Rewarding Adaptability – Digital Freedom Challenge

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My idea (hack) for the Management Innovation Exchange, international  Digital Freedom Challenge has been shortlisted as a finalist.

It is called Rewarding Adaptability

The organizers said:

The Digital Freedom Challenge team evaluated contributions from innovators from around the world and from every kind of organization—looking for depth, boldness, originality, thoroughness, and the ability to inspire and instruct in equal measure. We certainly found those qualities in your contribution!

Summary

Crowd funding for adaptability: encourage an internal market in adapbatilbty activities by having employees with ideas to bid for resoruces and other employees to bet on the most succesful ideas

Recognition programmes: Directly and immeidatly rewarding those employees whose behavours support the design principles

Time awards: reward those who come up with innovative and creative suggestions supporting adaptability, specific time to develop their thinking and ideas.

Problem

In many organisations ideas are generated from the top of the organisation or from the “Research and Development” department.  There are complex management processes to turn ideas into projects.  As a  result the creativity of the workforce and their implicit knowledge is lost to the organisation

The problem the Hack addresses is outlined by  Doz and Kosenen’s work on strategic agility.  Managers hoard their resources rather than actively sharing with others.  This hack challenges the management orthodoxy that they control resources and workers utilise them at management command.

Solution

The approach is based on the concept of crowdfunding innovative ideas by creating and developing an internal market in adaptability.  This is achieved by each employee being able to propose a project idea and put it forward to all employees.  Individuals have a “bank” of hours – for example ten per month; that they can bid against individual projects.

The projects with the highest number of hours bid goes into process.

There is a parallel incentive plan that rewards employees who have come up with successful projects with a percentage of the hours bid as “free time” for them to use as they wish; either for holiday, or to work on the project or to be converted to cash.

This is a total break with the normal approach on idea generation and project management.  It puts power, in the form of resources, into the hands of employees rather than management.

Practical Impact

The hack is stunningly simple.  Here is an example of the approach:

This allows employees to make bids simply against a project and against their own budget.

Each employee will write a presentation for their project with a time and skills budget which will be shared with employees

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CIPD Hackathon – Hacking HR to Build an Adaptability Advantage; A reward perspective

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Introduction

The UK’s HR professional body, the CIPD has recently set up a “Hackathon” to look at how HR can build an adaptability advantage.  A good idea with an interesting approach.  There appears to be limited consideration of how reward will support and enhance the approaches.  Reward has powerful implements in its tool kit to support change.   So I set my mind to an analytical structure to think about building adaptability advantage.

Wisdom of crowds – a challenge

I am a great believer in the wisdom of crowds.  Therefore I throw a challenge out to all those interested in reward, change, innovation and HR to generate ideas as to how the reward toolkit can be used to support adaptability advantage.

The reward blockers

Reward is largely designed to support existing behaviour.  So, in some organisations, it is used to support the status quo.  Rewarding behaviour that supports the organisation’s ideology and putting reward power in the hands of managers who have an understandable vested interested in supporting the status quo.  The challenge is to design an analytical reward framework that supports creative destruction, moving on from the status quo to a new organisational state and ideology.

A suggested framework – resource based strategy

I have used the resource based strategy framework as a starting place.  I know this may be consider a little old fashioned, but it works for me and if you have a better structure I would be very pleased to hear about it!  Using the resource based strategy approach we look at:

  • Resources
  • Capabilities
  • Competencies
  • Value Chain

that support adaptability and how we can use reward to support these factors.

Resources

What are the resources that support adaptability – how do we identify and cluster them?  Clearly people are the key.  But, what sort of people?  One could argue that it is the mavericks and free thinkers that lead the charge on adaptability.  Yet these types of people do not always fit or engage well with the corporate environment.  How do we reward the disrupters in our organisation without descending in to some Faustian pit of chaos?

Capabilities

How do we build organisational and personal capability to support adaptability?  What would the reward structure supporting such capability building look like?  Would we know it if we saw it, how would me measure it?  Organisational learning and routines would be key in building these capabilities – but it has always been an interesting question in the management of knowledge as to how we measure and reward organisational learning?  (Even ignoring the concept that organisations do not “learn” people do the learning).

To sustain competitive advantage our capabilities in adaptability must be hard to imitate – otherwise everyone will copy us and probability at a lower cost.    So we have to reward not only specific capabilities but those that are hard to imitate.  They may be hard to imitate because they are specific to our corporate environment – but to gain competitive advantage they must be so much more than just organisationally or sector specific.

Competencies

The competencies we need should flow out of the capabilities – or perhaps not?  What specific, observable, rewardable competencies are required and with what and how are we rewarding them?

Value chain

What are the internal and external value chains using our unique resources and capabilities that lead to adaptability advantage?  We must look to our clusters of resources and capabilities and how these are combined to give our competitive advantage.  What reward tools do we use to strengthen our value chains and the activities that support them; perhaps across enterprises and organisations, turning rigid barriers porous?

Conclusion

There are far too many questions and too few answers in this blog.  If the reward perspective; which is incredibility powerful in encouraging behaviour change can be harnessed, using the wisdom of crowds, to the task of “Hacking HR to Build an Adaptability Advantage” we will not only add enormous value to the process; but we will be key in ensuring its enduring success.  Over to you O wise crowds.