Can innovation help retain talented employees?
You are about to present an idea. Your career success hinges on its acceptance. But what if you fail? What if your idea gets shot to pieces by your managers or ends up a victim of corporate politics? Should you take the risk?
Let’s face it, many of us at some point in our career have found ourselves in this situation. The risk-reward – or the reward you get for taking a risk – doesn’t seem worth it. It’s better to just keep on safely earning a monthly salary that’s nice and secure and doesn’t put you at risk.
Companies like this struggle to innovate
From a management perspective, this is disastrous. If employees find speaking up too intimidating, the decisions that management teams make become severely limited. They lack the full set of information that allows them to make effective decisions. Their perspective of the company’s operations, it’s strength, weakness and competitive threats areis weakened.
From a management perspective, this is disastrous. If employees find speaking up too intimidating, the decisions that management teams make become severely limited. They lack the full set of information that allows them to make effective decisions. Their perspective of the company’s operations, it’s strength, weakness and competitive threats areis weakened.
&It's also incredibly bad for human resources. Dynamic forward-thinking employees are unlikely to stick around, especially if they feel their career prospects are limited because they cannot shine. Those employees that do stick around, are those more focused on earning a steady salary and are more comfortable playing a passive role in the company. These aren’t the type of employees likely to drive innovation.
Worse still, attracting new talent becomes difficult. And, when talent does enter the company, it doesn’t stick around. Turnover is high, and the company’s reputation as an employer deteriorates.
The empirical evidence shows that fear hinders innovation
According to a study carried out by the McKinsey Institute, 85 per cent of executives interviewed reported that “fear holds back innovation efforts often or always in their organisation”.1
Overall, their research concluded that fear was the biggest factor that held back innovation: fear of criticism, fear of uncertainty, and fear of a negative impact on a career.
Companies that successfully countered this problem explicitly made innovation a key requirement for professional success. They incentivised risk-taking and accepted that failure is a part of success. Creating a culture that actively encouraged employees to experiment was important. Echoing Thomas Edison’s words on the invention of the lightbulb, “I have not failed. I have just found 10,000 ways that won’t work”. It is accepting these types of risk-taking that can help innovation thrive in a company.
How innovation attracts and retains talented employees
In the US, a survey carried out by Accenture found that just 19 per cent of college graduates wanted to work for a large company. By contrast, 44 per cent of the survey correspondents stated that they would prefer to work for a start-up or smaller company.2
This is important because by 2025 millennials are expected to make up 75% of the workforce, not mention the newly emerging Gen-Z category. In this study, the consensus was that big companies are too slow and boring. They were considered less committed to their employees, especially when it comes to investing in their interests, talents and ability to innovate.
This perception isn’t limited to the younger workforce either – it also affects mid-career workers. According to this same study, 47 per cent of Gen X workers (the cohort preceding millennials) and 42 per cent of millennials themselves, stated that they would not leave their current job for more money, but rather for a more innovative environment.
Therefore, innovation is not just about technology, it’s about people. Similarly, you cannot force employees to be more innovative through grand initiatives and top-down management decisions.
Companies that are serious about innovation need to embrace diversity and inclusion. This can only be led from the bottom-up. Innovation is not limited by gender, ethnicity, culture or social-economic background. It cannot be achieved with putting all the eggs in one basket. Diversifying will boost the innovation dividend within a company and remain sustainable over the long run if done properly.
Innovative companies offer more than just a salary. They offer a chance to be part of the success of a company. They provide opportunities to learn and gain experience from these innovative developments. They also create a powerful sense of ownership among employees, which creates a sense of pride.
To summarise, innovation is a powerful gravitational force. It pulls in the right talent into a company and keeps them there happy and motivated, allowing a company to grow exponentially over time.
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