How can the level of engagement in your organisation influence the degree of internal innovation you achieve?

Innovation is a major driver of the economy. It is not only a change that creates a new dimension, but one which has been successfully exploited. The drive to achieve innovation comes from many sources.

Firstly, there is innovation which stems from invention and subsequent planned investment in process and technology which changes the paradigm within which our product or service is delivered.

Secondly, there is innovation which stems from incremental changes and improvements made day to day by the management and employees. This kind of innovation develops more effective ways of working; faster ways of doing things, new technical approaches and more efficient processes. It is achieved by individuals and teams proactively applying their intellect and attention to continuous improvement.

Not everything they come up with will be innovative; some will merely be good practice. But, given the right climate, some of it will be truly innovative and the organisation can create the momentum of change to implement the ideas.

So what does that climate look like and how can it be achieved?

I recently observed employees in an equipment manufacturing company who produced innovative solutions to operational issues they identified for themselves. Their climate of innovation has a number of characteristics:

• Responsibility and accountability devolved deeply within the organisation
• Problem-solving and innovation is understood to be part of everyone’s job
• Time is ring fenced for problem-solving and innovation activities and, in their manufacturing environments, space is also provided for design and testing ideas
• People are skilled in group and individual problem-solving and brainstorming tools and relax readily into using them
• Financial and other benefits of improvement and innovation are estimated and tracked so ideas can be proven
• Contribution to innovation is publicly valued in award ceremonies and successful innovation is recognised
• Team reward structures are in place to encourage group effort

In this climate, employees can engage and thrive. Why do I say they can engage?

Well, according to repeated research into engagement, employees join your organisation when they see a fit between their personal values and those expressed and exhibited by your organisation, in addition to meeting your criteria. And they come to work looking for a number of factors to be satisfied, including:

• Do they have worthwhile and challenging work?
• Does their work help meet the stated strategic goals of the organisation?
• Are they inspired by the leadership they receive?
• Does their manager care about them and their performance?
• Can they trust the motives of work colleagues and the organisations’ management?
• Do they receive sufficient recognition for a job well done?
• Do they have good relationships with colleagues at work?

When these factors are working in harmony your employees will be in a frame of mind where they are willing to engage. Creating a climate of innovation represents a pull strategy in internal marketing terms, encouraging engagement as people experience the fun and excitement of working together to solve problems creatively and successfully.

Working in a climate of innovation gives everyone the opportunity to share thoughts with others, float ideas, be creative, get excited about new ways of working and know that the work they are doing is needed by the company, is valuable, and will improve their company’s results or image. Above all, it enables people to trust each other, and remove barriers to good communications, which enables an immediate increase in productive work.

According to an extensive global study of 664,000 employees conducted by Towers Perrin International Strategic Research, companies with high engagement scores are reporting around a 20% increase in operating income over 12 months, and a 13.7% increase in net income growth whist companies with low engagement are reporting negative effects on operating income of up to 32.7% and 3.8% decline in net income growth.

In my last newsletter, I outlined a case study of B&Q which has proven that their stores with high engagement scores are reporting 21% higher profitability, which seems to corroborate the research. Results like these suggest that where engagement is high, employees recognise and act upon opportunities to remove overall cost from the operation, thereby increasing operating income. This implies a willingness to communicate effectively within teams to find creative solutions and implement creative interventions as a matter of habit. In public sector environments, these concepts apply in a less conspicuous way.

In a multi-service forum such as a Primary Care Trust or a Crime Prevention Partnership, creating an environment of engagement and a climate of innovation can deliver smart, efficient, effective processes and solutions, reduce duplication of input costs for jointly delivering services, and create faster more focused services as a result.

So, a culture of innovation results from attention to all the drivers of engagement, both at a personal level to develop trust and involvement and an organisational level to build a climate of accountability, responsibility, problem-solving, innovation and change.