Innovation? Planning for business success

How do businesses generate new ideas? How do they turn those ideas into products?  How do they do this REPEATEDLY?

Innovation pic 1

One reason for an interest in innovation is obvious. Companies that can out-innovate their competitors can delight their customers and build market share.  However it is important to factor Innovation into the workplace as the old model is changing.

The old model of innovation was based on four assumptions. The first was a “West is best” perspective.  Western companies came up with new ideas and exported them or developed them in emerging markets.  At one time, companies interested in innovation focussed on Silicon Valley.  Today, the new frontiers of innovation could be Shanghai or Bangalore for instance.  They could be delivered by individual entrepeneurs as much as a multinational.

the world for innovation blog

Globalisation and innovation

Western businesspeople should visit Electronic City in Bangalore. It is one of hundreds of electronics cities that have sprung up in emerging markets.  Overflowing with hundreds of thousands of researchers, they are no longer allowing Western companies to define the future.  India’s Hindalco Industries bought Canadian aluminium maker for $6million.  Tata Motors bought Jaguar Land Rover from the Ford Motor Company.  Huawei Technologies, a Chinese telecommunications giant, is one of the largest patent applicants worldwide and the list goes on.

Bharti, an Indian mobile company, charges some of the lowest fees but is worth $30bllion. It has taken outsourcing to a new level, only retaining the core business of selling phone calls.  Natura Cosmeticos, a Brazilian cosmetic company, has a lean approach to Development.  40% of the company’s revenues come from products introduced within three years.  Yet it only has a couple of hundred employees in its Research and Development department.  Instead, it forms partnerships with universities and takes up products it can license from international locations. So, for professional service firms, your client groups are also changing.

Does your firm have an innovation strategy too?

Innovation is something you must build into your organisational competency framework. It will define the knowledge, skills, and attributes needed for all the people within your organisation. Each individual role will have its own set of competencies needed to perform the job effectively.  So, Incorporate innovation into each job function.

To develop this framework, you will need to have an in-depth understanding of the roles within your business. ( It is important to make it relevant to the people who will be using it, so that they can own it.)

When designing a competency framework:

  1. Involve the people doing the work – Frameworks should not be developed solely by HR people, who don’t always know what each job actually involves. Nor should they be left to managers, who don’t always understand exactly what each member of their staff does every day. To understand a role fully, you have to go to the person doing the job – as well as getting a variety of other inputs into what makes someone successful in that job. Always build innovation into your discussions.
  2. Communicate – People tend to get nervous about performance issues. Let them know why you’re developing the framework, how it will be created, and how you’ll use it. The more you communicate in advance, the easier your implementation will be.
  3. Use relevant aspects of innovation -ensure that the competencies you include apply to all roles covered by the framework.

Developing the Framework

There are four main steps in the competency framework development process.

Step One: Prepare

  • Define the purpose – How you plan to use it will impact whom you involve in preparing it, and how you determine its scope.
  • Create a competency framework team – Include people from all departments that will use the framework and represent the diversity of your organisation.

Step Two: Collect Information

This is the main part of the framework. Generally, the better the data you collect, the more accurate your framework will be. Observe and Interview people, create a survey then analyse the work.  You must be clear as to which behaviours are used to perform the jobs covered by the framework and where does innovation fit in.

You may want to consider the following:

  • Business plans, strategies, and objectives.
  • Organisational principles.
  • Job descriptions.
  • Regulatory and other compliance issues.
  • Future organisation strategy
  • Customer and supplier requirements.

Step Four: Implement

As you roll out the finalised competency framework, remember to communicate, communicate, and communicate. To help get understanding from members of staff at all levels of the organisation, it is important to explain to them why the framework was developed, and how you would like it to be used. Discuss how it will be updated, and which procedures you’ve put in place to accommodate changes.

Key Points

Creating a competency framework is an effective method to assess, maintain, and monitor the knowledge, skills, and attributes of people in your organisation. By adding innovation, you will also allow each staff member to add value to the business.

Understanding the linkage between individual roles, innovation and performance will make the effort well worth it and keep your company ahead of the competition.

Finally, do remember that bigger firms tend to attract external people who are prone to adopt a company’s culture rather than be rule breakers. It is essential to formulate a dedicated innovation hub that freely recruits external candidates using your new Competency Framework.

 

Re-invent your HR function – it will be a central plank for your business success in 2016

Human Resources professionals need to see major changes in their job functions in 2016, even if their job title remains the same. The days of HR professionals hiring and firing based on historical criteria or spending their time calculating payroll and monitoring sick days will be well and truly over.

Surveys indicate that the majority of multinationals anticipate major global mobility challenges.   While companies in all regions anticipate increased cross-border moves, on average, U.S.-headquartered multinationals anticipate transferring more employees internationally, compared to those headquartered in Europe or Asia.

More than half (54%) of those headquartered in the U.S., 43% of those headquartered in Asia and 26% of those headquartered in Europe, said that they expect these assignments to increase.  The most frequent reason cited for international assignments was business expansion overseas, named by 87% of multinationals. The second most cited impetus was knowledge transfer (65%), followed by career development (47%).

 

While the reason behind increased expatriate moves seems to be strategic, the policy followed for making these moves is sometimes not.   Only half (50%) of the respondents use planned talent management and cultural induction processes for making international assignment decisions, and just 47% assign primary responsibility for talent management, cultural and diversity awareness to the HR department only. More than a quarter (27%) do not have a global approach at all and  from my experience, I would suggest that in actuality the figure is even higher.  For Asia, the number really is more— almost half (49%) say they do not have a global approach!

When HR management is done correctly by qualified and informed professionals the added value to an organisation is immense. If you get the culture, the people and induction processes right, then great business performance will follow. With a growing number of job functions and increased global focus, HR professionals must become more sophisticated in their approach to hiring employees, managing a workforce, raising cultural and diversity awareness as well as aligning their decisions with organisational vision, strategy and policy.

In addition to globalisation, there are three other trends that are causing major changes in the way HR duties will be performed:

1) Systems will completely take over transactional HR roles. They can perform tasks in minutes that used to take hours or even days to perform. So now, HR professionals have time to focus on higher-level activities.

2) HR professionals will take on the role of internal consultant in the areas of change management, talent assessment, leadership development, cross cultural and diversity awareness.

Freed from a crushing amount of transactional work, HR professionals will be able to spend more time monitoring and developing the workforce. If job fit problems do arise, they can rectify them sooner.

The HR professional as a consultant will become the new lever for organisational success.   They must be skilled enough to identify potential leaders, give advice to senior management , raise cross cultural and diversity awareness and assess employee performance.

3) The line between management and HR will blur.

Both management and HR functions have different tasks but a similar goal: making sure that employees succeed in the right positions in order to improve organisational performance. This means that managers and HR professionals must work together to identify people who need to be developed and promoted, as well as to identify people who are no longer a good fit for the company.

These trends will redefine business performance. Companies who encourage HR professionals to embrace these changes will be much more successful – they will have the right people at every level in a culturally aware and truly diverse workforce with everyone being constantly developed to their full potential.

Take a look at how the HR function in your organisation operates? Now is the optimum time to consider what your HR function can and will do in the future.

YOUR BUSINESS CASE FOR EMBRACING THE DIVERSITY AND CULTURE AGENDA – HOW TO BE MOST EFFECTIVE

Twenty eight year old Vinod (alias) was the first person in his family to go to university and the first to take up a professional white-collar career.  His father drives a Taxi in Delhi; his mother is a teacher. They had high aspirations for their three children.

Twenty seven year old Lian (alias) was the first person in her family to do a degree then take up a business career in the West.  Her father is an artisan, her mother works for the Chinese Government.

Do they think their ethnicity has contributed to their current careers?  Explicitly, they probably do not.  However, it does provide them with rich competencies to build on as Western organisations re-address the diversity imbalance.

Sense check?  Diversity is a red hot potato in businesses, especially in the West.  However, in the East, there tends to be an over-riding belief among executives that it should be “their way or the high way”.  Even, if this is not explicit behaviour, I have come across so many people in different Chinese or Asian who tend to superimpose Eastern business behaviours on to their Western counterparts.

It may be 2015, but Eastern industrialists have not woken up to the embarrassing fact that at higher levels their businesses are still male and middle class.   At lower levels they are still predominantly middle class.   Is it not interesting that great swathes of society should be excluded especially in this age of globalisation?

Other recent survey results are also quite surprising.  In the UK, ten per cent of the workforce is non-white and 78 per cent of organisations are not representative ethnically.  In the US, 32 per cent of the workforce is non-white and 97 per cent of senior managements do not represent this!

The hard truth is that some employers are unlikely to make diversity choices if they cost money.  Post-recession, the focus is on recovery and making profit.  So, it is even more important to have a business case in terms of improved quality and relevance of output.

Various studies have looked at gender.  Last year, a study by Gallup looked at more than 800 business units and found that gender-diverse operations have 14 per cent higher average comparable revenue and 19 per cent higher average quarterly net profit than more homogenous operations. Another study found that gender-diverse teams in its organisation produced results five per cent better than homogenous teams.

The more intractable issue of ethnic diversity has still not been addressed meaningfully.  In 2014, McKinsey attempted a first statistical study of the benefits of gender and ethnic diversity in the workplace.  Its aim was to review the diversity of the board and senior executive level in organisations, then quantify  the relationship between diversity and performance in terms of increased profitability.

The study considered 366 companies in the US, UK, Canada and Latin America.   Statistically, it found a significant relationship between more diverse leadership and better financial performance. Specifically, companies in the top quartile for gender diversity were 15 per cent more likely to have higher than industry average financial returns. When it came to ethnic diversity, however, the likelihood of having higher than average industry returns more than doubled to 35 per cent. What is more, the study found that less diverse companies were 25 per cent less likely to be more profitable than their industry average.  Simply, the more diverse the company, the more likely it is to make higher profits.

Some things to consider if you wish to achieve greater diversity?

Companies tend to be either good at either gender or ethnic diversity.  There are a however a significant number of methods to align the two approaches and incorporate them into business as usual.  It must be led from the top and not allocated to the domain of HR alone.

A more diverse workforce will give a wider perspective.  Negotiations will deliver new understanding of fundamental cultural differences in approach that may have eluded you.  Your organisation will also be more capable of producing a rich variety of output that is innovatory, and more resonant, which will enable the business to embrace a wider range of targets.  Often, the best ideas are out of our comfort zones.  Our normal human disposition is to avoid things which may be prove uncomfortable.  So, diversity as a societal issue not simply a business issue should be tackled.

It is important to integrate understanding of others in the context of an organisation’s cultural positioning as well as gender and ethnic diversity plus individual style and behaviours.  Encouraging exploration of “comfort zone” as a business driver is always helpful.

These studies did not look at the effect of diversity at middle management and junior levels.  In the dot.com world companies are increasingly encouraging young, diverse workforces.  Diversity effectively needs to be incorporated into continuity and succession planning- it is essential to develop a genuinely diverse workforce at every organisational level.  Otherwise, the worst case scenario, it becomes “tokenism” or just window dressing.

The same drivers of performance apply to all industries. Greater diversity, properly embedded, will build the virtuous circle and eventually help to attract the best talent and provide a better understanding of a wider range of market segments.

Class is another area that has not yet been studied.  At the start of this article, I gave two examples which may have caused a reaction.   Race and class are intimately linked when it comes to exclusion.  Class seems to modify people’s reaction to ethnicity and may even be a major driver behind the lack of ethnic diversity in businesses, East or West.  Ethnic identity becomes less of a barrier when it’s concealed behind an acceptable accent and business dress sense.

There are, of course, many other dimensions of diversity: sexuality, religion, region of origin, age, physical and mental disability and even personality type.  One of the most important findings is that for all its benefits, diversity does not just happen.

Success will not come from a memo or end with the recruitment of a few individuals from target groups.  It is essential that companies have a robust transformation programme with an implementation plan that incorporates how to embed diversity.  The programme also will need to explicitly address unconscious bias.

Typically, at Satamana, we find that it is first important to incorporate genuine aspirations for diversity in all its dimensions into the organisational strategy.  This requires visible commitment from the leadership team and will not happen overnight.

So, how is this different from other organisational transformation programmes?  It puts diversity at its core – understanding the desired organisational culture and how this may be interpreted in other locations. This is not about ensuring that there are a whole range of nationalities in the workforce.  It is also about understanding these different cultures and how they interact with your desire business culture.  We have found that an agenda which incorporates a series of support activities implemented over time, sensitively and with genuine curiosity will deliver significant results.

My best advice? Reframe diversity as a business growth opportunity for your organisation.

Understanding national cultures and how they can affect business performance

1007160_21c50e84

In the business world, national culture is frequently undervalued.  Bottom line and key performance indicators (KPIs) tend to rule and (the less measureable) organisational culture combined with national culture can be ignored.  The differences in nationalities and how they approach business activities is frequently disregarded and many companies tend towards “tokenism” when they claim to be international.  For instance, if they are planning to enter a new territory, they hire a national without paying due regard to the way they will interact within the organisation.

Yet, ironically, the business world is full of interactions between people, groups, functions and nationalities who think, feel and act differently.  Aspects of cultural interaction can make or break the situation.  Daily I hear from Clients who have reached a business stalemate due to issues of culture.

Last week I provided coaching on an issue where an Asian manager has brought all his (working culture from back home) autocratic behaviours to work with an American business colleague who was intimidated to such an extent that it  subsequently caused untold damage in a client situation.

Yesterday, it was a Non Resident Indian (NRI) who was sent on a project to Delhi by his British employer.  Quite often, the Non Resident Indian can have become so westernised that they sit uneasily in both camps.  Indian business culture becomes frustrating and yet because they look local, they are not given the lee way by the workforce that a British colleague may have received.

This morning, slightly closer to home, a client has a situation which, in my view, has cultural overtones.  Her management team hail from 5 different European countries and their beliefs and  behaviours are underpinning some of their expectations.  This is causing needless friction as she has so far refused to engage in a teaming discussion.

It is therefore inevitable when multinational workforces require mutual co-operation to deliver business performance, you will find that mysteriously, deals falter; occasionally initiatives will become grid locked and thriving activities start to fall down.  The worst thing is that you may not get to the root cause easily as inter-cultural working relationships are so often disregarded.

One of the reasons is because differences in thinking and ways of doing things among different nationalities have been ignored.  Understanding the differences in the ways leaders and their followers think, feel and act is an excellent foundation for helping businesses work in harmony between East and West, North and South.

imagesSYVRYW81  Some of the areas to be aware of  when understanding how nationalities work together in one company culture include:

1)  Understanding national measures for the degree of inequality in society

2) The national Power-Distance Index (collectivism vs individualism) – where it fits

3) Listening and communication styles

4) Business attitude to strategy and innovation

5) Approach to gender and diversity issues

6) Understanding of time

7) Virtual communication across time zones

8) Intended versus unintended conflict

9) Attitude to uncertainty

10) Organisational stereotyping

How important is internationalisation for your business culture?

Culture, or “the way we do things around here”, is created collectively by everyone in an organisation. Behaviours and actions are then guided by the shared culture.  Peer groups behaving in ways required by the perceived “OK culture” legitimise and reinforce it further.  Add internationalisation to the mix and without clear guidelines you can develop a volatile and ineffective mix!

Delhi team 2015Delhi leadership conference – September  2015.

Joint venture Satamana-KFVC-Energy Quest

Building an effective global business culture

In a business context, it is good practise to understand both organisational culture and national cultures. Inadvertent misunderstandings can become deal breakers. At the very least, cross cultural misunderstandings are minor irritants; at worst they lead to major conflict.  I have lost count of the times that we have been invited to carry out interventions for organisations with serious business performance issues resulting from seemingly small differences which had become blown out of all proportion!

Organisations with strong global cultures combined with multi-cultural understanding perform better. They bring the best teams together, sustain high morale and keep employees as well as each other focussed on the purpose and mission.  Companies who understand local business rituals together with their own strengths and weaknesses fare better than more introspective companies.

A strong global culture does not happen by accident.

Effective global firms require systems, policies and competencies that encourage positive leadership behaviours – then they will inspire and renew the people around them.  Through sound leadership and encouraging ideas from the people who are operating the systems and processes, companies will encourage free flow of ideas.  In addition, different countries will have other specific issues that need to be addressed.

When putting together your programme try and include some of the following areas:

1) Degrees of inequality

2) The Power-Distance Index (collectivism vs individualism)

3) Gender and diversity issues

4) Attitude to uncertainty

5) Approach to time

6) Business approaches to strategy

7) Intended versus unintended conflict

8) East- West communications

9) Organisational stereotyping

10) Virtual communication across time zones

Finally, listening and being able to understand local nuance will make a difference. A potential global leader must understand how to think and adapt globally. Gaining insights into cross-cultural beliefs and behaviours will broaden leadership thinking.

Taking these recommendations will help your organisation to develop advantage through a strong, inclusive and collaborative global culture.  I hope this helps to stimulate your thinking on internationalisation? It might seem simple but do dig beneath the surface to be even more effective.

Nilakanthi chairs the first ever IIBA conference

????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????

L to R:  HE Ambassador for India  Lokesh, Professor Ciaran Hogairthe UCD, Nilakanthi Ford, Maeve Collins, Ireland Department Foreign Affairs

‘India:Ireland- Culture, diversity and women in business’ September 24th, Dublin

Conference speakers included Minister for Health, Leo Varadkar, HE Mrs Radhika Lal Lokesh, Ambassador for India to Ireland, Bibi Baskin, broadcaster RTE and BBC, Sheetal Mehta Walsh, Founder and President of Shanti Life, Maeve Collins Department of Foreign Affairs, .Andrew Kavanagh, Kavaleer Productions, Paul Rowe, Educate together.

Heather Saksem OCS, Minister Leo Varadkar, Paul Rowe CEO Educate Together,Nilakanthi Ford KFVCl to r: Heather Saksem ocs, Ireland Minister for Health, Leo Varadkar TD, Paul Rowe Educate Together, Nilakanthi Ford

The IIBA conference commemorated the centenary of the departure of Irishwoman Margaret Cousins to India. She was subsequently to become the first female District Judge in India, went on to found the Indian All Women’s Conference and is attributed to have composed the tune of the Indian National Anthem.which is still used today. It highlighted the long history of engagement between India and Ireland.

Speaking about the conference, Nilakanthi Ford, Chairperson of IIBA (Ireland India Business Association) said, “Ireland and India have always shared many things in common including history, language, legal systems and values but despite that, trade and business between the two countries has remained well below its true potential. India is poised to become the third largest economy in the world and economists estimate that India will have the largest number of middle class people in the world by 2020, which will create significant opportunities for exporters from Ireland.”

????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????

l to r:  Nilakanthi Ford, Annette O’Donahue AIB, Bibi Baskin Broadcaster, Sheetal Walsh,Shantilife