Innovation in the workplace is a complex issue in which technological evolution—accelerated by the pandemic emergency and the obligation for social distancing—is intertwined with the need for a general reformulation of work culture.
In just two and a half years, workplaces have been radically redefined to include hybrid environments or fully remote modes of communication and collaboration. To be able to govern this change, companies needed to reorganize in order to ensure greater flexibility, agility, and mass adoption of tools and devices that, while already existing, were being used to their fullest functionality for the first time.
In this post, we will see how innovation in the workplace—which is a powerful lever of competitive advantage—depends on an organization’s ability to learn, develop, and make the most of all its resources. Of the various forms in which this innovation has taken place, working from anywhere/remote work, employee care, and talent management are probably the forms that have been most successful in expanding business performance and improving the quality of work life.
What exactly is workplace innovation?
“Workplace innovation” or “innovation in the workplace” is the set of organizational practices, based on objective data, that enable employees at all levels to use and develop their skills, knowledge, experience, and creativity to the fullest extent possible while simultaneously improving performance, engagement, and corporate well-being (Totterdill, P., Dhondt, S., Milsome, S., Partners at Work? A Report to Europe’s Social Partners and Policy Makers, European Commission, 2002).
COVID-19 forced profound changes in “office life:” hardware and software, in a very short period of time, were adapted to new contexts of use (e.g., private homes), and audio, video, and connectivity were the three elements on which companies pivoted to maintain operational and productive continuity. While the trends shaping innovation processes in the workplace have thus accelerated dramatically in the space of just a few years, much thought has already been devoted to the notion of “innovation in the workplace.”
Innovation in the workplace as a set of practices for corporate renewal
In 2015 in a survey by Eurofound (the European Foundation for the Improvement of Living and Working Conditions) managers, employees, and employee representatives were interviewed to gather information about their working conditions with the goal of exploring the paths, motivations, and achievements of their organizations.
Workplace innovation was described here as the practice or combination of practices that enable employees to participate in both structural (how work is organized) and cultural (in terms of staff empowerment, motivation, attitudes, etc. ) organizational renewal. Innovation, according to the study, served to achieve a number of important changes: from implementing new practices to intervening to change the culture or structure of the organization, from employee engagement to improving performance and corporate well being.
The research also highlighted how policies aimed at achieving innovation in the workplace did not follow a linear path toward a defined end but aimed to create innovative and self-sustaining development processes, drawing from diverse sources and experimentation that resulted in hybrid online and offline models.
Workplace innovation is a social process
Workplace innovation, the Eurofound report concluded, can never be reduced to static practices carried out in isolation. Instead, it has much to do with building skills and competencies through creative collaboration. It is therefore a deeply participatory, inherently social process.
Workplace innovation is fueled by dialog, knowledge sharing, experimentation, and learning. Stakeholders—employees, unions, managers and customers—are given a voice in creating new models of collaboration and new social relationships. Emphasis is placed on those practices that help increase the design capacity of activities and workflows that stimulate self-organized teamwork, provide structured opportunities for reflection, learning, and improvement, and encourage strategic decisions.
It is the convergence of improved performance and enhanced quality of work life that enables and fuels innovation in the workplace. As they align toward a common goal, namely increased business performance, employees contribute their knowledge and creativity, empower themselves, and receive trust and rewards in return. Innovation practices improve employee performance and conditions while providing employers with a high return on investment in training and technology.
The definitions we have provided so far tend to focus on the human aspect of interaction between people and the ability of the company to enhance the knowledge produced through collaborative behaviors. Let us now introduce the nexus between innovation in the workplace and technology to try to answer the following question: what, if any, is the contribution of technology, and digital technology in particular, to innovation in the workplace?
The relationship between innovation in the workplace and technology
According to the European Innovation Council and SMEs Executive Agency (EISMEA), workplace innovation would represent all non-technological innovations related to a business organization and its structure, including human resource management, employee engagement, management of internal processes and decision-making, design of organizational strategies, relationships with customers and suppliers, and the work environment. Emphasis is thus placed on the social and cultural construction of innovation.
However, the pandemic has caused such a violent impact on our daily lives that it has permanently altered the contextual logics by which we live, work and buy. Within a new, inevitable normalcy of work, technology has played an absolutely crucial role: it has enabled employees, in an exceptional historical moment, to communicate, collaborate, and innovate. And it will continue to integrate itself into the workforce, for one reason above all: because it positively affects the productivity levels and performance of individual workers and the company as a whole.
According to Statista, as digital transformation processes accelerate in companies around the world, the technologies most frequently adopted to create a sustainable and productive work environment are collaboration systems, which enable employees to communicate more effectively and share data without hindrance or loss of information. Overall, 96% of respondents (all of whom are responsible for employee performance) say these key technologies can offer huge productivity and security benefits.
In the face of the enormous number of innovative technologies currently available on the market, the challenge is to learn how to choose. To avoid becoming overwhelmed, decision makers must focus on identifying the core business and finding the specific tools that can actually help their employees work better.
There is not—if there ever was—a one-size-fits-all innovation formula for any workplace. Each company must identify the technology solutions best suited to the new normal and integrate them into its processes. Remote work, employee care, and talent management are three trends that, thanks to technological development, have enabled innovation in the workplace to be fully expressed in recent years.
In July 2022, as part of its sixth annual report, Owl Labs, in collaboration with Global Workplace Analytics (one of the most respected remote work consulting firms) surveyed more than 2,300 U.S. workers. The goal was to learn about their preferences and concerns regarding different modes of work: in-office, remote, and hybrid. According to the results, the number of workers who preferred remote solutions increased by 24% since 2021, while those who preferred hybrid work had grown by 16%. Interest in office-based work, on the other hand, had decreased by 24%.
According to Eurofound, remote work or telework is here to stay. In 2021, 41.7 million employees across the EU teleworked (the figure doubled from 2019). Despite a slight decline in 2022, this upward trend is set to resume, for two structural reasons:
- technology developments are increasing the number of occupations that allow remote work;
- employees and employers are more inclined toward different forms of telecommuting and digital collaboration.
Hybrid work and remote work
While the two terms are often confused with each other, hybrid work and remote work are two different models of remote work.
- Remote work is done anywhere outside the office. A fully remote workforce rarely, if ever, enters the physical workplace.
- Hybrid work is a compromise between remote work and office work, stationary and mobile. This model gives employees some autonomy over how and where they work. Hybrid work combines the flexibility of remote work with the collaborative culture of an office. Forrester, which first talked about “anywhere work,” predicts that hybrid work will make up about 53% of the remote-capable workforce in the next few years.
Remote work and hybrid work, if they arise out of agreement between company and employee, can contribute to the well-being of the individual worker and in this sense they are a way for the organization to extend and strengthen employee care activities.
The pandemic has shown that the office is by no means always necessary but that it represents only one of the possible places to work. Although virtual work is not perfect, it has enabled an unexpectedly high level of collaboration. Companies that are moving toward a “work from anywhere” model seem to have more satisfied and engaged employees. According to Forrester, on a 100-point scale, employees who can take advantage of hybrid work arrangements score +13 points in happiness, +7 points in engagement, and +10 points in the perception of their companies as innovative.
Innovation is a key aspect of any business strategy, crucial to achieving sustained success and maintaining a competitive advantage over competitors.
At the same time, innovation is a complex human process that is driven by technically skilled people. To support innovation, companies should create work environments that are perceived by employees as pleasant and low-stress, and where there are spaces, time, and tools dedicated to continuous learning and where active sharing of new knowledge and ideas is part of the corporate culture.
Corporate social responsibility (CSR), adherence to ESG criteria, and emphasis on developing corporate welfare are now an integral part of any organization’s mission. On the other hand, innovation cannot be achieved and practiced without long-term talent management strategies.
Taking responsible care of employees can increase their job satisfaction. At the same time, by strengthening their institutional image, companies are able to attract and retain talent. This is not a detail: people with the “right” skills, trained and motivated, will increasingly go on to be a critical factor in the corporate innovation process.
If a giant like Forrester has decided to redesign its talent acquisition flows, opening up to hybrid working and digital onboarding, it has done so because it is acutely aware of how 53% of workers now desire greater flexibility and the ability to work from home (and this half also likely includes bright, trained talent).
Here again, technology is an extraordinary enabler, both because HR analytics and big data are transforming the way companies make their talent management decisions, both because companies are increasingly accommodating their employees’ requests for professional development and training, and because digital business collaboration tools are now equipped with all the features needed to provide effective support for teamwork. In particular, there are three elements of innovation in the area of talent management that digital transformation make possible:
- Data-driven insights: by analyzing data on employee performance, engagement, and retention, companies can gain valuable insights to optimize their talent management strategies.
- Focus on continuous learning: as change processes accelerate, companies must be able to adapt quickly to new business needs and changing workforce demographics. They must experiment with new approaches that enable the development of continuous learning programs.
- Collaborative culture: to foster a culture of teamwork, companies must break down information silos, promote cross-functional collaboration, and create new opportunities (e.g., channels and virtual spaces) for sharing knowledge, skills and ideas.
Talent management cannot ignore innovation practices in the workplace. In this regard, digital technologies offer a huge contribution: they enable employees to make more accurate daily decisions because they are data-driven, to challenge entrenched customs by being able to rely on powerful and flexible alternatives, and to contribute new ideas (shared on digital and intranet channels) to the success of company projects.
The future of work involves the emergence of a true culture of innovation
As recent Google research shows, in competitive and dynamic business environments:
- an organization’s ability to innovate is an indicator of its long-term success;
- there is actually a positive correlation between innovation and an organization’s profitability.
Organizations that invest in workplace innovation are better able to adapt to technological evolution and environmental changes, and better able to withstand competitive pressures. In the face of this evidence, however, there are still many companies that demonstrate that they are unable or unwilling to take steps to nurture systemic processes for creating and integrating innovation in the workplace. What seems to be missing is an immediately understandable and widely shared way of participating in corporate knowledge (generated by decision makers, employees, stakeholders).
We need “joined-up intelligence,” writes Peter Totterdill in his article a few years ago, “Closing the Gap: The Fifth Element and Workplace Innovation,” which emphasized the importance of internally consistent policies and practices by which we can achieve outcomes for organizations and employees that are greater than those achievable by the simple sum of individual measures. The fifth element named in the title refers to an essential quality, the ability to provide the basic conditions for the creation of shared narratives that are able to give meaning to everyday work.
Rather than a system of mutually reinforcing practices, it will be the emergence of a culture of empowerment and innovation, at all levels of business, that will determine the future of work.