- Building innovation is one of those hot topics that yield all sorts of discussion about disruptive technology, including the cloud, 3-D printing, social media and digital infrastructure
- To truly innovate and remain competitive, companies must respond to changes in global trends in talent — including developing leadership skills that drive innovation
- The right talent creates innovative cultures within a company and, thus, can attract more of the best talent
By Gary Coleman
Building innovation is one of those hot topics that yield all sorts of discussion about disruptive technology, including the cloud, 3-D printing, social media and digital infrastructure.
But what really spurs innovation may come down to something much more basic: talent.
It’s no coincidence that countries rated the most innovative year after year are also those that invest in talent. For instance, the World Economic Forum’s Competitiveness Index ranks Switzerland number two in the innovation indicator (of 148 countries) — and number four on the higher education and training indicator (which measures a country’s investment in building strong skills and talent).
Similarly, Singapore, ranked number nine on the index’s innovation indicator, holds second place in higher education and training.
Conversely, regions where the right talent is in short supply are also those that appear to be lagging in innovation-driven growth. Talent, according to the World Bank study Latin American Entrepreneurs: Many Firms but Little Innovation, is one of the major challenges to building innovation in Latin America.
But what does the talent that drives innovation look like? While it doesn’t necessarily involve expertise in new technology, there is no denying the fact that new technology makes a certain set of skills critical. According to the recent Global Human Capital Trends 2014 report from Deloitte’s US firm, the skills we need today and in the future are dramatically different from what they were only five years ago.
I’d argue one of the most desirable skills that fuels innovation is the ability to respond to change. Change is the real driver of innovation. That means talent has to be nimble, ready to learn and able to see new trends coming. Vice President for Finance Affairs and Professor of International Business at National Taiwan University Ming-Je Tang summed it up succinctly on a panel I moderated when he said: “We must produce students with the ability to manage change. We must teach them to learn how to learn.”
To truly innovate and remain competitive, companies must respond to changes in global trends in talent — including developing leadership skills that drive innovation. However, the global human capital trends survey found that only 16 per cent of HR leaders are confident of their readiness.
That’s a challenge for business since innovative people want to work for innovative companies. In fact, 78 per cent of millennials, who are already emerging as leaders in technology and other industries and will comprise 75 per cent of the global workforce by 2025, are strongly influenced by how innovative a company was when deciding if they wanted to work there, according to Deloitte Global’s annual survey of millennials. That number jumps to 89 per cent for millennials in Latin America and roughly 90 per cent in China and India.
The right talent creates innovative cultures within a company and, thus, can attract more of the best talent. It’s a virtuous cycle. So how can companies create a culture that fosters innovation?
First, companies need to concentrate on the right behaviours to jumpstart that cycle. Among millennials already on the job, 63 per cent believed the biggest barriers to innovation were management attitude, and 61 per cent cited operational structures and procedures. Culture and structure are two key factors that reinforce innovation at organisations.
Talent has to be nimble, ready to learn and able to see new trends coming.
This means knocking down silos and creating a flexible environment that promotes collaboration. I find that well-established players in a sector — the ones with the money and the resources to invest in research and product development — are often the ones with the least innovative cultures. As an Economist comparison of big and small enterprises found a few years back, when it comes to innovation “the big can, the small do”.
Years of building up bureaucracies and procedures hamper agility and the ability to respond to market trends. In contrast, start-ups are blowing past those legacy structures and relying on technologies like the cloud to replace them. This means less drag, more flexibility, more collaboration, and more innovation.
Second, a company needs to establish the right tone at the top. Without a leader who is committed to innovation and to constantly responding to changes in the market, a culture of innovation will never take hold. This doesn’t mean you must have a ping-pong table in the employee lounge. It requires hard work and commitment to allow a culture that encourages people to take risks. Or creating an environment where it’s okay to fail.
In fact, millennials agree: almost 60 per cent of them believe organisations can become good at innovation by following established processes and that innovation can be learned and is repeatable, rather than being spontaneous and random.
If your business can take those first two steps to spur that virtuous cycle, it will lead you to the final step: attracting and retaining the right talent. And this only starts by recognising the importance of talent to innovation.
Gary Coleman is Managing Director, Global Industries, of Deloitte Global. He is a member of Deloitte’s Global Markets Committee and leads its strategic relationship with the World Economic Forum. Follow him on Twitter @gcoleman_gary
This article was first published in the August 2014 issue of Acuity magazine.