Business

There was a wonderful piece in the satirical news site The Onion recently about the recent SXSW conference in the USA. The piece claimed that the word “innovation” had already been said 650,000 times, and drily noted the complete absence of phrases such as “investment model” and “practical business strategy“. When people think of innovation, they think of inventions such as the iPhone, or high-tech startups in Silicon Valley. This aura surrounding the concept of innovation, particularly the idea that it means doing something unique or radical, had led some recruiters that I know of to believe that innovation is impossible in recruitment. However, this certainly isn’t the case! By applying critical analysis to innovation management, I will show how agencies can become innovative.

What Innovation to Pursue:

Despite their prominence, radical innovations are very rare. Innovation is simply change that occurs on a spectrum, from fine-tuning through to derivatives, enhancements, hybrids, next-generation and finally unique/radical. Most innovation is incremental – typically small, ongoing changes to how things are done. Radical innovation is typically linked to extensive R&D expenditure; as that is impossible for many recruitment agencies, focus should be on making incremental improvements. For example, one recruitment firm I know required their Terms of Business to be signed before they can work on a new client’s roles. As they used to be faxed or scanned and emailed back, this caused delays, with a typical turnaround of several days. An employee suggested they implement an e-signature system, and now the majority of their ToB are signed and returned on the same day, eliminating waste. This was a simple process enhancement, which made a big improvement.

Who Should Lead Innovation:

The classical approach to change strategies was that innovation and change had to be carefully planned and managed by senior management. Today, many authors believe that most change efforts are led by the employees themselves in a bottom-up process. As a result, management should act as facilitators to the innovation process. Management needs to be open and receptive to employee ideas and encourage them to look at how they do their jobs, and identify areas for improvement. Voice systems need to be put in place to allow ideas to be heard.

How to Do Innovation:

Incremental innovation happens through empowering employees to be entrepreneurs at their job level – intrapreneurs. Employees should be given a clear brief on what their job’s responsibilities are, and encouraged to take ownership of those areas of responsibility. Empowerment means encouraging and allowing people to take action: if an employee has a good idea, they should do it. If they can’t, then the team should do it. If the team can’t do it, but someone else in the company can, then that person should do it. If it still can’t be done, then it is either a people or resource issue – this is when management needs to be involved as it will probably require strategic change. At an agency I know, an employee was put in charge of the company’s social media accounts. These had been poorly managed and showed few results. He investigated some free social media management tools, and asked his boss to send him on a training day to learn how to use them better. Their social media accounts now get far more reach and often bring in good candidates.

When to Do Innovation:

An innovative culture is about encouraging continuous improvement – this is often called Kaizen. Incremental innovation doesn’t stop; the internal and external environment keeps changing. In its most basic form, Kaizen can be broken down to four steps: identify an area for improvement, implement the change, analyse the change, and do it again.The final step is crucial to successful implementation of Kaizen: many people have low tolerance for change and after making a change, fail to continue to monitor and act when new inefficiencies are found. For example, most recruiters use LinkedIn, and this led to a large change in working processes. However, LinkedIn’s functionality has evolved over time, and features which were available free are now only available on premium accounts. As a result, agencies that have paid for premium accounts tend to enjoy better results on LinkedIn than those who only have free accounts. There is clear scope for improvement here, but many agencies are blinded by history: LinkedIn worked for them in the past, so they fail to acknowledge the need for further change.

Where to Do Innovation:

One of the greatest risks of innovation is change for change’s sake. Change can go wrong, particularly if the change isn’t well suited to the business. Innovation needs to be targeted, which requires detailed analysis of the business. It may seem an obvious point, but any strategic choice involves trade-offs. What is your business model? Contingency, RPO, contract-only, permanent-only? Choosing to be a contract-only agency, for example, will limit future options and set the context for ongoing change. What are your processes? Does your company scale through human growth, or technological growth? These (and many more) are the questions to ask. Once you have a strong understanding of your company, you can plan where best to focus your efforts. An agency I know is led by an ex-software developer, and as a result they choose to focus their innovation efforts on building bespoke tools to automate and improve candidate searches. Whilst incremental innovation is typically employee-driven, senior management can help by creating guiding strategies to focus innovative efforts where they will have the best effect.

Conclusions

The purpose of this post is to consider how established, small-to-medium agencies can make innovation play a key role in their businesses. A guiding framework to do this can be summed up as follows:

  1. Acknowledge that incremental innovation is very achievable
  2. Managers become facilitators of incremental changes
  3. Create a culture of empowered intrapreneurship
  4. Establish continuous improvement as a guiding philosophy
  5. Guide efforts to where they will have best effect.

However, despite what gurus and consultancies claim, there is no one best way to change. Every company is unique, with different people, processes, histories and cultures. Using the guiding framework above can help agencies bring innovation into their culture, but how to do it is entirely contextual – there is no silver bullet to change, and it requires commitment, hard work, introspection, and dedication.


About Andrew Fairley

Andrew Fairley has recently completed an MA in Management with The York Management School, focusing on strategy, innovation, HR, and organisational behaviour, and has just begun a PhD investigating the UK internet startup industry. Prior to this, he spent 2 years as a Recruitment Consultant, working with clients from SMEs to blue-chips, sourcing IT staff.  You can find him on Twitter or LinkedIn.

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