Innovation has become a major focus for the Australian economy. The downturn in the mining sector has left the country searching for new growth areas while the change in Prime Ministers has seen a renewed focus on becoming a more innovative country.

For every department in an organisation, the challenge is now to focus on innovation and invest resources into finding better ways to operate. For HR, becoming more innovative means investing more into different services that can further improve operations.

The new innovation agenda

Since entering office as Prime Minister, Malcolm Turnbull has placed innovation high on the political agenda, a move that has been reflected in the release of the National Innovation and Science Agenda. This post provides a blueprint for reforms and funding changes that aims to unlock greater innovation in both the public and private sectors.

Part of the reason for this move is a current lack of innovation among Australian businesses. The federal government found that only 6 per cent of Australian businesses are engaging in innovative activities, compared to an average throughout the OECD of 16 per cent. Addressing this gap is fundamental to ensuring Australian companies remain competitive internationally.

Among the biggest changes has been the introduction of new funding from the federal government to encourage innovation. A total of $1.1 billion will be invested into startups and the STEM sector (Science, Technology, Engineering and Mathematics).

Further changes include the introduction of new rules around federal procurement. Now, agencies will need to become leaders in digital transformation and also prioritise Australian businesses during the procurement process.

Another of the major changes involves technology – specifically recognising the increasing role that data analytics will play in the success of the Australian economy. The federal government cited the “Data Revolution” that will take place over the coming 20 years as the main reason for companies to invest in new systems.

How can HR become more innovative?

Innovation isn’t limited solely to a research and development (R&D) department; it requires buy-in from across an organisation. HR departments are ultimately responsible for developing the innovative capacity of an organisation, which is why they have to lead this drive to become more creative.

Here are the four ways HR can play the largest role in developing the innovative potential of an organisation:

1. Talent management and leadership development

Finding, developing and rewarding high-performing staff members is one of the biggest factors that will affect the development of a more innovative organisation. Emerging leaders and senior staff need to understand the value of innovation and be willing to take calculated risks on new products, services or internal processes.

The core goal is to make sure that those in senior positions have a mindset where they want to challenge the status quo in their industry, team or area of responsibility. Nurturing this state of mind through talent management is the only way to ensure leaders are thinking about innovation at a granular level.

2. Culture

While building this state of mind among managers and leaders is important, there is a broader culture shift that needs to occur in order to become an innovative organisation. In a report on innovation and HR, KPMG identified the following areas where organisational culture can support innovation:

‰Ñ      Creating an environment where trying new ideas, even if they fail, is encouraged.

‰Ñ      Building a culture where there are diverse opinions that can critically evaluate proposals.

‰Ñ      Expanding the responsibility for innovation so that all staff members contribute and are acknowledged for their efforts.

3. Communication

Among the core barriers to innovation is a lack of information sharing within the organisation that makes it harder for individuals to pursue ideas that can add value. Breaking down barriers between teams is essential for providing access to information that can drive an organisation forward.

Beyond allowing ideas to move between silos, it is equally important for the HR processes within each team to be designed in such a way that they encourage innovation.

4. Aligning HR with organisational goals

Lastly, if HR departments are going to take a leading role in the transformation towards an innovation-led organisation, they have to demonstrate the value that HR can bring to realising organisation-wide goals. For HR executives, having access to data and analysis that can demonstrate the connection between HR processes and a broader innovation strategy can build support for these processes.

Extending innovation to HR

Clearly, HR is an area that will play a major role in delivering the levels of innovation that organisations require to reach the goals set at the federal government. While the specific projects announced by the Turnbull government will play a role in making Australia more innovative, it will still fall on organisations to adopt these objectives internally.

For HR departments, making innovation central to their performance requires the right tools and analytics technology, along with a new mindset, in order to drive improvements in the organisation. Assembling these resources internally and coordinating with a broader company-wide innovation strategy isn’t difficult and will help HR departments to contribute to this new national focus on innovation.