HR Square - Costas Markides & Frederik Anseel

What if we decided to take employee-
driven innovation seriously?
HR Square masterclass 13-05-2014
Frederik Anseel
Ghent University
Contact
frederik.anseel@ugent.be
Twitter: @fanseel
Web: fanseel.be

“Discussing the importance of
innovation would be a waste of
your time”
Frederik Anseel HR & Innovation – 13-05-2014

“The most valuable resource for innovation
remains largely untapped – the people-side of
innovation”
“40 years of psychological research provides us
with a good scientific understanding of the
psychology of innovation and how to encourage it”

Objectives of my talk today
• Share scientific insights on 4 key resources that drive employee-driven
innovativion
• Formulate principles that can shape an innovative work environment and
daily work experiences of employees
• Translate these principles in actionable practices and HR-tools for
stimulating innovation

Employee innovation is determined by 4 resources
MOTIVATIO
N
ENVIRONMENT
MOOD
EMPLOYEE
INNOVATIO
N
KNOWLEDGE

(1) The motivational resource
• Being passionate about work fuels innovation
Passionate? Feeling competent and in control
Intrinsic motivation =ρ .24, variation 25%
Creative self-efficacy =ρ .33
• External incentives can foster or hinder one’s innovation
It depends!
Extrinsic motivation =ρ .14, variation 151%

It is not only about whether people like their job, it is also
about whether they like to help others.
I enjoy the work
itself!
I want to help others
through my work!
Generates novel, but
operable work-related
ideas

“My co-workers will think
worse of me if I often try
out
new approaches on my
job”
“If I were to do something
innovative, my image in
the
organization would be
enhanced”
“Coming up with creative
ideas helps me do well on
my job”
“Investigates and secures
funds needed to
implement
new ideas”
Caring about your image does not help innovation
trying new ideas to do a better job does!

“I consider diverse sources
of information in
generating
new ideas”
“My manager will publicly
recognize those who are
Creative”
“I can decide on my own
how to go about doing my
Work”
Empowered employees engage more often in
creative processes when this is encouraged
and valued by their supervisor.

I am not interested in making
sure that you are here, that
you are giving us so many
hours a day. We need people
who will deliver a final
result.”
“If we do not let people do
things the way they do, we
will never know what they
are really capable of and
they will just follow our
boarding school rules.”

Principle 1
“Focus on intrinsic motivation, by fostering feelings of
control and competence, and channel this motivation
towards innovation by setting the right cues”

(2) Environmental resources
• Perceptions of one’s job
e.g. autonomy = .ρ 32
• Perceptions of one’s co-workers
e.g. co-worker support =ρ .36
• Perceptions of one’s leader
e.g. leader-member relationship =ρ .29
• Perceptions of one’s organization
e.g. Supportive resources =ρ .27

“In my organization, creative
work receives appropriate
recognition
and praise”
“opportunities for personal growth
and development are important to
me”
Also for people in routine jobs, recognition of creative work leads to more
creative performance

“Desire to elicit high
performance from
me.”
“Expresses anger at me when
he/she is mad for another reason”
“Desire to make me
feel bad about
myself.”
Abusive leadership hinders creativity, but
less when individuals believe their leader
just wants them to perform better.

Principle 2
“Structure employees’ work environment in such a way
that employees believe to be free and psychologically
safe in their job, and supported by their co-workers,
leaders and organization to innovate”

(3) Emotions as resources
• Both positive and negative moods can facilitate innovation
• Whether the mood is activating makes the difference
=
Dual-pathway of innovation

Do not solely focus on
fostering positive moods.
Creativity stems from a
subtle interplay between
positive and negative
feelings.

Do not solely focus on fostering positive moods. Creativity
stems from a subtle interplay between positive and negative
feelings coupled to supervisor support

Principle 3
“Positive activating vibes energize employees to innovate,
but do not avoid a sense of crisis or urgency”

(4) Knowledge as resource
• Knowledge and information are key
component of creativity
• Emphasis on knowledge gathering,
development & sharing
e.g. openess =ρ .19 – Intrinsic motivation
to learn =ρ .21

“The manager
encourages members to
share ideas with each
other”
“Interact with my colleagues
in this organization to
discuss
suggestions and ideas”
“Available for sharing
experiences with people
outside this organization”
Internal and external knowledge sharing can spur creativity
and innovation. However, leaders have an important role in
encouraging and facilitating these processes.

“I feel that using the Web
2.0 application is fun”
“When using the Web 2.0
application, I am absorbed
intensely in the activity”
Knowledge seeking and sharing through Web 2.0 tools
contributes to employee creativity as employees experience
more flow from these new tools than classic knowledge
management tools

“How frequently do you
directly ask your supervisor
for feedback about your
work?”
By asking feedback directly on
problems and ideas employees use a
valuable source for creative solutions
“How frequently do you pay
attention to how your boss acts
toward you in order to understand
how he/she perceives and
evaluates your work?

In competitive climates hiding your knowledge for others
ultimately backfires on your own creativity

Principle 4
“No matter how much you motivate, energize and support
your employees, knowledge and information are the
currency of innovation. Organize for easy acces to
information and fluent sharing of knowledge”

“HR* can apply these 4 principals through its control over: ”
WORK DESIGN
LEARNING &
DEVELOPMENT
PERFORMANCE
MANAGEMENT
COMPENSATION &
BENEFITS
INNOVATIVE
MINDSET
INNOVATIVE
PERFORMANCE
MOTIVATION
ENVIRONMENT
MOOD
KNOWLEDGE
*Today is about how to manage not about who to hire

HOW CAN HR INCREASE RESOURCES FOR EMPLOYEE
INNOVATION THROUGH WORK DESIGN?

FOCUS ON THE MOTIVATION AND KNOWLEDGE PRINCIPLE
Customize challenging jobs that target employees passion:
-Negotiate I-deals
-Create an internal project market for which employees can volunteer
-Allow employees freetime to work on innovative projects and set goals
-Spur a prosocial climate by creating interdependency and impact
-Team interdependency leads to knowledge-sharing
HOW CAN HR INCREASE RESOURCES FOR EMPLOYEE
INNOVATION THROUGH WORK DESIGN?

HOW CAN HR INCREASE THE FOUR RESOURCES
THROUGH TRAINING & DEVELOPMENT?

THROUGH TRAINING & DEVELOPMENT?
FOCUS ON THE KNOWLEDGE PRINCIPLE
•Integrate challenges in people’s jobs in a strategic way in order to increase
on-the-job learning
•Systematically integrate after-event reviews in work as to employees can
learn from their successes and failures
•Integrate new professional social media in employees’ daily handling with
each other www.yammer.com www.work.com www.cognistreamer.com
•Train supervisors in encouraging and facilitating internal & external
knowledge sharing and feedback-seeking in their team

THROUGH PERFORMANCE MANAGEMENT?

THROUGH PERFORMANCE MANAGEMENT?
FOCUS ON THE CONTEXT AND THE MOOD PRINCIPLE
Facilitate progress instead of evaluating performance
•Replace annual performance reviews by performance check-ins (Adobe)
•Stimulate supervisors to reflect daily (checklist) on how they helped their
team to make progress www.progressprinciple.com
•Set creativity goals and focus both on the outcome and the process.
•Psychological safety and support
•Learn to capitalize on mood swings

HOW CAN HR APPLY THE PRINCIPLES THROUGH
COMPENSATION & BENEFITS?
FOCUS ON THE MOTIVATION PRINCIPLE:
I. HOW SHOULD WE REWARD TOP MANAGEMENT TO FOSTER
INNOVATION?
II. HOW SHOULD WE REWARD EMPLOYEES TO FOSTER INNOVATION?
Individually or team-wise?

HOW SHOULD WE REWARD TOP MANAGEMENT TO
FOSTER INNOVATION?
• Pay related to short-term goals: cost-cutting and less investments in R&D
• Long-term benefits do not overcome this tendency
• High-tech companies reward top management’s behavior and decisions,
e.g. R&D expenses, new patents or product launches, milestones in
innovative projects, innovation-audit

HOW SHOULD WE REWARD EMPLOYEES TO FOSTER
INNOVATION? Individually or team-wise?
Team rewarding:
•Creates outcome interdependency
•Stimulates information sharing
•Facilitates cohesion
•Enhances learning
•Diminishes subgroup salience
Caution:
•Social loafing – alternative hybrid rewarding

So, what have we
learned here?

Benefit from the psychological science of innovation
– Analyse your organization for motivation, work
environment, mood and knowledge
– Seek how to adress those in HR-practices
1. Job design
2. Learning and development
3. Performance management
4. Compensation and benefits

And what about recruitment and
selection?
Stay tuned….

Your management really values taking
into account the customer’s opinion on
the company's products and services,
and spends a large amount of money
every year on consumer research. One
of the products that your company sells is
toilet paper. You report in a meeting that
consumer research revealed that
customers complain about the packaging
of the toilet paper. They say it is too big
and not convenient to carry around. You
believe a solution is needed and could
create a competitive advantage. How
would you proceed to find an innovative
solution?

Questions?
Frederik.anseel@ugent.be
www.fanseel.be
www.vigorinnovation.com
www.innduce.me
@fanseel
@vigorinnovation

Promoting Innovation in Our
Organisations
Professor Costas Markides
London Business School

Consider this simple exercise:
• Add all the numbers from
1 to 100 and tell me the
sum total (in one minute).

My first question to you:
• How many of you gave up?

My second question to you:
• Who came up with the answer?

Who got the answer?
• Gauss, the best mathematician
that Germany ever produced
got the answer in 60 seconds in
1787 (when he was only 10
years old)!
• How did he do it?

The difference:
• Most people say: “My God,
this is impossible to solve in
one minute”

The difference:
• Most people say: “My God,
this is impossible to solve in
one minute”
• Gauss said: “My God, this is
impossible to solve in one
minute like that.”

The difference:
• Most people blame the task
we gave them. This leads
them to give up.
• Gauss blamed the way he
was trying to solve the task.
(that is, his methodology).
This led him to questioning.

Please Note:
• He did not innovate because
we asked him to “be
innovative” or to “think
outside the box”!
• He innovated because he
questioned his methodology

Unconventional Idea:
• Innovation is NOT an end in
itself;
• It is the by-product of something
else = the questioning of how to
achieve a really stretch
objective that people bought
into)

Another way of Saying this:
• Give your people a really
stretch goal; AND
• Sell it to them to win their
emotional commitment to this
goal

In General:
• If you give your people a really
stretch goal; AND
• Sell it to them to win their emotional
commitment to the goal; THEN
• They will begin questioning the way
they are trying to achieve this goal.
• This questioning may lead to
Innovation.

What determines success:
• Is not the sexiness of the
stretch goal!
• It is whether you succeeded
in “selling it” to your people.

Example:
• President Kennedy (or Steve
Jobs) versus Costas
Markides.

HOW TO WIN EMOTIONAL COMMITMENT
I KNOW
I UNDERSTAND
YES, I THINK I CAN
I WILL

This sounds difficult!
• Any other ways in which we
can promote innovation in
our organisations?

Example:
• “Eat Healthy” Campaign in
the USA…

The Results:
• Six months later, the
campaign proved to be a
total failure.
• Why?

Why?
• Because (believe it or not) the
statement: “Eat healthy” is NOT
clear enough!
• The options are limitless and
this leads to decision paralysis.

Same principle for many things!
• We need to “cut our costs”
• We need to become more
customer-centric
• We need to change
• We need to become more
innovative

First Principle to Know
• Principle #1: What often looks
like resistance to change is
actually lack of clarity

Therefore:
• Don’t tell your people: “We
need to be innovative” or
“we need to think outside
the box”!

Instead:Focus on Behaviors:
• Certain behaviors are
associated with innovation.
• Therefore, encourage
everybody in your
organisation to behave like
this on a daily basis…

What Behaviors Promote Innovation?
• Jean Paul Gaillard at Nespresso
in 1992-1993.

The moral of the story:
• Innovation requires that someone
takes ownership of the idea;
• Innovation requires that you stick
your neck out.

Other Behaviors:
in 1992-1993.
• Selling shoe polish at Sara Lee

• Innovation requires that you get
out of your office and observe
the customer personally.

Other Behaviors:
in 1992-1993.
• Arthur Fry’s discovery of the
Post-It note at 3M

• Innovation requires that you
bypass the constraints that the
organisation puts around you in
a creative way.

Other Behaviors:
in 1992-1993.
• Arthur Fry’s discovery of the
Post-It note at 3M
• The introduction of tabloid-sized
newspaper by the Guardian

• Innovation requires that we
question the things we take for
granted.
• Such as: why pay all this money
to shave?

Other Behaviors:
• Jean Paul Gaillard at Nespresso in 1992-
1993.
• Arthur Fry’s discovery of the Post-It note at
3M
• The introduction of tabloid-sized
newspaper by the Guardian
• Unilever’s fiasco with Omo Power

• Innovation requires experimentation
• Allow your people to try things
without fear of failure.

And so on:
• Start out by identifying what
behaviors you’d want from every
single employee in your
organisation.

Such As:
• Question the things we take for granted; Question
everything.
• Try things out (without fear of failure)
• Be willing to stick your neck out. Take ownership
of new ideas.
• Look outside your industry for ideas.
• Go to the customer and observe…
• Cooperate beyond your silos.
• Think strategically and be proactive
• Take the initiative

Unfortunately:
• Identifying the behaviors you
want from everybody is important
but not enough!
• People will not behave like this
even when you make it very clear
to them that you expect these
behaviors from them.

Why Not?
• Why is it that people do not
follow the behaviors that will get
us innovation?
• There are two major reasons for
it:

First:
1. An unsupportive Organizational
Environment.

Let’s Try a Simple Exercise
You have a cake and a knife. You are
allowed to cut the cake four times in straight
lines. What is the maximum number of
pieces that you could cut the cake into (in
one minute)?

It is Not Eleven Pieces!
1
2
3
4
5
6
8
7
9
10
11

It is Not Sixteen Pieces!
Cut the cake into two pieces.
Put one piece on top of the other and cut in two
again. Put all pieces on top of each other and cut in
two again. Put all pieces on top of each other and
cut in two again.
24
= 16 times

More Importantly:
• Why do most people try
to solve this exercise
individually?
• What explains this
behavior?

What Determines Behaviors?
Solving the exercise individually
Time-pressure
Mindsets, assumptions,
beliefs
Psychological
pressures
Structure
Incentives

A Key Management Principle:
• The Underlying Environment
determines how people behave
(much more than we’d like to
believe).

What happens:
• We keep telling people to “Question
Everything” but the moment anybody
does it, we call them troublemakers…
• We keep telling people to “Try things
out” but the moment they fail, we fire
them
• We keep telling people to “Stick their
neck out” but when they do it, we
chop it off!

Downtown Calcutta
Versus
Downtown Fontainebleau
What Drives Behaviours in
Organizations?
Sumantra Ghoshal

Second Principle to Know:
like a people problem is actually
a situation (environment)
problem.

Specifically:
• At most, our personality can only
explain 30% of our behaviors.
• The remaining 70% is
explained by the “social
context” (or “situation” or
“underlying environment”) in
which we find ourselves.

The Underlying Environment
How we
Behave in
our
company
How we
Behave in
our
company
Structures
and
Processes
People,
(skills, attitudes,
mindsets
Culture and
Values
Measurement
and
Incentives

The Implication of All This is:
• If you want to change how your
people behave, you need to change
the Environment around them.
• That is, create an environment that
supports and promotes the
behaviors you want from everybody.

How?
• How can we create an
Environment that
Promotes Innovative
Behaviors from
everybody?

In Other Words:
• YOU adopt the behaviors
that you want all the others
to adopt.

In addition:
• Small changes in the Environment
can have a big impact on how
people behave.
• This is known as “The Butterfly
Principle”

The Butterfly Principle:
• It is the basis of the book NUDGE
• And already, countries like the UK
and the US have “Nudge
Departments” in their ministry of
the Interior

For Example:
• How did the UK government
increase its tax revenues by
£1 billion last year?

What does the letter say?
• The deadline for submitting your
taxes is January 30th
. If you fail to
submit on time you will be fined £500.
• The deadline for submitting your
taxes is January 30th
. Last year, 93%
of people submitted their taxes on
time.

In Other Words:
• Advertise the behaviors you
want and encourage people
to conform to these
behaviors.

What You Need to Do
• Tweak the Environment so as
to:
• Make the “right” behaviors a little bit
easier
• Make the “wrong” behaviors a little
bit harder

Summary So Far:
1. Identify the behaviors that
you want everybody in the
company to display every
day.
2. Encourage these behaviors
by creating a Supporting
Environment for them

Unfortunately
• There is a second reason why
our people do not follow the
behaviors that will get us
innovation.

Second Reason:
1. An unsupportive Organizational
Environment.
2. All the behaviors we ask of them
are the exact opposite of their
“automatic” behaviors (that is
their DNA)

Two Types of Behaviors:
• Thinking Behaviors
• Automatic Behaviors

Automatic Behaviors
• We automatically behave like
this without thinking.

Why Automatic:
• Genetic (e.g. lion attacks)

Why Automatic:
• Values (e.g. offering your seat in a bus
to an elderly lady)

Why Automatic:
• Values (e.g. offering your seat in a bus
to an elderly lady)
• Experience—I have done it so many
times, I can do it with my eyes shut
(e.g. tennis).

And now a test for you:
• I will give you a list of behaviors.
• Your task is to tell me which are our
automatic behaviors (“I have done
this so many times, I can do them
with my eyes shut”).
• Ready?

Which is the automatic behavior?
• Thinking outside the box versus
conforming to what everybody does.

An academic study by Professor George
Land on Divergent Thinking and Schools
• Who has the ability to think in a
divergent way (a pre-requisite for
creativity)?
• Anybody who scores 10/10 is
called a genius in creativity

Divergent Thinking and Schools
• 3-5 year old kids:

• 3-5 year old kids: 98% score as
genius

• 3-5 year old kids: 98% score as genius
• 8-10 year olds: 32%

• 8-10 year olds: 32%
• 13-15 year olds: 10%

• 8-10 year olds: 32%
• 13-15 year olds: 10%
• 2,000 adults 25+ year old: 2%

As Einstein said:
• It’s a miracle that curiosity
survives formal education.

• Cooperate versus being competitive.
• (example: the arm-wrestling exercise)

• Take the initiative versus social
loafing.
• (consider this video)

• Experiment versus analysing and
searching for the one best solution.

Say versus Do
Automatic Behaviors What we ask you
Conformity Stick your neck out
Competitive Cooperate
Search for best solution Experiment
Social Loaf Take the initiative
Conform Think outside the box

Message:
• Most of the behaviors that we ask our
people to follow (for innovation) are
the exact opposite of what their
automatic behaviors.

What wins out?
• A few hours of our boss (or
teacher) telling us what we
“should” do?
• Versus 40-50 years of experience
teaching us what is “good” for
us?

The sad truth:
• We keep telling you: “these are the
behaviors that we want from you”
• These behaviors all sound “common
sense” and “easy”.
• But the sad truth is that you spent the last
40 years of your life at home, school and
work learning the exact opposite
behaviors!

Third Principle to Know
like laziness to is actually
emotional exhaustion.

What Does This Imply?
• Go Beyond Telling People:
Analytical appeals are not enough!
• It’s tempting to prepare a
powerpoint presentation, listing the
things you want from your people—
it will not work!

What We Need to Do:
• If telling people that these are
the behaviors we want from
them is not enough, how then
can we get the “proper”
behaviors out of our
employees?

Answer:
• To get people to change their
automatic behaviors, you will
need to make the need for
change emotional.

An Analogy
• Psychologists have an analogy
for this: The Rider and the
Elephant

The Rider and the Elephant (Haidt, 2006)
• The Rider:
• Rational, Cool Cognitive
• Knows what we should do
• Holds the reins and seems to be in control
• The Elephant:
• Emotional, Hot
• Larger and more powerful
• Motivated by what we want (comfort, peace and
quiet, ice cream)

How Can you Make the need for
Change Emotional?
1. Things you see are more likely to evoke
emotions than things you read

Change Emotional?
emotions than things you read;
2. Stories (and how you tell them) are
more likely to evoke emotion than a
presentation.

Power of stories
Ignoring the evidence in favour of the story – a medical
example
Source: Freymuth and Ronan, Modeling Patient Decision-Making: The Role of Base-Rate and Anecdotal Information, Journal of Clinical Psychology in
Medical Settings 149
Negative story Positive story
Treatment A
90% effective
Treatment B
30% effective
‘Base rate
information’

Power of stories
example
88%Treatment A
90% effective
Treatment B
30% effective
‘Base rate
information’

Power of stories
example
39% 88%Treatment A
90% effective
Treatment B
30% effective
‘Base rate
information’

Power of stories
example
39% 88%Treatment A
90% effective
Treatment B
30% effective
‘Base rate
information’
7%

Power of stories
example
39% 88%Treatment A
90% effective
Treatment B
30% effective
‘Base rate
information’
78%7%

The Power of Stories
Prosecution
Facts
Facts
Story
Story
Defense
Source: N. Pennington and R. Hastie:
“Explanation-Based Decision Making”,
Journal of Experimental Psychology:
Learning, Memory and Cognition, 1998

63%
59%
Prosecution
Facts
Facts
Story
Story
Defense

63% 78%
59%
Prosecution
Facts
Facts
Story
Story
Defense

63% 78%
31% 59%
Prosecution
Facts
Facts
Story
Story
Defense
RESULT: A near 50% swing in the number of people saying
someone is guilty of first-degree murder based on whether a
story was told or not.

Change Emotional?
emotions than things you read;
2. Stories (and how you tell them) are
more likely to evoke emotion than a
presentation.
3. How do you frame the need for change?

For Example:
Can you think of a word?
-- A N Y

For Example:
MA N Y

For Example:
MA N Y
--ENY

Possible Signs:
• Can you please help a blind man?
• I am blind. Please help me feed
my children
• Is it a sunny day? I am blind
• It is springtime and I am blind
• I am blind and it’s springtime

Anchoring
• What comes first “anchors” the
mind to it.
• Everything that comes after it is
evaluated relative to what you said
or did before.
• Therefore: Put it in a context so that
whatever you say afterwards
shines.

Agenda
Can you use “symbolic actions” to
reinforce your message?
Can you generate momentum (for the
change you want) through early
victories that you celebrate with your
team?
Can you “advertise” the “right”
behaviors you expect from people?
Can you make them feel “special” for
doing what you want them to do?
Make it Emotional: What else?

Summary: The 3 strategies
• Provide Clarity
• Tweak the Environment
• Make the need for change
emotional

Who wants to be a millionaire:
169
Source: Jeff Howe, Crowdsourcing: How the Power of the Crowd is Driving the Future of Business.
Phone a friend:
Ask the audience:

You don’t have to think of everything
170
Phone a friend: 65%
Ask the audience:

You don’t have to think of everything
171
Phone a friend: 65%
Ask the audience: 91%

Practice Open Innovation:
• You do not have to discover
everything in life!
• Ask others for ideas and solutions to
problems—the world is your oyster.

Putting the idea into practice:
• The strategy of “Connect and
Develop” by P&G.
• P&G Mission (2001): “Fifty percent
of all new discoveries in P&G must
come from outside P&G”

Summary: 3 Ideas
• “Stretch” your people
into active questioning.
• Encourage the behaviors
associated with
innovation;
• Practice Open Innovation

In Conclusion:
• Lots of Things to Think About so let
me finish with one last thought.

The Knowledge - Doing Gap
Time
B
Profits
A

Overall:
 Everybody knows
 Only 1% do…

Therefore:
• Seize the moment!
• The future belongs to those who dare
take chances!

HR Square - Costas Markides & Frederik Anseel

HR Square - Costas Markides & Frederik Anseel

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