Businesses do not innovate, it's people who do

THE Singapore government's Budget announcement in favour of innovation and growth is necessary, but not a sufficient condition to drive business innovation.

Since the Budget was handed down on March 24, much has been said in favour of the government's effort to incentivise and make businesses not only productive but also innovative and internationalised. The Industry Transformation policy plank which stresses technology-driven innovation is a step in the right direction, no doubt, but is it still missing one key ingredient - motivation for people to innovate?

For long, in some cases too long, we hear or know of people who spend large chunks of time 'in' the business rather than 'on' the business - no matter whether it's a large multinational bank or a SME (small and medium-sized enterprise) in the manufacturing sector. Indeed, the findings that emerged from a Spring-funded study where we analysed practices of 215 SMEs in the manufacturing sector are telling.

About 70 per cent of SME leaders say that their employees have little or no discretion when it comes to facilitating innovation and only 19 per cent of the SME leaders are embracing of risk and can tolerate failure. And, if Singapore is to drive innovation through technology adoption, then more needs to be done to grow the rather low proportion (17 per cent) of SME leaders who assess new technology solutions. Of these, only 34 per cent say they undertake this exercise annually.

Just as the government has over the years created new incentives for businesses to change tact from productivity to innovation, so must businesses make the time and space for its people to innovate. Never mind the rhetoric on innovation, what needs to be understood and acknowledged is that businesses do not innovate, it is people who do. So how best might businesses go about it?

There are three simple ways to chart this pathway.

MAKE TIME FOR INNOVATION!

We are all too familiar with the 50-60 hours per week syndrome. Recent research shows that the relationship between hours worked and output produced is linear only up to a point - 48 hours to be precise. Above this threshold, output rises at a decreasing rate.

While this research finding may be specific to parts of the manufacturing sector, a similar OECD (Organisation for Economic Co-operation and Development) study suggests that this threshold point can be much lesser in the services sector where self-direction and intellectual engagement are required. One recent article in the Harvard Business Review argued that overwork results in progressively working on tasks that are less meaningful and value-diminishing.

Two things become evident here as far as future work practices are concerned. One, managers need to focus on achieving outcomes and not just driving input-outputs. Two, people need to think about ways in which they can be just as productive in 45 hours as they would be in 50 hours. For doing so, people need to be rewarded and incentivised with an optimal approach to work-life balance.

Adopting this approach creates the much needed time and space to think about innovation. Some may choose to pursue this as a 20-minute team chat a few times a week while others may choose to use individual reflection as a means of thinking about the "why" and the "how". Just how exactly the company goes about it does not matter as long as the specific purpose is to think-and-do innovation.

CREATE AN ENABLING WORK CULTURE

For too long, businesses have rewarded and penalised based on individual performance. Some will argue that people in organisations need to be in sync just like the cogs in a wheel that operate a machine. People are emotional beings and to be in sync requires collective thinking and action.

An enabling work culture is where people can see that their contribution is one part of a multi-step project and think holistically about the other components involved. Doing so will support the next person or team's tasks. To achieve this work culture, businesses need to transition from rewarding individuals to team-based performance management.

GET READY TO UNLEARN

Achieving results from these two workplace strategies requires one more important attribute - the ability for people to unlearn and relearn. From a very young age, all through education our minds and ways of doing have been conditioned. We see this even today where institutions are busy preparing throngs of individuals for "jobs" (which we don't know what they will look like in a decade or more) rather than graduating individuals who are "creator of jobs".

This is no different from our work experiences and how our minds have become conditioned to organisations. Such conditioning extends to following set work patterns such as hierarchical work structures, practising control-oriented organisational cultures, a "boss-knows-best" mindset, and so on.

To be able to innovate for the business, people need to start to challenge their existing thinking patterns and become capable of unlearning so that they can make space for innovation and relearn. Never mind the technology era, it is increasingly becoming evident across the world that it is the people software that is needed to drive the hardware of business productivity, innovation and growth.