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

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.

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.