Innovation and Lab Mindset in HR

Innovation

Remaining innovative in any industry is a crucial contributing factor to success, growth and staying relevant and ahead of your competition.

Not only is it vital in an environment that’s constantly changing and transforming, but innovation is also everyone’s responsibility. Organisations should be encouraging all their employees to ideate, innovate and think creatively.

Ultimately, innovative organisations flourish and so do their people. Their employees are generally happier, more satisfied and more invested in the success of the business.

A great example of this is how Apple continuously releases new products and additions, in order to stay relevant. This enables them to retain existing customers and attract new ones, by meeting consumer needs and marketing their products effectively.

However, what we do not see is what goes on in the back end of the process. Even before the production and marketing processes commence, there will be a group of individuals brainstorming and sharing innovative ideas of what is required for these products to be introduced and succeed in the market. The same can be said for policies and procedures as well, it’s a lengthy and time-consuming process to reach the end goal. Usually, senior management will be involved in the update or creation of a new process or important business decision, and it will have to go through a series of approval stages before implementation.

In a study completed by Mercer in 2018, 94% of businesses said that innovation was on their strategic agenda.

Therefore it’s important for businesses to create an ‘innovation-focused’ environment that encourages employees to be constantly curious and have the autonomy to explore things they are passionate about. This not only leads to better business outcomes as innovative thinking leads to innovative solutions, but it also increases employee happiness and job satisfaction.

This innovation focussed or lab mindset environment involves HR encouraging and fostering an ‘experiment culture’ where employees can ask questions, investigate hypothesis’ and come up with solutions to difficult problems using data validation. In some ways replicating a type of science lab or experiment. These types of environments are widely recognised as Innovation Labs and are utilised by organisations worldwide.

Innovation Labs

Innovation Labs in HR are largely used to devise a plan for the current and future workforce. The process should start with encouraging employees to ask questions, investigating these questions and collecting data that should provide guidance to an overall solution.

These labs not only drive new product ideation and development, but also aid in the evolution of HR and move businesses toward a culture of true innovation.

This idea was best explained by Mercer when they highlighted how innovation labs / lab mindsets can be utilised in organisations by replicating the process of a science experiment. Ultimately managers can pose questions related to any HR topic, analyse the existing data to come up with a hypothesis and conduct experiments to determine the best outcome:

Cultivating Lab Mindset

Mercer: Cultivating Lab Mindset

Below are a few examples of how HR can create innovation-focused, lab mindset environments:

 

  • Reimagining performance management

Innovation needs to be inspired from the top. Employees can’t be afraid to fail, and they need to be shown that management is serious about changing the culture. So instead of only focusing on financial outcomes, HR could encourage managers to also evaluate their staff on their ideas and innovation. If employees know that they are not rewarded for innovation or if it’s seen as a waste of time, it’s unlikely to be a focus. HR therefore have the power to help change the way it’s perceived in the organisation and encourage it to be a key metric in which employees and managers are evaluated on.

 

  • Testing processes and strategies

Creating a lab mindset environment will enable businesses to make more data-driven decisions. Businesses will be able to analyse historical data to conduct mini-experiments and tests to determine which solution will produce the best business outcome. Specifically in HR, managers will be able to determine how talent strategies or certain procedures will work and determine which will be more successful. HR Managers will be able to map out how talent will flow in and out of the organisation, what rewards and benefits will be most effective and more.

For example, Roche, wanted to alleviate unnecessary hurdles when approving expenses. Therefore, they conducted a three-month trial where they tested two scenarios. Some employees were able to authorise expenses up to a limit, and others had to continue to seek approval through the normal procedure. Roche found that employees who were able to approve their own expenses were more motivated and efficient, and overall expenses went down.

Another example would be if a company has found that they hire more men than women and they want to increase the number of women in their workforce. They could conduct an experiment where they use blind recruitment and inclusive language in their job advert for one job, and they use their normal recruitment method for another similar job. They could then compare the quality of candidates and see which attracted more women.

 

If you’ve implemented an innovation hub or successfully created a lab mindset within your business, we’d love to hear from you.

 


References:

Cultivate a Lab Mindset: Building the Innovation-Ready Organization

Can HR Lead on Innovation? Yes, If We Cultivate A Lab Mindset


Author: Max Pheysey

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