Organizational innovation, people management and sustained performance: towards a multi-level framework for medium-sized businesses

Lead Research Organisation: Aston University
Department Name: Aston Business School

Abstract

The question of how best to achieve sustained organizational performance is of national and international economic significance. Indeed, it has been predicted that the UK's export market is likely to fall during the next two decades as developing nations increasingly catch up and potentially overtake the UK (The Times, 12th October 2011). Organizations that embrace innovation rather than remaining entrenched in long-standing ways of working are likely to diminish or even reverse trends in this direction; however, although there is a lot of research focused on the technical aspects of innovation, rather less attention has been devoted to understanding the people management implications that this way of working presents (OECD, 2010; Sparrow, 2010). In this respect, it has been argued that medium-sized businesses (MSBs) are more neglected than either their smaller counterparts or multi-nationals which tend to command the attention of policy bodies. This is despite the potential that this sector presents for revitalizing the UK economy. The suggestion is that renewal in the MSB sector-driven by in part by innovation, in part by recognizing and championing MSB needs- might yield a GDP of between £20 and £50 billion by 2020 (CBI, 2011).
Reflecting the significance of this challenge, our seminar series proposes a multi-level framework to explore the role of people management in shaping organizational innovation. Responding to recent calls in this direction (CBI, 2011), our focus is MSBs although we envisage that our work will have wide applicability across the business sector. Our proposal is original in that it adopts a multi-level perspective, suggesting that factoring in change at one level without taking into account any wider impact might lead to to outcomes that are unexpected or even harmful (OECD, 2010). We draw on leading scholars whose work is suggestive of this multi-level perspective.
To this end, we propose five sessions. Drawing on knowledge-based theory (Kogut & Zander, 1992; Nahapiet & Ghoshal, 1999), the first two seminars take an organizational-level perspective and explore any potential implications for HRM in setting out the strategic agenda and building the systems needed to capture and exchange knowledge. The first session highlights the internal dynamics involved and explores cross-level implications, while the second examines external linkages in terms of their applicability for HR. For example, the traditional use of outsourcing and strategic alliances as well as other cross-organisational collaborations such as joint R&D and product development,knowledge sharing and inter-firm networks all create significant challenges for those with responsibility for HRM. The final two seminars focus primarily on employees but at the same time assess the significance of factors in the wider context that give rise to creative expression, culminating in organizational innovation. We explore the role of apprenticeships and work-based learning as necessary antecedents and then in the final session turn our attention to the question of individual creativity, asking about the contribution of creativity training and work-place related factors such as decentralisation and participation in organizational decision-making. In doing so, we promote the cross-fertilization of ideas across academic literatures that have largely evolved in tandem and aim to build a preliminary framework to guide practitioners about the design of organizational systems to foster innovation. We speak to early career researchers as well as students and contribute to the scholarly community with achievable plans for several high impact publications as well as an edited book arising from the series.

Planned Impact

The main impact of the seminar series will be on MSBs where it has been identified that there is scope for increasing GDP by between £20 and 50 million over the next decade or so if the sector can be revitalized and more innovation incorporated into the day-to-day functioning of these organizations (CBI, 2011). The MSB sector will be impacted by this research in that the latest thinking is brought to bear on the connection between people management and innovation given the specific demands and challenges that they face, as articulated in the (2011) CBI report: 'Future Champions: Unlocking Growth in the UK's MSBs.' By bringing to the fore best practice together with the latest theoretical ideas, we envisage that we will be able to offer concrete guidance to MSBs about considerations to take into account in order to achieve innovation 'from the bottom up'
We also envisage an impact on organizations outside the MSB sector who are seeking to be more innovative in response to competitive demands. Smaller companies might gain pertinent insights- for example, about how to foster renewal by drawing on external networks, and any implications that doing so presents for employee skills. Large companies might equally gain a deeper understanding about the multi-level dynamics involved in fostering innovation across employee groups. Effective knowledge exchange, for example, needs to be supported by the implementation of appropriate reward and performance management systems. Employees can be creative to the extent that they exhibit 'domain specific' (Amabile et al., 1996) skills, similar to those acquired through modern apprenticeship or other workplace focused schemes. In sum, organizations interested in designing or re-designing their HR systems in order to precipitate innovation will gain inspiration from the seminar series about implementing practices in a holistic rather than a piecemeal way, and more insight about what options exist to achieve the organizational outcomes that are required. In seeking to achieve these impacts, our thinking is that synergies often arise across disciplinary boundaries, where related fields have evolved in tandem, offering fruitful and potentially unexpected insights that we envisage will emerge as the seminar series proceeds.
We suggest that the seminar series will influence policy makers, in several respects. The Conferation of British Industry has suggested that with more attention the MSB sector might play a pivotal role in fueling the UK's economic renaisance against a backdrop of a uncertainty and competitive threat (CBI, 2011). The CIPD has a remit to foster effective people management as a means of enhancing organizational performance, and is increaingly interested in understanding more about the way in which HRM might influence organizational innovation. We see our work as impacting on this professional body. The Department of Business, Innovation and Skills has also made clear its commitment to renewal and growth as a means of dealing with recessionary pressures. Even the OECD (2009) has made central in its manifesto an imperative to support companies in their quest to be innovative. This seminar series speaks to these various policy bodies, offering a focus for leading scholars to explore an under-researched theme and to build a framework that sets out a way forward.

Publications

10 25 50
 
Description This was a seminar series intended to promote the cross-fertilization of ideas across academic literatures such as strategic HRM, knowledge exchange, workplace learning and creativity, that have largely involved in tandem.
Our central question was to explore the way in which effective people management might elicit organizational innovation. this was achieved by:
a. bringing these literatures into a single discussion forum
b. actively searching for synergies across the five sessions
c. encouraging leading scholars as well as junior faculty to look across levels their work.
Compare and contrasting literatures concerned with people management and innovation that a. take an
organizational-level perspective and b. focus primarily on the individual -in order to foster understanding about how
employers might make the best use of people's skills for innovation and any role that managerial practices, learning
cultures and formal or informal education might play.

One finding is that in the UK innovation is seen to flow from scientific experts positioned in discrete areas of the business such as Research & Development. Our research posits an alternative position: that innovation is rather a continuous, multi-level process, involving the application and re-application of existing as well as new scientific knowledge. Innovation occurs across employees at all levels of the business (Gupta et al., 2007). Organizational contexts as well as the wider environment exert influence upon the innovation displayed by individuals and teams. Specifically, findings were as follows:
1. that contexts building employee motivation may be more important for innovation than those fostering capability and skills
2. that, for innovation, apprenticeship training needs to focus on contracting and collaboration rather than functional separation
3. that popular leadership theories such as transformational leadership may inhibit or enable innovation, depending on whether there is an orientation towards knowledge-sharing and collaboration.
4. A clear demand for positioning the debate within an international frame of reference. Innovating through people on a global stage opens new markets, which in turn increases the potential for growth in domestic economies (BIS, 2012) yet presents particular demands for the people involved, which are not well understood. A team of scholars linked with the seminar series are now examining global factors that might influence HRM- Innovation relationships.
Exploitation Route The PI. Helen Shipton, was offered and accepted a Professorship at Nottingham Business School in July 2013. This has opened up further opportunities for taking the findings forward. Nottingham Business School has strong links with executive communities through its executive education activities ( Shipton is Head of Doctoral Studies). The Doctorate of Business Administration is one of the largest programmes of its kind, with 150 plus students.
The other institutions involved in the bid also have extensive networks increasingly utilized insights via the Series. The Centre for Performance-Led HR at Lancaster, through Paul Sparrow, has an international reputation for practically-relevant research and links with a wide group of globally renowned organizations. Bath School of Management, whilst not a partner, became closely involved in the Series through Juani Swart and Yvonne Van Rossenberg and is also one of the leading institutions in the UK for the quality of its research and its commitment to practitioner engagement. Aston University has for several years been at the top or thereabouts of league tables measuring graduate employability, and has an extensive undergraduate business placement scheme that is being be tapped into for the series via Co-I, Pawan Budhwar.
Sectors Aerospace, Defence and Marine,Communities and Social Services/Policy,Financial Services, and Management Consultancy,Healthcare,Manufacturing, including Industrial Biotechology,Retail

 
Description This award has led to impacts on non-academic groups by offering insights to contribute to global economic performance, in particular, to enhance the economic competitiveness of the United Kingdom. This has been achieved in a number of different ways, as follows: 1. Seminar Series Leaders. As senior academics, the four scholars leading this bid have drawn on the findings of this award in their engagement with the practitioner groups, which comes about through their teaching and executive development activity, focused on senior and aspiring managers in business and public sector organisations, and through their leadership of respective Research Centres. Helen Shipton directs the NBS Centre of People, Innovation and Performance, which communicates insights from HR-related research, drawing heavily on findings that have come about through this seminar series. Paul Sparrow, regularly voted amongst the top ten most influential HR experts in the UK, leads the Centre of Performance-Led HR, and is joint editor with Cary Cooper of the Journal of Management Effectiveness, both of which deal with and help address key challenges facing businesses in the UK and beyond, many of which can be understood through insights generated in the seminars. Pawan Budhwar, as Director of the Aston India Foundation for Applied Research, has been able to draw on insights especially those relating to leadership, learning and training and innovation, not just through his executive development activities in the UK but also through his engagement with senior business leaders in India and elsewhere, to shed light on ways of fostering global economic performance. Alan Brown similarly has a key role through his membership of the Institute of Employment Studies at Warwick University in shaping the practitioner insight and understanding around the themes of the seminar series. 2. Seminar series contributors. Scholars participating in the seminars were drawn from many different countries and represented differing levels of seniority in their respective institutions. Each contributor was touched by insights arising from the seminars, in ways captured in the particular chapter in the edited book arising from the series, articulate in their chapters how the seminars informed their engagement with business practitioners. For example, colleagues from Slovenia/ Norway developed a clearer understanding of the people-related challenges of implementing creative ideas, and developed a new model for developing leaders that reflects the challenge of this part of the innovation process (also leading to a new edited book ' Skerlavaj, M., Dysvic, A. & Matej, S. (Eds.). 'Capitalizing on Creativity at Work: Fostering the Implementation of Creative Ideas in Organizations'. London, Edward Elgar Publishing. 3. Direct engagement of practitioners in the ideas. Several new frameworks have been developed to assist practitioners in order to promote economic effectiveness and competitiveness. For example, the PI, Helen Shipton, has developed, alongside one of the series administrators, ex-PhD student, now lecturer, Margarita Nyfoudi, a framework for measuring the effectiveness of competency development and progression within a public sector organization concerned to attract disadvantaged groups to pursue further study at university. Part-time HR students have participated in a research study arising from findings from the series that diagnoses the feelings of employees about work and develops practices to address potential obstacles holding back performance and well-being. This project has now been extended and taken forward by a major international company (boiler manufacturers) with whom we are closely collaboratoring. Furthermore, as a result of the seminar series I (the PI) have been invited to join networking groups which are continuing to push forward understanding of how organizations foster innovation and what role people management plans. Recent activities have involved setting up a data set in collaboration with colleagues within UK and Vietnam, where we focus on HRM attribution. My collaborative team have also been successful winning a British Academy small grant focused on HRM and innovation within a Chinese context (PI Veronica Lin) These are just a few from many examples of the direct effect of the seminar series on the stakeholders whose needs it was designed to address.
First Year Of Impact 2013
Sector Communities and Social Services/Policy,Construction,Education,Healthcare,Other
Impact Types Economic

 
Description Coaching for Creativity Approach
Geographic Reach National 
Policy Influence Type Influenced training of practitioners or researchers
Impact An analysis of the workplace culture for innovation. Defining of creativity needs of employees and managerial coaching skills.
 
Description Coaching for Creativity Approach
Geographic Reach National 
Policy Influence Type Influenced training of practitioners or researchers
Impact Employees exhibiting more innovation and higher performance as a result of the application of our research
 
Description Small Research Grants
Amount £9,870 (GBP)
Funding ID SG171397 
Organisation The British Academy 
Sector Academic/University
Country United Kingdom
Start 01/2018 
 
Title Global survey: HRM, innovation and performance 
Description We have data from 2700 employees and managers from 57 organizations located in ten countries. The data captures employee perceptions of HRM, their attitudes (e.g. engagement) and several performance outcomes at individual and organizational levels. 
Type Of Material Database/Collection of data 
Provided To Others? No  
Impact We have just merged the dataset and envisage a series of publications going forward. 
 
Description Employee Voice 
Organisation Chartered Institute of Personnel and Development (CIPD)
Country United Kingdom 
Sector Private 
PI Contribution We have crafted a research proposal currently under review by the CIPD
Collaborator Contribution (Potentially) funding and data access
Impact Currently we are in advanced discussion with the CIPD about leading on a project entitled 'employee voice'. The project is directly related to the theme of the seminar series, which investigated ways in which organizations can foster innovation 'from the bottom up.' It raises the prospect of a vibrant theme of research further taking this theme forward.
Start Year 2018
 
Description Examining HRM and innovation/ performance relationships: A cross national study 
Organisation University of New South Wales
Country Australia 
Sector Academic/University 
PI Contribution Together with the above team and other collaborators we created a new data set based on surveys distributed to our networks across ten countries. The surveys addressed themes raised within the seminar series, concerning how HRM practices are enacted and perceived especially in different national contexts. This has led to a merged dataset, 10 countries, 57 organizations and 2704 respondents.
Collaborator Contribution The partner outlined above helped in the design and administering of the survey. The PI (Shipton) worked closely with the above partner (Shipton) who is now a Visiting Professor at Nottingham Business School, Nottingham Trent University.
Impact The above data set, which has formed the basis of a growing number of papers/ research bid, including a symposium presented at BAM, Belfast, September 2013.
Start Year 2013
 
Description Growth through innovation: Aligning Human Capital Management and Growth Tipping Points 
Organisation Aarhus University
Country Denmark 
Sector Academic/University 
PI Contribution This is a research bid led by Frances Jorgenssen from Aarhus University, Denmark, with Co-Is Helen Shipton from Nottingham Trent University, UK, James Hayton from Warwick Business School, UK and Juani Swart from Bath Management School, UK. It is focused on high-growth enterprises (HGEs) and building the human capital needed to fuel their positive trajectories In the bid, we apply a mixed-methods research design to investigate how knowledge-intensive HGEs in the service sector align Human Capital Management (HCM) with growth tipping points to ensure the innovative behaviours needed for continued growth. The project builds on the participants? previous and ongoing research linking people management and innovative behaviour to construct a multilevel model of HCM in HGEs with implications for managerial practice in Denmark and development of human capital theory.
Start Year 2012
 
Description HRM attribution: line managers, uncertainty avoidance and situational strength 
Organisation Queen's University Belfast
Country United Kingdom 
Sector Academic/University 
PI Contribution I have brought my knowledge of HRM and innovation, and focus on employee perceptions of HRM, to the research team in order to design a project that will move forward knowledge. Specifically, this entails shedding light on the role of line manager HR attributions in shaping the attitudes and behaviours of direct reports. Although the intermediary role of the line manager in the HR causal chain has been recognized for some time (Purcell & Hutchinson, 2007) we still lack understanding about how line manager HR attributions might influence employees' reactions and behaviours. Furthermore, it is not clear what effect line manager HR attributions might have, through shaping employee HR attributions, on a variety of outcomes including innovative behaviours, nor any potential boundary conditions.
Collaborator Contribution The partners have brought their networks, especially their connections within Vietnam, to allow the data collection to take place. The partners have also brought their in-depth knowledge of statistical analysis in order to process the data and help provide support for the theoretical model proposed above.
Impact A data set based on knowledge workers located in Vietnam, focused on lline manager HRM attributions and employee innovative behaviour. the data set comprises 366 individuals, nested in 99 teams.
Start Year 2017
 
Description HRM attribution: line managers, uncertainty avoidance and situational strength 
Organisation Ton Duc Thang University
Country Viet Nam 
Sector Academic/University 
PI Contribution I have brought my knowledge of HRM and innovation, and focus on employee perceptions of HRM, to the research team in order to design a project that will move forward knowledge. Specifically, this entails shedding light on the role of line manager HR attributions in shaping the attitudes and behaviours of direct reports. Although the intermediary role of the line manager in the HR causal chain has been recognized for some time (Purcell & Hutchinson, 2007) we still lack understanding about how line manager HR attributions might influence employees' reactions and behaviours. Furthermore, it is not clear what effect line manager HR attributions might have, through shaping employee HR attributions, on a variety of outcomes including innovative behaviours, nor any potential boundary conditions.
Collaborator Contribution The partners have brought their networks, especially their connections within Vietnam, to allow the data collection to take place. The partners have also brought their in-depth knowledge of statistical analysis in order to process the data and help provide support for the theoretical model proposed above.
Impact A data set based on knowledge workers located in Vietnam, focused on lline manager HRM attributions and employee innovative behaviour. the data set comprises 366 individuals, nested in 99 teams.
Start Year 2017
 
Description Deploying HRM to elicit innovation 
Form Of Engagement Activity A talk or presentation
Part Of Official Scheme? No
Geographic Reach National
Primary Audience Professional Practitioners
Results and Impact Presentation led to participants reflecting on possible opportunities and constraints in terms of their own practice for enhancing HRM for innovation.

After the talk participants could describe the importance of taking a multi-level perspective in understanding the role of HRM in prompting innovation and performance.
Year(s) Of Engagement Activity 2014
 
Description Speaker 'Innovating Works and Scottish Centre for Employment Research, Strathclyde Business School. 
Form Of Engagement Activity A formal working group, expert panel or dialogue
Part Of Official Scheme? No
Geographic Reach International
Primary Audience Industry/Business
Results and Impact This talk was to explore extant knowledge around barriers and enablers for innovation in the workplace and to discuss ways in which top-down interventions might suppress, rather than elicit, employee innovation. There were many questions afterwards and follow-up has presented the opportunity for collaboration especially in the area of future grant submissions.
Year(s) Of Engagement Activity 2016
 
Description Speaker, KnowledgeBrief, London 
Form Of Engagement Activity A formal working group, expert panel or dialogue
Part Of Official Scheme? No
Geographic Reach National
Primary Audience Industry/Business
Results and Impact I presented outcomes of my research arising from the seminar series in order to cast new light on how organizations might achieve innovation through people. Entitled 'Innovation from the bottom up' the research examined how organisations might elicit employee-led innovation and some barriers and opportunities for further leveraging this way of working in order to foster a more vibrant and ultimately more successful organization.
Year(s) Of Engagement Activity 2016