, and creativity, originality and initiative, as skills that will sharply increase in importance by 2022. A recent study from IBM also found that creativity is the single most important skill for leaders.

But what exactly do we mean by creativity and innovation? And what role can HR play in engineering all of its many activities around fostering this within the workforce?

While barely a day passes without these buzzwords cropping up in boardroom meetings, and while they’re staples of external company marketing and internal employer branding materials, there is no clear-cut definition.

“Ultimately they mean different things to different people and in different contexts,” says Sara Jones, senior lecturer in the faculty of management at Cass Business School and course director for the interdisciplinary Masters in innovation, creativity and leadership.

“Creativity especially has been of interest to human civilisation for millennia,” she adds, regarding why there are so many interpretations of this deceptively simple-seeming concept.

Chris Brauer, director of innovation in the Institute of Management Studies at Goldsmiths, University of London, gives his definition: “Creativity is the ideation and generating of new ideas, and innovation is the effect it has in an organisation or society. Until there’s a visible effect innovation doesn’t really exist. It just remains a brilliant idea. So creativity is the ideation and innovation is the execution.”

But others have a different take. For honorary senior visiting fellow at Cass Business School and partner at Perspectiv Andy Wilkins, innovation, creativity, problem-solving and change management are all different words for the same thing. Which means that “if HR looks after change it should also look after creativity and innovation”, he says.

Dispelling myths

So not quite as clear-cut definition-wise as you might think. But one thing many agree on is that it’s time to dispel the myth that innovation and creativity are only about coming up with the next revolutionary invention.

“The way we would talk about innovation at Google is that it doesn’t just mean self-driving cars – obviously that’s the extreme version, what we’d refer to as the moonshots, the big crazy world ideas,” says Kim Wylie, global director of people development at Farfetch and former global practice lead of change and culture at Google Cloud.

“Because actually you can also innovate in a less extreme way; so in product innovation that’s rethinking something that already exists and doing it in a new way.

“And then the next scale back from that is innovation around the processes employees do every day, which can be slightly more incremental but is still innovation.”

At Grant Thornton these distinctions are categorised as 10% ideas – “continuous improvement or small changes within a team or a process” – and 10x ideas – “a new product or way of doing things that can affect the wider business or be taken to clients”, explains head of people and client experience Malcolm Gomersall.

Yet many organisations are falling short when it comes to fostering creativity and innovation in their workforces. The challenge, explains Mellon, is what she refers to as “ambidexterity”.

“There’s a need to balance exploiting what the organisation is doing today and exploring what it should be doing in the future, and getting this balance right between business as usual and making time for creativity,” she says.

It’s this balancing act that HR must help the workforce strike – something Mellon says it has “three levers” in its toolkit to do so: recruitment, reward and training.

“There’s not one magic wand,” says Wylie. “But it starts with hiring. At Google the big focus is on, rather than finding people who would be good for that one job, finding people who would be good for the company –because things change so much.”

This involves separate interviews, each assessing one of four creative traits: role-related knowledge, cognitive ability (intelligence and problem-solving), leadership, and ‘Googliness’ (“the ability to thrive on ambiguity and mucking in and being passionate about the mission of using tech to solve the world’s problems”).

The ‘creative type’

Which brings us to that oft-cited but highly ambiguous phrase standing at the centre of the creative world: the so-called ‘creative type’. Much like the yeti, Loch Ness monster or aliens it’s a creature whose very existence is the subject of much debate.

‘Believers’ see merit in specifically recruiting these ‘creative types’. It’s something Wylie says is very much on the radar of Google, with bosses wanting to hire what they define as “smart creatives” – the “umbrella term” for people fitting the four criteria above.

It’s a belief Silicon Valley firms – the organisations often put on a pedestal for their innovative prowess – are renowned for.

Bruce Daisley, VP EMEA at Twitter, champions the idea of the ‘lone genius’ coming up with the next big thing: “When it comes to most creative ideas they were conceived by an individual and enhanced by others. Twitter is a great example; Jack Dorsey went in a room and came up with it.”

Yet the ‘non-believers’ have a different take. To Tara Swart, neuroscientist and author of The Source: Open your Mind, Change your Life, the notion of the creative type is nothing more than a “myth”. From a neuroscience perspective creativity is innate in every human brain, she asserts: “There’s a part of the brain called the association cortex, which connects the different parts up. That’s what fires up in creative thinking.”

“So when hiring for creativity HR needs to ask different questions and draw out of people how creativity manifests in them as we all have it. Don’t just look for the obvious things.”

It’s more important to hire diverse employees argues Aki Ben-Ezra, senior director of HR strategy and diversity at Adidas. “For new ideas to be created we need friction and friction can only happen between people who think differently,” she says.

For Jones the hiring conundrum lies somewhere in-between the believer and non-believer camps. “On the one hand everyone can be creative so it’s about developing and enabling that in someone. But on the other hand some people have mindsets that make them readier for it such as being more open-minded, comfortable with uncertainty and willing to collaborate,” she says.

It’s a sentiment shared by Brauer, who says creativity is “not a skill like tennis where you have to practise 10,000 times to be successful; it’s human nature”. “But people are often constrained as in organisations it seems better to be safe and risk-averse and not talk about your new ideas.

“If you want to foster innovation and creativity in individuals you need to develop training materials and enable them to, for example, develop a growth mindset, resilience and grit.”

The next step for HR beyond the recruitment stage is providing employees with the right tools and learning frameworks to hone and develop their creative abilities. It’s about teaching employees to work in a way they perhaps haven’t done before, feels Deborah Baker, group director for people at Sky.

“You can’t just point your finger at someone and say ‘be creative today’. But we can coach people to ask questions in a more open way and train managers to empower people to come up with different ways of solving something,” she says.

Baker cites the bespoke innovation training HR has piloted at Sky. “We’ve been piloting courses and running workshops on how to develop innovation and creativity in people. One of the first things is that people have to start with themselves – when you are faced with a problem do you go to the same people in your team or do you find out who’s best to turn to?”

Collaboration for innovation

So innovation isn’t just about the moonshots. Nor is it limited to the stereotypical image of the lone genius. Which all begs the question: if these attributes can be found, nurtured and even taught in everyone then who owns innovation and creativity in an organisation?

Dedicated innovation teams and the excitingly-named chief innovation officer naturally play a large part in the product innovation side of things at most firms. That said, many are coming round to the idea that innovation and creativity should be the responsibility of every employee in every function and role.

“In the back-office world it’s very easy to shut yourself away and be an invoice factory or a data factory and not feel connected to the company mission or spirit,” says Peter Evans, LCI director, business service operations at Lego. “If we’re talking product then of course that lives in product. But if we’re talking about continuous improvement to the organisation then that lives in all of us.”

Grant Thornton’s shared enterprise model is the result of an onus on making innovation the responsibility of all. Three years ago the firm took the step to find a way to encourage all employees to think of ideas to help the business grow and better reward staff for these ideas.

“The way I’d describe it is a three-legged stool and the three legs are shared ideas or innovations, shared responsibility and shared reward,” explains Gomersall. The idea is that anyone in the business can put forward an idea and if it’s a 10% idea it can be worked on in their team, and if it’s a 10x idea it is reviewed by the business with some selected to be scaled up.

“It doesn’t matter if someone is in sales or admin or they’re a senior manager, everyone can have an idea and everyone can benefit. The shared responsibility part means it’s not compulsory everyone has an idea, but everyone does have a responsibility to help implement ideas; whether that’s by being part of the team scaling it up or covering a team member who needs to go off and work on the idea,” says Gomersall.

All employees are rewarded out of the “shared enterprise pot”, incentivising everyone to play a part.

Incentivising innovation and creativity is just one part of the picture though. To truly get the best ideas from employees HR needs to create the right environment for these ideas to thrive. But what might such an environment look like? Amid all the beanbag and themed-room hype two factors cropped up in almost all conversations for this piece: time and space.

Time to think?

Take Google’s famous 20% time: where employees with a new idea can allocate 20% of their working time to develop that idea – something virtual-reality headset Google Cardboard can thank for its existence.

It might sound like a gimmick but Swart asserts there’s truth behind the concept. “Giving employees time to think works, as when you’re really task-focused the blood supply in the brain goes to that narrow task focus and away from creative thinking. So you do need to allocate time away from the normal job to come up with new ideas; you can’t do both at once,” she explains.

“The reality of modern work is that the average person gets 140 emails a day, they’re in 16 to 20 hours of meetings a week… creativity lives in the gaps between all these things. Innovation tends to happen when people are sitting scratching their heads, staring out the window and reflecting, not when every hour of your day is scheduled,” adds Daisley.

The answer at Twitter has been to run hack weeks where they “expressly set time aside, get everyone to stop what they’re doing and work on a project of their choice”. “Typically people with an idea will put up a poster saying ‘I’ve got this idea I want to work on’ and then they build a tribe of people to work on it with them over the two weeks,” Daisley explains.

It’s an interesting idea. But, against a backdrop of ongoing productivity woes, HR directors may understandably balk at the idea of advocating a people strategy where employees are paid to just sit and think one-fifth of the time.

Wylie concedes that ‘20% time’ doesn’t always translate from paper to reality. “A person would have to pitch the 20% idea to their boss, they’d say ‘off you go’, and you’d probably be working more like 120%,” she says.

“It would get to a 20%/80% split. But you first have to prove it’s worth investing time in. Otherwise anyone can just say ‘I’m going to do banana drones so can I have Fridays off’ – it doesn’t work like that.” (There goes the dream of pitching ‘Friday Think-day’ to HR magazine’s publisher…)

Power of play

Nonetheless, the concept of ‘play’ is becoming an increasingly popular way of maximising this ‘time out’ for thinking.

As a company with play at the very heart of its existence Lego is a good firm to look to for inspiration. It runs an annual play day where all employees are given the day to simply play with Lego.

“We take the same day all over the globe – whether you’re in a small sales office or a big factory – and you take part in a range of activities all based around the brick. You can make cars [like the life-size tonne-weight Bugatti a group made and then drove at 20mph], make them into hoops to jump through, or just sit in a massive pile of bricks as a group and build something,” Evans enthuses.

From what Evans has seen “this sparks the creative juices and makes people think”. “I think sitting with a bunch of people of all ages and playing together can spark a range of things, so then when we go back to our jobs we remember that yesterday we were experimenting building a Lego car and it helps us harness that energy into our own tasks,” he says.

Evans speaks of a “nirvana” that he wants the shared services division to get to; where “people come to work to do their work but where there is also time to improve and play around with stuff and learn”.

Fun factor aside, Goldsmith’s Brauer agrees that play as a form of experimentation can be crucial. “Should workers be given time to play during their day or should they have certain days a month where they can play?” he muses. “If you want workers to be more creative then it makes sense they should be playing instead of putting them on a traditional training programme with a guy with a clipboard at the front of the room.”

It’s a concept making its way out of Silicon Valley and through the doors of more traditional organisations. However, the danger is that firmswill buy into playrooms and ping-pong tables for all the wrong reasons.

“Often you see ping-pong tables sitting empty as they’re nothing more than a symbolic effort to say ‘look we’re playful’,” says Brauer. “There needs to be a reason they’re there and they need to be introduced as part of a cultural change programme led by HR.”

“I think people look at Google and think ‘we need to get a ping-pong table’. But they’re missing the point entirely,” adds Wylie. “The ping-pong tables don’t make creativity. The idea is that it creates a space where people can have spontaneous conversations.”

That’s not to say that revamping the physical office isn’t one piece of the creativity puzzle though. At the more traditional end of responses to this task stands those such as Inmarsat, which is installing flexible collaborative workspaces.

“It’s old-fashioned to think that sitting quietly in an office with the door closed will bring good ideas – it’s just not how things are done,” says Jo Franco-Wheeler, Inmarsat’s business transformation director. “If there’s a problem we now have the space to get the right people in a sort of war room to deal with it together.”

The key aspect is that the space encourages collaboration, agrees Ben-Ezra. She points to Adidas’ concept called “serendipity”, which creates spaces where people bump into each other by chance: “It’s about coincidental encounters and having office spaces designed to encourage these such as having kitchens in the centre of the building so people can bump into each other and share ideas”.

At the more radical end stands the introduction of the sleep pod at Google. Cynics might fret that this marks the ultimate attempt to stop workers ever leaving the office. But Swart explains that the hypnagogic (wakefulness to sleep) or hypnopompic (sleep to wakefulness) states are times when great ideas that “have been germinating” can pop into the brain.

So enabling employees to have short power naps during the working day can help creativity thrive.

Getting away from it all

Many also point to providing space outside of the office, including – most notably – external events companies are increasingly running in pursuit of the next big idea. Innovation days, hackathons, hack weeks, innovation labs, centres of excellence, innovation hubs, design farms… The list goes on.

But the underpinning logic is largely the same: that to inspire employees to think creatively they need to be physically taken out of their everyday environments.

For Ericsson the space of choice is innovation labs. “These are places where people can explore beyond the ordinary and where our talent has the opportunity to develop new solutions,” says Anshu Gupta, VP and head of HR global operations, adding that a mix of people from across the business might work in a lab at any given time.

Adidas is paying particular attention to what it calls ‘The Farm’; its design farm in Brooklyn that Ben-Ezra says HR set up out of a business need to better “farm design talent”.

Employees are immersed in The Farm’s creative space and the culture of Brooklyn (which she points out is a far cry from the HQ in a small German village) and then come back and “plant seeds in others as well”.

Another format is its cross-functional hackathons and development programmes where “people are drafted in from all different areas of the business so even finance and HR might be involved”. (Again flying in the face of the lone genius myth and championing cross-functional creative collaboration.)

Sending employees away from the business for months at a time to work on an innovative project can be hugely effective, agrees Dimo Dimov, professor of innovation and entrepreneurship at Bath University’s school of management. “If people continue to reside in the business it never works, as important things crop up and so it’s difficult to separate from their normal roles.”

The need to learn from the outside world is also paramount, feels Sky’s Baker. “When we senior leaders get together we don’t talk about business plans or financials. We talk about what’s happening in the world and we learn from different companies and people,” she says. “If we never look outside our own companies then we’re only going to be repeating the same old ways of doing things.”

But Mellon is less convinced. “Innovation hubs have a poor record,” she argues. “As you’re taking people out of the business to innovate in a hothouse atmosphere, so when you bring them back in the ideas fail as they feel foreign to the business.”

For the concept to work, Dimov concedes, employees sent to external hubs need to be “advocates of the new skills they bring with them” when they return to the business. And there “needs to be structures in the organisation that allow these skills to flourish”.

Freedom within frameworks

For many a balance between freedom to innovate and structure to make sure the innovations actually happen is the Holy Grail. Innovation and creativity happen because of – not in spite of – processes, believes Mellon. “People think there’s just a spark and ‘oh there’s Uber’ but that’s very rare. It’s much more often about a process and a rigorous discipline,” she says.

“It’s a fine line – too much structure and governance stifles innovation but not enough of it and you can’t define the stage gates that something needs to pass through to be received as a good idea,” feels Franco-Wheeler.

This balance is particularly tricky, but crucial, to strike in performance management. Too much focus on measures places “organisational constraint” on the ability to think and experiment, Brauer believes.

More worrying still, the issue is amplified as employees rise up the ranks. “As people move up an organisation business outcomes become even more crucial to their job performance,” he says.

“Leaders typically get measured on KPIs so it’s difficult for them to see beyond them.” If the team tries five things and they fail, “on paper those things just look like costs and when outcomes are measured in traditional ways they don’t look positive”, Brauer explains.

Doing away with measures altogether isn’t the solution though. Brauer instead recommends always having “two front pages” to look at business performance – the “normal front page” and one that “recognises innovation and what’s exciting right now”.

“It’s not enough to say it’s business as usual – we need to measure whether employees are making efforts to innovate,” he adds. It’s a balance Brauer calls “disciplined innovation” where we can’t just have this “blue-sky world where anyone thinks of anything and can do it”. If innovations are going to have significant investment they “need to be measured in some sort of traditional way,” he says.

It’s a challenge Adidas knows only too well. Performance management at Adidas centres around three key behaviours known on the inside as the 3Cs – creativity, collaboration and confidence.

“They are hardwired into how we develop people and rate their performance,” Ben-Ezra says. Which means that every employee across the organisation is targeted and measured on creativity and in the exact same way. “We rate people on openness to ideas, room to explore and keeping the consumer in mind,” she explains, adding that employees rate the performance of their line managers this way too.

An HR revamp

So there’s a delicate balance for HR to strike between rules and freedom. But the worry for many is that the profession will tend more towards stifling innovation if it’s not too careful, rather than not helping to create enough structure for it to succeed.

HR runs the risk of being seen as the “gatekeeper” preventing innovation and creativity from flourishing, warns Daisley. “The danger with HR is it can appear to be the referee and the rules,” he says. “The big thing is that people don’t know what they have permission to do.”

This is where HR may find itself needing to adapt, believes Franco-Wheeler. “The temptation can be to go by the book and say ‘this is what good looks like for HR in a perfect world’, but for me it’s recognising it’s not a perfect world and being pragmatic about what’s important to us as a business.”

The problem, says head of culture change at Lloyd’s Register Rebecca Berry, is that traditional organisations are difficult to change and most employees see things as “black and white, yes and no”.

“The more I look at how we can empower employees the more I find processes and rules that aren’t written anywhere and are just in people’s heads. And that’s why they don’t want to take risks. It’s a comfort blanket for people in an organisation that’s always been process-driven,” she says.

The case for more traditional firms loosening the reins and looking to the various techniques and initiatives described above for inspiration might seem pretty cut and dry. It’s no secret that Silicon Valley firms – more so in the early days – prided themselves on not having HR. The processes and policies can come after the creativity it seems.

There are certainly learnings that every HR director can take from these companies and apply to their own organisation – big or small, traditional or start-up – feels Twitter’s Daisley.

“I came from a traditional background to Google and Twitter and the critical difference I found was the pace that you can get things done in a matter of days not weeks,” he says, highlighting the contrast between this and previous experiences of jumping through hoops even to get an idea to a board meeting where permission to try it could be granted.

If there is one sentiment of Silicon Valley firms that all seem to agree on as valuable it’s failing fast.

“For so long people have been told they’re not allowed to fail and now there’s hipster start-up people saying they fail all the time and it’s a good thing,” says Jones.

Failure is important as if there’s a perception you can’t fail people won’t try anything new, but the important thing is to learn from every failure.”

But while to fail fast is “in the DNA of start-ups”, in large corporates or in the public sector where ideas cost the taxpayer money failing fast can prove more difficult to justify, points out Jones.

And perhaps structure and procedure alongside creativity isn’t always a bad thing. While Silicon Valley companies might have prided themselves in the early days on being ‘above’ the HR rulebook, a succession of recent headline-grabbing issues at such firms have no doubt forced many to rethink.

The Cambridge Analytica and Facebook debacle, the series of corporate governance and leadership scandals surfacing over recent years at Uber, and the walkout of Google staff in protest at the firm’s treatment of women all spring to mind. Alluding to these, Jones says that when innovation is the driver at all costs “the pendulum can swing too far and there’s a need for regulation to draw it back from excess”.

“Failing fast doesn’t mean making it work at any cost, there has to be understanding of the parameters,” says Franco-Wheeler. “You back the horse, give it some resources, but you have to be aware of what the criteria are.”

The right culture

The best way to get this balance just right, feel many, is to create the right kind of culture – one that will encourage employees to be creative where appropriate but not at the expense of ethics or getting the day job done.

While HR can tick off individual factors such as recruitment, environment, external events, performance management, L&D and so forth, culture is arguably where the function can have the biggest impact.

“HR has a huge role in making sure the company has the right culture,” asserts Baker. “It’s a very big umbrella but it’s where HR can really help the organisation have an open mindset.” Ben-Ezra agrees, articulating this as: “creativity drives the lifeblood of Adidas”.

Culture isn’t about “sticking posters up” but helping employees “make an emotional connection that turning up to work every day doesn’t have to just be about collecting a pay packet”, agrees Evans.

Berry adds that perhaps the most important facet of fostering creativity (and of course crucial if employees are expected to ‘fail fast’) is a culture of “psychological safety”. “A psychologically-safe space is needed where people feel they can be themselves and make suggestions without fear of consequences,” she says.

Indeed an internal study at Google found this to be the most important factor of a high-performing team, Wylie reports. “If you want to create a culture of innovation then you have to have psychological safety, as if you presume everyone thinks you’re totally bonkers and will shut you down ideas won’t be explored,” she says.

Swart says HR’s role in employee wellbeing also comes strongly into play here, with neuroscience teaching us that mental wellbeing and innovation go hand in hand. “When you’re under stress you have higher levels of the hormone cortisol in the blood, and when the brain senses this it reroutes blood supply away from the high-thinking centres and down to survival mode,” she explains. “So if you feel stressed you physically can’t be creative.”

So HR has a critical role to play if it wants firms to fall into the innovative and surviving bucket of companies rather than the static and dying.

As Baker asserts HR’s role in the creativity and innovation process stretches far further than many perhaps recognise: “Of course we in HR didn’t come up with our innovative product Sky Cube so it’s not fair to say we alone are taking the lead,” she says. “But what we’re saying is that HR has a responsibility to develop innovation in others and for coming up with new ways we can do that.”

And that, as bold as it might sound, might be the difference between inventing the next Ford motor car, the next iPhone or the next World Wide Web.