The 5 Types Of Innovation For The Future Of Work, Pt. 1: Employee Innovation
As the world of work continues to evolve at a rapid pace innovation continues to become both a top priority and a top challenge. For most companies, innovation is handled behind closed doors in a secluded part of the company that only a few have access to. This type of innovation is no longer practical, scalable or effective when thinking about the future of work. In order to succeed and thrive in this rapidly changing world, organizations must adapt by implementing five innovation models, all five of these are crucial. The five innovation models are:
- Employee innovation
- Customer Innovation
- Partner/Supplier Innovation
- Competitor Innovation
- Public Innovation
This will be a six part post that will provide a high level overview of all five of these models followed by sixth post that will be a summary and exploration of innovation ecosystems. In part one I will explore employee innovation. The concepts and ideas in this post are taken from my best-selling book, The Future of Work: Attract New Talent, Build Better Leaders, and Create a Competitive Organization.
Employees are the most valuable asset that your organization has, not some of your employees, all of your employees. Therefore it doesn’t make much sense to only rely on a few employees to come up with new products and services. The forward thinking and progressive companies allow any employee to come forward with an idea and thanks to collaborative technologies, doing so has never been easier. The concept of employee innovation is of course not new, but being able to scale it across a global company of many thousands of employees is. The idea that any and every employee can be connected to each other and to the information they need to get their jobs done anywhere, anytime, and on any device means that innovation can happen literally anywhere. An employee who just finished ringing up a customer at a retail store may have noticed a way to improve the employee experience, a call-center agent might have an idea to reduce call-time, a knowledge worker may have a suggestion for how to improve employee engagement, and a member from the janitorial staff might have an idea for how to reduce costs on wasted supplies. In most organizations today, these employees have no way to convey their ideas to anyone, they can’t get access to experimental capital to test their ideas, and the organization has no formal program in place to do anything with ideas that do get suggested. But then again why bother?
The logic here is, why rely on the intelligence of a few when you can tap into the collective wisdom of many?
At Toyota they implemented a “Creative Ideas Suggestive System” in 1951 and to date more than 40 million ideas have been contributed to the company from employees at all levels of the organization. Of course not every idea is implemented by Toyota but there was a time when they had at a 98% implementation rate. If you were to ask Toyota, or for that matter any other company with a successful employee innovation program, they would tell you that even though you don’t implement every idea, creating that culture of innovation where employees CAN submit ideas, is priceless. This means responding and providing feedback to employees even if their suggestions are not implemented. In addition to their CISS employees at Toyota on the assembly line are also encouraged to identify and solve problems when they see them by pulling the “Andon cord” which when pulled, stops the entire assembly line so that an employee can fix a defect that they might see (recently however Toyota shifted from the Andon cord to yell call buttons that employees can press).
Whirlpool is a home appliance manufacturer with over 70,000 employees around the world (disclosure, they are a member of the Future of Work Community). Since Whirlpool was first created over 100 years ago their focus has always been around manufacturing. However, recently they realized the imperative to become innovation centric. As a result they created a program (supported by technology) that allows any employee at the company to come forward with an idea or product improvement via online platforms that the company rolled out. In fact they have a whole structured process around innovation called “idea labs.” This is a company that clearly realize that innovation is everyones job. At the time I published my book (end of 2014) the average sales values were declining by 2% per year and after this transformation they have see sales values increase 2% in aggregate.
These are just two examples of companies that have successful employee innovation programs, Adobe is another great example that I have written about in the past. We can expect to see many more employee innovation programs kick into gear over the next few years. The same employees who are building products, servicing customers, and making sure the day-to-day operations of the company are sound, are the same employees that can come up with game changing ideas or identify new opportunities and threats. This is why employee driven innovation is so valuable and so relevant. However, with these types of programs most of the ideas are typically within the core competencies of the organization, meaning this type of innovation is still one sided and doesn’t always “push the envelope,” but it’s valuable nonetheless.
Organizations must start with employee innovation programs in order to build out the full innovation ecosystem. Organizations simply cannot scale innovation outside of the organization until they start from within.
Make sure to stay tuned to the full 6 part series over the coming weeks, in part 2 of this post I will explore customer innovation.