How to and how not to innovate in HR

In my recent post I have made the case for innovation in HR. I believe that there is not much to argue about – other than of course discussing and aligning the conflicting investment wishes of all the different functions within a company. Therefore, the case alone is insufficient. Also the how and how not to is important to get the funds needed to finance any innovation. It needs to be clear what the ROI is.
Many organisations and especially HR functions have become much better in ROI and business case calculations – however, they are most of the time only seeing half of the game. Most HR business cases focus on the HR function only or are FTE and cost focused: How much costs can we save? How many FTEs can we ramp down? – As I have laid out earlier in one of my posts, the real business case and the real ROI of HR is not in that case. It is the wider workforce and organization effectiveness case. HR and HR’s costs are only a very small percentage of the costs and size of the whole organization – there is mostly not much to gain from anymore after years and years of downsizing and efficiency measures. The real case, the real size of the prize can be gained in HR’s original playing field: the wider workforce. This is what HR needs to claim, to influence and to calculate!  And this is in turn where the innovation needs to go. All innovation needs to have workforce effectiveness or efficiency in mind. Nothing else.
But stop here – how can this be measured, how can HR focus on that? – well, in order to be in such a position, a few house cleaning activities have to be executed. Of course all back-office processes have to run smooth and efficient. No one will listen to HR if they have their own house not in order. So the minimum entry fee is having payroll and personnel data administration in order. But that by itself is not yet sufficient – the infrastructure to innovate needs to be ready, too. A state-of-the-art HR technology (and on purpose I write HR tech as this is so much more than just your latest workday or success factors) which enables self-services, analytics, shared services, etc. is the necessary backbone needed. HR needs to be enabled before it can innovate – and is able to measure on innovation.
One of the issues I see though in today’s HR is the focus and dependence of HR on technology. In my previous post I have discussed the lack of innovation in both HR research and practice – probably some of the readers have thought “wait, what about all that new tech?” – and I will answer “Yes, there is a lot of innovation going on in HR tech”. But, the question is what is this about and what does it enable? And does it really have a positive ROI? The focus today more than ever is on HR tech for innovation – but I am not sure if this can be called innovation. If you have a look at a sample definition of innovation (check here or here), innovation is not only about “something new” or “technology”, but it is about “combining new ideas, processes or technology to create new value”. And this is what we have to do, where the focus should be. What is it, that new technology can be used for? Where is the workforce impact of new technology – the positive one of course!
Technology is not innovation or a case by itself – it should always be not more than an enabler. So implementing new technology is not what I call innovation. The combination of technology, process and new ideas is what brings innovation, what brings (monetary) value.