Soft is Hard to Change: The Challenge of aligning HR with Open Innovation

By: Innovation Management

The fourth theme addressed by MOOI is the relation between Open Innovation and Human Resource Management. This article delves deeper into the few articles that have arisen on HR and OI in the academic and professional literatures and the lessons that can be drawn from these existing sources. It also shares some of the take aways from the MOOI-forum discussions on this particular topic focus.

The success of Open Innovation hinges on many organizational aspects as we have discussed extensively on the MOOI forum in the past 5 months and will continue to do so in the next 7 months.

Some of these organizational aspects can be considered as “hard” or tangible characteristics such as strategic plans, organizational processes, and structures; others are viewed as “soft” or tacit organizational traits such as culture and employee attitudes.

The fourth theme addressed by MOOI is the relation between Open Innovation and Human Resource Management. As soft organizational aspects are often difficult to manage and change this theme has generated dense discussions on the MOOI forum. Before we address the major themes touched upon by the MOOI forum members we first examine the few articles that have arisen on HR and OI in the academic and professional literatures and the lessons we can draw from these existing sources.

HR and OI: The most important lessons from the literature

Several authors have pointed out that OI is essentially a people-driven business and that it is therefore crucial to learn how HR practices can drive Open Innovation success (Harwood, 2010; Mattes, 2011). Practitioners tend to agree with this notion as becomes clear from several interesting quotes below. At the same time academics and practitioners point out that these soft organizational aspects are quite difficult to change. It may in fact be easier to adapt organizational processes than it is to change the attitudes of employees towards collaborating with external partners. Nevertheless the literature offers some interesting practical guidelines in this respect.

According to a study undertaken at Hasselt University (Master thesis by S. Paul, 2013) HR practices related to both internal and external talent management are instrumental in changing the attitudes and behaviors of employees towards Open Innovation that in turn have a significant influence on its effectiveness. Furthermore, these important HR strategies shape the organizational culture and climate (the cultural theme is currently addressed on the MOOI forum; to learn more, please join!) that also affect the willingness of employees to engage in collaborative behavior.

Internal talent management

It is mentioned several times in the literature that HR departments need to cultivate the right skills in employees (through selection and training) in order to stimulate their positive attitudes towards collaboration (Du Chatenier, 2010). Some of these OI skills are related to entrepreneurship, internal and external networking, change management, learning, uncertainty tolerance, etc. These soft skills may be more important determinants of OI success than hard skills (see also Thoen, 2011; Sloane, 2012).

Performance evaluation systems should address these soft OI skills if employees are to develop the necessary behaviors for Open Innovation. It may, for instance, not only be important to evaluate OI professionals on how effectively they can manage an OI project through the stage-gate processes but also on their abilities to successfully manage their relations with important external knowledge sources such as universities/SMEs or their willingness to learn from failed OI projects.

Google and P&G, for example, swap employees in order to cultivate networking skills and other crucial OI competencies.

Another important HR practice related to internal talent management that may stimulate the development of OI skills in employees is referred to as “strategic talent exchange”. Google and P&G, for example, swap employees in order to cultivate networking skills and other crucial OI competencies and attitudes in their employees (Byron, 2008). Besides swapping employees with other companies HR departments may also encourage the exchange of personnel between internal organizational departments where it is particularly important for OI professionals to be familiarized, for example, with the R&D department (Petroni et al 2012).

A final important notion related to internal talent management that can be found in the existing literature is that the dynamism inherent to OI skills should not be taken for granted. Different OI skills (present in different employees) may need to be employed in different phases of the OI process (Mortara et al, 2009). It is thus crucial for HR departments to manage a pool of OI skills and to make these competencies accessible at the right time.

External talent management

Not much has been written on external talent management as only few organizations (most notably large consulting firms) have developed external talent management practices. These HR practices are mostly related to cultivating strong relations with external OI professionals so that they can be employed when particular OI skills or knowledge elements cannot be found internally (Kelley, 2012).

In conclusion: The important role of the HR department in OI success

In conclusion we can thus say that the literature points out that employees, their skill sets, and attitudes towards collaboration determine the effectiveness of OI strategies and practices. Even though these soft organizational aspects are quite hard to alter, the HR department can play a crucial role in bringing about the necessary change in attitudes. More specifically, by developing HR practices in terms of both internal and external talent management the HR department can contribute to an organizational culture where OI can thrive and all employees are rewarded for searching both internally and beyond their departmental/organizational boundaries for new knowledge.

HR and OI: Take-aways from the MOOI-forum discussions

As HR and OI is a challenging theme that is of interest to many managers, the topic has generated several interesting discussion threads on the forum. We will describe some general lessons from these discussions below.

OI skills

An important part of the discussion on the MOOI-forum has evolved around the question of whether it is actually possible to identify a specific set of skills that each OI professional should have in order for them to be successful at their OI activities. In relation to this question, forum members have pointed out that although it is possible to discern a number of skills that are generally helpful with respect to OI there has to be a match between the person and the environment in order for the combination to generate favorable results.

One skill that is generally associated with OI success on the forum is the extent to which individuals are able to adapt to changing circumstances, i.e. their flexibility or learning potential. Research seems to suggest that flexibility tends to increase with experience.

In general however forum members tend to agree that it is difficult to identify the “ideal skill set” in relation to OI professionals. It seems in fact that different skills are necessary in different phases of the Open Innovation process. Skills that are very beneficial in the early stages of innovation may be quite different from the capabilities needed in the commercialization phase. It may be unrealistic to think that all of these different skills can be found in a single individual.

Different individuals (and team compositions) may thus need to be deployed in different phases. This is one of the reasons why many large organizations have managers in charge of innovation projects who are very capable of managing start-up phases filled with ambiguity whereas managers with different skill sets take over once the project enters the commercialization stage where there is more certainty with regards to the path to follow.

Another very interesting discussion thread is related to the question of whether OI skills can be trained or only be obtained through selection. Although there seems to be general agreement that most skills can in fact be trained not all employees may be equally ready to be trained. It is therefore very important for HR departments to assess whether employees are willing to be trained before subjecting them to training sessions.

Forum members have furthermore pointed out that rotating employees across organizational departments or even across firms may be more effective at cultivating OI skills in them than traditional training programs.

The HR department

Another interesting discussion thread on the MOOI forum is related to the role of the HR department. Many forum members agree that the HR department has traditionally been a supportive/enabling function whereas for OI it is important that different organizational functions such as HR take on more pro-active, strategic roles and for HR to take a lead in both internal and external talent management.

In most large organizations (as part of the move towards “business partnering” for all functional departments) the role of the HR department has already evolved in the last decade towards a more strategically oriented HR function. As is the case in most important organizational change programs the positive attitude and commitment of the top management team/HR executives heading up HR departments towards Open Innovation are crucial in bringing about the essential change in the role of the HR function in a successful manner.

These are just a few thoughts that have been developed by forum members in an interactive way. There were other interesting threads of thought but it would drift us too far away from the current theme of the month. The discussions developed in the forum show that high quality discussions can be generated online between knowledgeable people that share the same passion.

By the MOOI-team
Prof. Wim Vanhaverbeke, Hasselt University, ESADE & National University of Singapore,
Prof. Henry Chesbrough, University of California, Berkeley & ESADE, and
Dr. Nadine Roijakkers, Hasselt University.

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References

 

1. Byron, E. (2008): A new odd couple: Google, P&G swap workers to spur innovation, The Wall Street Journal
2. Du Chatenier, E. (2010): Identification of competencies for professionals in OI teams, R&D Management, 30, 3.
3. Harwood, R. (2010): Motivation in Open Innovation, University of Cambridge audio interview
4. Blog entry (2011): Innovation-3, Mattes, F.: HR departments take the driver’s seat in Open Innovation
5. Interview Chris Thoen (2011): Chris Thoen on Open Innovation part II
   Sloane, P. (2012): A guide to Open Innovation and crowdsourcing
6. Petroni, G. et al (2012): Open Innovation and new issues in R&D organization and personnel management, International Journal of HRM, 23, 1.
7. Mortara, L. et al. (2009): How to implement open innovation: Lessons from studying large multinational companies, Centre for Technology Management, Institute for Manufacturing, Cambridge.
8. Kelley, B. (2012): Harnessing the global talent pool to accelerate innovation, Innocentive White Paper.