Best HR Practices for Today's Innovation Management. (the Human Side)

In the past decade, we have witnessed a dramatic shift in the focus of industrial R&D strategies. The 1980s and early '90s were characterized by an almost obsessive focus on quality programs and continuous improvement, the direct result of the successful Japanese quality and product proliferation movement. The Asian industrial juggernaut turned out incrementally improved products at reduced cycle times that gave pause to every industrial firm in the United States that viewed itself as an innovation leader. This trend gave way to the reengineering trend in the U.S., the product of the early 1990s economic downturn. Reengineering became synonymous with downsizing, and with it came a real decline in the nation's R&D effort. This transition phase evolved into the "irrational exuberance" of the late 1990s in which R&D expenditures grew at a double-digit pace, and the focus shifted to radical or breakthrough innovation. The effect of these trends has been a dramatic transition from bottom-line financial improvements to top-line growth, and with it the need to think more boldly about managing more significant innovative advances. The "dot-com" revolution rose and fell dramatically during the late '90s and with it came a rebirth of the technology "rainmaker" or, in the new vernacular, the "knowledge athletes. " These technical specialists became revered as the backbone and spirit of new technology enterprises whose goal was to replace older, less innovative companies or create entirely new businesses. The maturing of commercializable technologies in biotechnology, information technology and e-commerce has made heroes of these new technologists. Continuous improvement, followed by downsizing, then radical innovation and, finally, the dot-com boom--to--bust: an almost schizophrenic series of changes in the brief period of a decade! Consequently, at the operating level, research managers should be asking if their human resource policies and practices are robust enough to keep pace with these shifts in strategic emphasis. Or, are the old shibboleths regarding the motivation of knowledge workers (e.g., the importance of feedback) adequate for the challenge of the future? I propose that human resources (HR) practices firmly grounded in a few basic principles that have weathered a broad range of business environments continue to provide the foundation for good personnel practices. But clearly, a firm understanding of the demands of breakthrough innovation must be integrated into an organization's policies, since every organization will be faced with the challenge of utilizing a broader range of new technologies just to survive. Defining Innovation and its Cycle Simply getting agreement on a common definition of innovation demonstrates the challenge that underlies this work. Innovation activities are generally categorized as either radical or incremental. Frequently there has been debate over which type of innovating activity is the most important and effective. But more astute managers and leaders understand the necessity for both, and writers like Abernathy (1), Badawy (2), Tushman (3), and Kash (4) have identified the issues associated with managing these seemingly contradictory innovation approaches. The point is that organizations must have a split personality to simultaneously manage both approaches and do it well. In effect, timing the introduction of breakthrough innovations to stay ahead of competition while simultaneously utilizing incremental innovations to maximize profits is the challenge for contemporary business managers. What is not appreciated is that there are important organization and human resource needs that are also driven by the various stages of the innovation process. Even worse, most HR practices are developed with an operations mindset, not with the understanding or flexibility to take into consideration the differing needs of people and organizations depending upon where they operate in the domain of innovating activities. …