While recent studies show that Australian businesses are falling behind in the global innovation race, this underdog status presents a unique opportunity for local firms, a prominent business executive suggests.
In the first of a two-part exclusive look into the IdeaSpies Employee Innovation Survey, Lynn Wood, a former board member of entities including retailer Noni B and HSBC Bank Australia, told My Business that “Australia is a really creative nation, but we’re falling down on innovation — we’re not letting the ideas through”.
Those problems, outlined in part one of our look into the research garnered from 2,000 Australian employees, include a breakdown in the flow of ideas between workers and their managers, with many seen to be either too busy or simply disinterested in considering suggestions.
It reflected a separate study by Ricoh Australia which also cited a global innovation index compiled by Harvard University, while a recent CBA report concurred that many employers are underutilising the skills of the people already on their payroll.
That in turn is breeding disenfranchisement in some workplaces, making employees more likely to leave — perhaps to a direct competitor or to launch their innovation in a company of their own.
However, Ms Wood believes that rather than doom and gloom, identifying these issues presents “a huge opportunity” for businesses to improve the capture of internal ideas and use these to drive future growth.
In this second and final part of this series, My Business explores what employees would like their bosses to know about innovation, and the ways in which employers can better embrace innovation to drive their business forward.
‘Help us help you’: Employees
With the problems contributing to poorer uptake of employee innovation identified, the IdeaSpies survey went on to try and find ways that employers can better connect with their staff and harvest their ideas on driving positive change within the business.
It found that many employees want to be able to contribute to the ongoing success of the business they work for, and to be empowered to offer suggestions on how their own ways of working could be improved for the mutual benefits of themselves and the business.
Asked how workplaces could better facilitate and track creative ideas and suggestions (again allowed to choose multiple answers), 45 per cent of respondents cited easy-to-use software tools and digital platforms as the way for pitching new ideas, marginally ahead of having a more supportive boss.
Almost a third said that a more supportive team would also facilitate the contribution and discussion of new ideas.
Incentives were also found to be a key motivator for encouraging staff members to contribute to the innovation discussion — particularly among Millennials, with 87 per cent of 19 to 35-year-olds admitting that recognition of their efforts would prompt them to bring their ideas to the table.
Yet to suggest that employees were only interested in profiting from their ideas would be overstepping the mark, with the survey also finding that simply being heard and afforded an opportunity to contribute more to the ongoing success of the business is enough to make 90 per cent of workers more inclined to stay with their current employer.
“Comments showed that employees want more power to implement ideas they suggest. They also want management to be more supportive in testing ideas,” the report said.
“Many were annoyed when time was spent developing an idea and either they weren’t empowered to test it, or they received no feedback on why it wouldn’t be accepted. Feedback was shown to be important in building employee engagement.”
Cultural differences help Australian firms stand out
One of the comments IdeaSpies received from a respondent pointed to the cultural differences between Australia and other parts of the world as one avenue local firms could use to their advantage:
“In Asia, the companies are mainly managed in a restricted and dictatorship way rather than as a place to encourage new ideas.”
This difference with local firms, suggested Ms Wood — who has previously worked in Hong Kong — potentially gives Australian employers a distinct advantage.
“Yes, that point was made — there is a big opportunity for Australia,” she said, suggesting that an “autocratic” business culture is likely to inhibit innovation from within.
“We’ve got lots of people [in Australia] who’ve got a lot of ideas, but we’re not letting the ideas get through.”
That opportunity for Australia to compete on the global stage, she suggested, is for businesses to better harness, and then action, these ideas for positive change.
What else do employees say?
Beyond the actual survey results, IdeaSpies also received a large volume of comments from respondents, personifying the facts and figures.
“We need to encourage staff in enterprises to bring all their ideas to work,” said one.
“It’s one thing to contribute ideas to an organisation, but it is even more important to know that you have been heard. Many times the act of being asked to contribute is hollow. Management gives the illusion of wanting contributions/ideas but then lack the skills to either give feedback or implement or recognise good ideas,” replied another.
Others noted that innovation requires buy-in from all levels of the business:
“Innovation is everyone’s business, at every level of the organisation. It must be able to be implemented and it must improve outcomes to be true innovation. Otherwise, it’s just an interesting (or not so interesting) idea.”
What that means for employers
Ms Wood said that her reasoning for conducting this study into employee innovation was to put metrics behind the issue, suggesting that people only really listen to an issue if there are metrics to back it up.
“I became involved in this area precisely because of my own experience. I think there is a change in management style going on, from autocratic to more democratic, and now there are many more opportunities for leaders to listen to their staff, and I guess a lot of them are catching up with that,” she told My Business.
Ms Wood cited comments by David Thodey, former Telstra CEO and now chair of the CSIRO, about the role employees can play in streamlining and adapting business products, services and processes to a changing marketplace:
“I have a strong view that the best source of innovation is your staff. They know the business and how to improve it better than consultants. The issue has always been how do you provide an open forum for those ideas,” Mr Thodey said.
According to Ms Wood, one of the challenges for busy employers and business leaders is to follow up ideas that have been offered.
She said that leaders will often ask their employees to provide feedback or speak up with opportunities for improvement, but, for whatever reason, [they] don’t then respond or outline to their workforce how that idea is being implemented or why; from an overall business perspective, it would not be practical.
This “communication problem” may then lead employees to be less forthcoming in the future.
“People who are putting up ideas want to have them properly considered, and a lot of the time leaders don’t want to open up — being very frank — because they feel that people don’t have good ideas,” Ms Wood said.
“Or they feel they don’t have enough time to analyse the ideas or look at the ideas, so then they only hear ideas from the people at the top, or worse, [paying for] consultants without asking the staff.
“It can be very discouraging to people.”
Ms Wood is also a keen advocate of digital technologies, which not only enable employees to provide ideas — anonymously if they so wish — but also for feedback to be provided in real time, and any actions arising from those ideas to be tracked by relevant parties or even the business as a whole.
Example in action: KPMG Enterprise
An example in practice, Ms Wood said, was an internal awards program trialled last year by KPMG Enterprise that incentivised employees to pitch their ideas.
But rather than offering money as an incentive, the reward was being able to take charge of the roll-out of their idea, furthering their own skill set and career growth with the support of the business and its leadership team.
“We give selected staff the opportunity to implement ideas they suggest and have benefitted from improving staff engagement,” NSW partner Tony Nimac said.
“In addition to specific ideas, we’ve seen themes coming from the ideas that have led to improvements.”
Suggestions put forward were judged not just by the senior leadership team, but by a panel of representatives from each level of seniority within the business to deliver a whole-of-business assessment.
The winner was offered “lunch or dinner with the partner” to further outline their suggestion, its benefits to the business and how to go about implementing it.
“Giving a person the opportunity to be part of a team can be very rewarding,” Ms Wood said.
“The partner in charge was so happy with the idea that he threw in some money.”
According to Ms Wood, the winning employee was so chuffed at the acknowledgement that she put more work into developing a framework for how it could be rolled out.
“The woman who had won actually then, on her own initiative, set out ‘this is how I see it could be implemented’ and asked staff to participate in the implementation,” she said.
“That’s exactly what you want to see happen in an organisation, where somebody comes up with a good idea, you [as the leader] think it’s good, you give them the leeway to go with it and they can even project-manage it.
“That’s an ideal situation. It’s not going to happen in all situations... but just giving people the opportunity to be involved in some way is very productive.”
Practical steps to drive employee innovation
According to Ms Wood, there are not one but two core reasons for embracing innovation: the first obviously being capturing new ways to improve the business in some way, but also to improve employee engagement.
“When you’re able to make a contribution at work, you work much harder,” she said.
“If you’re not just thinking nine to five, you’re actually thinking outside of work hours — it’s not work.”
The good news for employers, according to Ms Wood, is that there are things employers can do to better drive — and capture — opportunities to innovate from within, which are not costly to implement.
Forget the old suggestion box: This largely goes ignored by both leaders and workers, and is very one-sided in the flow of information. Digital options provide much greater transparency — particularly across businesses operating across multiple sites — and a flow of information in real time.
Don’t just talk the talk: Great leadership involves setting a good example for others to follow. But a notable problem is leaders claiming to run innovative businesses, while internally restricting the flow of creativity, innovation and testing; ignoring feedback; or failing to provide opportunities for people to come forward with new ideas and methodologies.
Acknowledge that not everyone is open to change: Ms Wood said that it is important for employers to note that people are, by our very nature, different from one another, and that some are much more willing to embrace change than others. So, it may be that a subset of employees provides the bulk of ideas and feedback.
Be proactive in seeking feedback: Businesses run a great risk of losing innovative, creative staff by sticking their head in the sand rather than embracing opportunities to cut costs, deliver new revenue streams and operate more efficiently. These employees are more likely to leave for somewhere they are more able to put their ideas into action, whether that be with a competitor or starting up their own business to compete directly with their former employer.
Give feedback: Some ideas won’t work, so be honest and explain why. But conversely, people can be put out if they share a great idea only to never hear of it again. So, that feedback should also include some insight into how and when a new concept or idea will be implemented.
Incentivise employees to share their ideas: Incentivisation need not necessarily be money either. Acknowledgement of great ideas can be itself a good incentive to share insights and ideas.
Provide a space free of judgement: “50 per cent of people that have posted ideas have posted them anonymously,” Ms Wood explained, suggesting that people don’t want to risk public judgement for sharing an idea. “Psychological safety is very important when you want to encourage ideas.”
Assess suggestions from all levels: Ms Wood said that more junior employees can also have the added fear of being judged by their rank within the business, rather than on the merit of their idea itself. As such, she suggested that when it comes to assessing the merits of new ideas, people from the various levels of the business come together to assess its merits and feasibility.
Keep it fun: Creativity and brainstorming shouldn’t be a chore. Make the process fun to generate greater buy-in.
“Leaders should be looking at this, because the last thing you want to be doing is losing staff, particularly those... who are the people who will come up with ways to grow your business,” Ms Wood concluded.
Adam Zuchetti is the editor of My Business, and has steered the publication’s editorial direction since early 2016.