Introduction

Community determines ways we need to rate the talent we have, seek ways to find the best talent, and then determine how the community assembled finds ways to improve itself to strengthen it. Just as innovation is a continuous process perfected on improvement, so is the ability to better our company by finding, developing, and supporting the talent and community that is part of it.

Innovators who seek to improve our community have certain characteristics that can improve the success for a company’s innovation efforts. These characteristics include seeing things through a unique lens, having stamina and the right attitude, being conscientious, possessing the ability to maintain the long-term vision, and being a risk taker. While it is hard to hire someone with these qualities, it is important that companies look inward to find these people, or when it is evident this talent does not exist, then search externally. Innovative employees will drive the company and lead them to success.

It is important to build the right innovative network within the company. Top managers must look for employees who have the capabilities, can perform, provide leadership, and are driven. Many times, this talent comes not only from within, but globally. Therefore, managers must be aware of the talents they have available. This can be done by creating an environment that encourages innovation, builds rapport, and provides guidelines to support innovative employees.

Learning Objectives

In this chapter students will learn about the following:

• Characteristic traits of innovative people
• How innovators can maintain vision and drive to be successful
• How hiring practices have changed in the twenty-first century
• What it takes and how to build an innovative workforce
• Why global talent should be considered
• The advantages of hiring within an organization

Learning Outcomes

By the end of this chapter students will be able to do the following:

• Understand how innovator’s characteristics shape organizations
• Understand the value of seeing the world differently as compared to others
• Know how a good attitude and being accurate in work is important
• Know the items needed to maintain a long-term vision
• Know how Generations X and Y have changed hiring practices
• Know the reasons why a global economy has changed hiring employees
• Understand why developing talent within an organization is important
• Know the role top managers play to make innovation a part of the strategic plan

Key Terms

Stamina: The strength to persevere in the face of difficulty

Attitude: The feelings one has toward an object or organization

Leaders: Motivate teams of employees to accomplish the mission, vision, and purpose of the task at hand

Internal and external networks: Groups of stakeholders that are found inside and outside the organization that provide the opportunity to succeed

Differentiated capabilities: The collective skills, abilities, and expertise that allow one company a superior advantage over its competitors

Performance acceleration: The ability to attract the right talent to improve the workforce

Leadership development: The right leadership in place and being developed

Talent culture: The right culture in place to attract a diverse workforce

Who Makes Up the Community?

A common response to change is fear. Innovators look at the world through a different lens as they see opportunities and a myriad of ways improve existing products, services, and processes. Henry Ford envisioned building cars from an assembly line versus building them one at a time to reduce costs. Thomas Edison had 2332 international patents and 1093 US patents, including the lightbulb, phonograph, alkaline batteries, and electronic locomotion. Steve Jobs, a renowned innovator, helped facilitate the introduction of products such as the Macintosh, iPod, iPhone, and MacBook. The common thread between these innovators throughout the past one hundred years is the ability to identify a problem they want solved, which we recommend doing by writing a succinct problem statement, and then work hard to identify the best solution to implement. In other words, innovators continuously cultivate a dynamic solution-focused mind-set rather than a static problem-focused mind-set.

Innovators possess unique characteristics that human resources should identify to gain the knowledge and drive to move their company in the right direction. The characteristics include the following:

1. Innovative people can look at the world around them and see connections in ways not seen by others. This ability is difficult as most people see the world from a conformist view to accept what is present in their life as normal. Who could imagine using a lightbulb to illuminate a room versus a candle or replacing a telephone with a cell phone?
2. Stamina is an important trait for innovative people. Stamina is the strength to persevere in the face of difficulty. It hinges on two fronts:

Attitude is important, as most people will disagree with your thought process. One must keep the right attitude and fight through negativity. Attitude is the feelings one has toward an object or organization. Innovative people always a have a bit of a “Maverick” personality. A maverick personality is one that is comfortable taking risks and receiving criticism and that perseveres through difficult situations.

Getting it right. Rarely is the product, service, or innovation right the first time. Failure is the norm; thus, one learns, evolves, and moves forward.

Many innovators had several failures before their ideas were accepted. Steven King had Carrie rejected thirty times before getting it published, Tom Monahan went through several bankruptcies before establishing Domino’s, and Sir David Tyson went thorough 5,126 failed prototypes before amassing a net worth of $5 billion. Stamina is also essential to innovative people because of their ability to keep trying to achieve success. From the examples, it is obvious that successful innovation doesn’t happen on the first try. It is important that innovators keep persevering to achieve the goal they set out to accomplish. Therefore, the ability to maintain the original vision and drive is essential for success.

The following are traits the good innovators possess and use to drive success:

1. Innovators must be leaders. Leaders can motivate a team of employees to accomplish the mission, vision, and purpose of the task at hand. Leaders must have a passion that is contagious to their subordinates and excite them to want to carry out the goal at hand. Leaders must also inspire people to work together to bring the creative innovative concept to life. In addition, good leaders use data to help drive decisions. A key point to note is data. Intuition is great and necessary but too often innovative projects are the result of someone’s thought process, or “my idea without data to substantiate.” The result is that projects move through the innovation process until the business case is analyzed, not just the financials but the data as well (industry, consumer, society, etc.) to determine that it support the financials. The result is that the data usually does not support innovation because of the singular perspective.

2. Another trait of leaders is the ability to manage a diverse team. Innovation teams should be comprised of a diverse group of employees to reduce groupthink, explore a greater variety of thoughts, and understand how new products affect others. Leadership is essential in innovation to motivate, excite, and guide the process to achieve maximum success.
3. Innovators understand the need for establishing and maintaining both internal and external networks. Internal and external networks are groups of stakeholders that are found inside and outside the organization that provide the opportunity to succeed. Great innovators are continuous learners. They seek to understand things they do not always have knowledge of if they feel it is relevant. It’s not that innovators think out of the box; they simply do not have a box. The world, all its people, and the universe are their box used for innovation.
4. A key element of innovation is the support of top management. Managers are the internal network that knows how to innovate with speed due to having the authority and trust of their employees. Innovative people realize this and work with C-suite executives by keeping them abreast of the progress and accomplishments of their work. External networks are also important as the talents, expertise, and skills needed to succeed may not be available to innovation teams internally. Therefore, a collaborative approach may be needed to succeed, and top innovators realize this and form needed networks to gain success.
5. Innovators are risk takers. Innovators are not afraid to take chances to accomplish the goal of improving a current good or service, or to create a new-to-the-world one. The ability to take risks or have the courage to take chances is not typical, as most people don’t want to jeopardize their careers. Taking chances also opens one to criticism on the part of management and coworkers. Risk takers are often chastised when their ideas don’t work, but when their ideas work, they are praised for their success. Innovators can look beyond their peer’s assessment of their work and strive to achieve the goals they set forth to accomplish. Therefore, the ability to take chances, endure criticism, and have the courage to try new things is what motivates innovators.

While this list is not exhaustive, it gives the reader an idea that innovators are unique and embraced by their company. When people see their world in one way, innovators see it in another. This ability is unique and requires people to train their minds to see opportunities that are present to them, but not necessarily visible. The good/great news is that innovation and creativity are the most sought-after talents today. Nothing happens without people who are energized, aligned, and working together, thus everything ultimately revolves around people and talent.

It is important to make connections in the world we live in to see how different ways of doing what is normal can be achieved. To do this, people need to take time and reflect on what is currently done and find alternatives that can be utilized to do things more efficiently or better.

Talent and Community

The hiring practices of the twentieth century are as outdated as leisure suits and bell-bottom jeans. To recruit the best talent focused on innovation, companies must change the way they hired employees in the past. A major contributor to this is the emergence of Generation X and Y replacing the baby boomers in the workforce. While these three generations coexist in the workplace, each generation is distinct from the other. For example, baby boomers (1946–1964) seek monetary rewards, stability, and a flexible retirement plan. They aren’t in need of constant feedback from managers and are very goal oriented. They also seek promotions, feel valued for their expertise, like large offices and reserved parking spots, and like having prestigious job titles to reaffirm their hard work. Gen X (1965–1980) seeks a good work-life balance as they have watched the baby boomer parents work so hard to make money and climb the corporate ladder. They prefer to work without a lot of supervision and a high percentage start their own businesses. They value opportunity, flexible work schedules, being recognized for their accomplishments, telecommuting, and opportunities to grow. Gen Y (after 1980) seeks ways to give back to the community and is attracted to corporate social responsibility, thrive off environmentally friendly work spaces, value a good culture, and like flexible work schedules. They also like the latest technology, time off, immediate feedback, and prefer structure and continued learning.

Employers must realize that gen X and Y will replace baby boomers by 2020, accounting for 60–75 percent of the global workforce. As gen X and Y take over as the dominate workforce, hiring practices must be adapted to what is most important to these generational workers.^[4]

Besides generational differences, other changes in the modern workforce are the flattening of the organizational chart due to inefficiencies of multiple layers of management and the ineffectiveness it causes, hampering the ability to compete in a global workplace. Today’s workforce is promoted much faster based on proven leadership, performance, and demonstrated skill sets. In addition, the hiring practices of the past relied on human resources to fill spots to bring about innovation with little help from top-level managers. As our competition is more global than regional or local, companies must adapt their hiring practices to a strategic approach involving C-suite executives.

A study conducted by Strategy and PWC looked at global workforce trends and found that top managers need to change the old hiring practices to attract the most innovative employees. The study identified demographic and generational shifts in the marketplace that require a change in the way attracting and hiring top innovators takes place. Of interest was that the global workforce is made up of only 17 percent white males. The greater piece of the labor force is composed of women and people of color. More specifically, the growing number of Chinese and Indian college graduates, more women graduating from college than men, and a massive generational switch into the global market have changed traditional hiring practices.^[5]

Therefore, changing demographics, generational differences, and new ways to access promotions will require the human resource practices of the past to be revamped to attract the best people to innovate and support the mission and vision of companies.

To build an innovation workforce and recruit the best employees to support the innovation needs of companies, firms must first see what capabilities they need to grow, how to nurture leaders, how to get to market faster, and how to develop the right community of continual learning. A study conducted by PWC on global talent innovation identified four fundamental building blocks of talent innovation:

1. Differentiated capabilities: Does the company have the skills, knowledge, and abilities to capture a competitive advantage?
2. Performance acceleration: Does the ability to attract the right talent improve the workforce?
3. Leadership development: Is the right leadership in place and being developed?
4. Talent culture: Is the right culture in place to attract a diverse workforce?^[6]

Differentiated Capabilities

Differentiated capabilities are the collective skills, abilities, and expertise that allows one company a superior advantage over its competitors. Differentiated capabilities rely on a cross-functional approach that allows companies to change the way business is conducted to gain a strategic advantage by utilizing the skills and knowledge of the people that comprise the team. The key is the ability of the team to recognize the talents of the members and to fill gaps or provide training to stay competitive.

The study also indicated that top managers must segment employees who are core employees (possessing the most skills, knowledge, and abilities), support employees (those who add value through other means) and noncore employees (those who no longer possess the skills needed). By segmenting employees, companies can assess more effectively the innovation team and how they can seek an advantage based on the members they have in place or the talent they need to recruit both internally and externally.

Performance Acceleration

Performance acceleration refers to the method in which companies manage performance in terms of how to measure, compensate, and promote employees. The ability to properly motivate employees requires an understanding of what they value to drive behavior. Some employees are extrinsically motivated, so awards, cash, and promotions would serve to increase their efforts. Others are intrinsically motivated; therefore, a thank you or the feeling of bettering the company, others, or society may be enough. Most employees are a mix of both, so the top managers who are understanding of their teams’ needs for motivation and increasing performance is vital to stay competitive. In other words, leaders must show they care by rewarding both the company and the employees. Employees want to know if they are important or not, so the ability to cater to their needs is important. In addition, the high cost of replacing employees makes it advantageous for firms to retain the workforce they have if they perform at an acceptable level. High hiring costs, training, and mistakes due to lack of experience, are just a few things that add to the cost of bringing in new employees, so retention is a very viable option for firms.

Many businesses foster a sense of community among their members, and those members get out what they put in. Performance acceleration is much the same way. Members of the cross-functional teams realize their performance will be evaluated by top managers; therefore, their performance will have an impact on the rewards they receive. Also, the keys to increasing performance are to establish goals that are measurable and obtainable, place the core employees in key positions, have the support of top management, and reward those who accomplish the goals established.

Leadership Development

Leadership development is identifying those individuals who possess the ability to take charge, have a vision for success, and have the mental capacity to handle rapidly changing market complexities. In addition, due to a changing global workforce, leaders must learn a variety of cultural differences, perspectives, and views that differ from traditional workers in the US.

It is important for companies to develop a leadership program supported by top management to cultivate future leaders. It is important to recognize individuals who demonstrate the ability to motivate, lead, and work with a variety of individuals. The old view of promoting someone from within who has tenure with a company or hiring outside of the company due to experience fading. Too many companies hire failed CEOs to manage a company, just to watch that company falter like the previous ones they managed. Today’s leaders have a grasp of the whole company; they are proven innovators, have global experience, and are good change agents. Once an individual is found who represents these variables, it wise to develop them with the help of top management. This practice should be carried out for not only one person but as an ongoing practice for proven leaders to foster future leadership and direction.

Talent Culture

Talent culture is community’s reputation that attracts and retains the best talent needed to innovate. As described earlier, a community is made up of beliefs, values, and behaviors needed to empower its members and give the sense of inclusion. The PWC study reveals that four factors drive engagement:

1. The level of respect, value, and recognition felt on the part of employees
2. The perception that an employee’s job betters the company
3. The level of pride in the organization and its mission and vision
4. The level of trust and ability in top managers

The ability of companies to attract innovative employees is the key to future growth and success. The hiring practices and ways of promoting employees of the twentieth century have changed drastically. As generational change from baby boomers to more gen X and gen Y employees occurs, ways to stimulate these generations will need to be recognized to retain and attract core employees. In addition, companies need to develop ways to foster and grow leaders. One way to do this is through empowerment. Let young leaders take on projects and initiatives and give them the right to fail. Too often there is a fear-of-failure culture, but if young leaders learn from their mistakes, it will make them stronger leaders in the future. Leaders exhibit the ability to motivate, think quickly and decisively, work with a variety of people and cultures, and promote innovation. Identifying these people and nurturing them will help to increase the pool of leaders to drive growth and success now and in the future.^[7]

Where Should We Be?

To recruit and retain the best talent possible should be consistently one of the top five strategic and operational priorities for any company. The Economist published a study entitled “Talent Strategies for Innovation” where they indicated that C-Suite involvement in talent management has increased dramatically. The study also indicated that 75 percent of executives indicated that talent management is very important to their organization. In addition, the question of where to locate research and innovation centers was asked. The findings include areas where there was an abundance of talent and universities with accessibility to well-trained individuals. The ability to find talent and the innovative mind-set will force companies to collaborate with organizations they never thought of in the past and to seek talent in places never thought of.^[8]

While the emphasis placed on seeking talent is a top priority for managers, the execution of the strategies usually falls on lower-ranking managers. This puts the burden on middle- to lower-level managers to find and hire these core employees and introduce them to the community. Therefore, there is a greater need on the part of top management to communicate to the middle- and lower-level managers the expectations and desires of hiring innovators who will help grow the company and provide a good fit for the community.

McKinsey & Company published a study entitled “Leadership and Innovation” and noted that top managers indicated that innovation is one of the top three drivers of growth for their companies. While innovation is recognized as an accelerator of growth, is was also noted that top managers were baffled by the process to innovate, thus, creating a dilemma. Ninety-four percent of the top managers surveyed admitted that mimicking other companies with successful innovation strategies and relying on the company’s community involvement were the key drivers they used for innovation. Therefore, without a defined innovation strategy, how can a successful innovation plan be instituted? McKinsey & Company recommend three building blocks to create an innovative organization:

1. Use innovation as a strategic agenda created by top management to encourage growth within the organization.
2. Recognize existing innovators or innovation opportunities already in existence. Many times, the catalysts for innovation are present but without an assessment of the skills and knowledge present within the organization, top managers have no idea what assets they have at their disposal. As discussed earlier, human resources need to have this information documented to internally fill the innovation needs of the company and to then seek external candidates to fill the gaps.

Foster a community of trust with employees. Top managers need to create a community based on trust between themselves and the employees to promote the ability to convey their ideas, promote innovation in a manner that is nonthreatening, and grow the company following the established mission and vision.^[9]

What can top managers do? Innovation must be part of the strategic plans of the organization. It must be designed to support the mission and vision of the company. Therefore, top managers must create a mind-set that fosters innovation, is open to listening to ideas from employees, and encourages this type of behavior. Innovation has historically been encouraged in times of economic prosperity and discouraged in down times. Top managers must be consistent and encourage innovative suggestions and create strategies regardless of the economic state, as innovation gives companies the ability to prosper in both good and bad times.

What needs to happen to create this innovative mind-set? Top management must be held accountable by the CEO or board of directors to keep innovative strategies and behaviors in the forefront of the planning process. McKinsey & Company offer three suggestions to advance innovation:

1. Define the innovation that drives growth and meets strategic objectives. Top managers must lead the charge to drive the innovation efforts for the rest of the company. Without continuous encouragement from top managers, innovation efforts will fall short.
2. Make innovation part of the meeting agenda. Including an agenda item highlighting innovation sends a strong message that innovation is always a part of the plans the company wishes to pursue.
3. Establish measurable and obtainable targets and goals for innovation. Top managers should reward (extrinsic or intrinsic) innovators and encourage their behavior. An example of a measurable goal for financial strategies could be launching a product within a year (goal 1) and obtaining 10 percent market share in six months (goal 2). For behavior, an example could be including 20 percent of the innovative ideas that come from within the company through cross-functional teams in one year. Whatever the strategy employed, goals that are defined and obtainable both motivate and hold teams accountable. It also encourages healthy competition, which also is a motivator for success.

Key Term Review Activity