(A longer version of this piece was originally posted to the Qmarkets blog)
You’ve heard this cliché many times before: innovation is all about people. Even if you’re an avid AI fan, you hardly expect robots replacing humans as innovators any time soon. And if you agree with another popular cliché, the one saying that innovation is a team sport, you will come to a natural conclusion that in order to pursue a corporate innovation project, you need to create a dedicated innovation team.
Or maybe not. Many people don’t believe in structured innovation arguing that any “structure” kills creativity and stifles innovation. Even some innovation experts argue that “innovation is everyone’s job.” The notion that “innovation is everyone’s job” happens to be quite popular in many companies too. Why? Because it allows its leadership adopt a hands-off approach to innovation process. It obviously takes time and effort to formulate the company’s innovation strategy, align it with corporate strategic goals and identify key problems to solve. In contrast, it’s so easy to just announce an open season for “ideas,” launch an innovation hackathon (or two) and then claim that the collective wisdom of the whole company has been harnessed.
And yet, the majority of corporate leaders do understand the value of creating a dedicated innovation team. Sure, every employee in your organization should ideally take part in innovation projects, but it’s the ultimate responsibility of the innovation team to take ownership of the process: to make it efficient, measurable and accountable. Anyone with a glimpse of corporate experience knows that when “everyone” is responsible for something, no one is.
And here we come to a crucial question: how this innovation team should be built? Several approaches to addressing this question exist.
The first approach emphasizes the personal skills of the team members. That’s why you will often hear that the best way to staff your innovation team is to hire…innovative people; great advice, but with limited practical value. Fortunately, more specific directions are available. For example, recently we were told that each member of the innovation team is supposed to possess five “innovative” qualities, of which the first is having a leapfrogging mindset: a desire to view the world with the goal of changing it. Although I agree in principle with this idea, I nevertheless suspect that the majority of corporate HR departments, even equipped with advanced Myers-Briggs tests, will have troubles with finding enough candidates meeting such a high standard.
The second approach pays little attention to the individual skill sets of the team members, but it stresses the need of an optimal mix of individuals the team is composed of. In particular, this approach focuses on the functional roles each member of the team plays in the project. For example, it was suggested that each innovation team should include nine innovation roles, such as Revolutionary, Connector, Magic Maker and Evangelist. This approach is obviously much more practical than the first; in fact, many organizations have already adopted the “spirit” (if not the exact “letter”) of this approach by creating innovation “joint task forces” composed of representatives from different corporate units and functions: R&D, sales and marketing, customer service, accounting, legal, HR, etc.
Implicit in the formation of an innovation team composed of members belonging to different parts of an organization is a belief that this team can only be successful if it includes people with diverse professional expertise and experience. In recent years, the concept of diversity was augmented by a growing body of scientific evidence (summarized in a 2014 article in Scientific American) showing that socially diverse groups (that is, those with a diversity of race, ethnicity, gender and sexual orientation) are more innovative than socially homogeneous groups. Multiple studies have found that socially diverse groups are better at solving complex problems not only because people with different backgrounds bring new information, but also because the mere presence of individuals with alternative viewpoints forces group members to work harder to get their own points across.
This is good news for HR managers in charge of innovation teams: in our rapidly globalizing workforce environment, finding people with diverse professional, personal and social attributes is much easier than chasing rare individuals with nebulous qualities such as the leapfrogging mindset.
There is the third approach to the formation of innovation teams. This approach emphasizes not the team composition or individual skills of its member, but the way the team operates. The logic behind this approach was eloquently articulated in a 2015 article describing team building at Google. The article argues that the composition of a team matters much less for its success than how the team members interact, structure their work and view their contributions. The article listed five key factors that set successful Google teams apart; the most important factor of the five was psychological safety, the ability of team members to take risks without feeling insecure or embarrassed.
The power of this particular example obviously emanates from the fact that it comes from Google, arguably one of the world’s most innovative companies, for the very notion that innovation requires taking risks without fear of negative career repercussions is hardly new. We all used to hearing calls to “fail fast and fail often” (or even to “celebrate failure”) as a surrogate invitation to innovate. Unfortunately, while voiceful in advocating risk-taking, relentless experimentation and learning from mistakes (all being parts of the elusive “culture of innovation”), companies nevertheless fail to introduce specific corporate policies that would encourage and reward such a behavior of their employees.
Previously, I suggested two such corporate policies. First, I proposed to make stock option grants – as opposed to cash bonuses and other monetary rewards – the principal incentive for engaging employees in innovation projects. This proposal is taking cue from a 2015 finding that companies offering stock options to non-executive employees were more innovative and that the positive effect of stock options on innovation was more pronounced with longer-term grants. Second, I proposed to place employees involved in innovation projects on fixed-term employment contracts, as opposed to employment-at-will. This proposal is based on a 2001 study showing that labor laws making it more difficult to fire employees increase their participation in corporate innovation activities.
In other words, companies should first provide all of their employees with incentives to engage in innovation activities along with immunity for failed innovation projects. With these policies in place, they may well discover that the number of qualified people willing to innovate is larger than they expected.