Page 264 - DMGT406_HUMAN_RESOURCE_MANAGEMENT

Unit 15: HRM Effectiveness

combination of both. Research and Development (R&D) activities of an organisation are examples Notes
of such innovation. In any organisation need for innovation is primarily felt to keep pace with
the competition. It has to be essentially customer focussed as this backward linkage facilitates
process-centered innovative changes. Whether it is just-in-time (JIT) inventory, Supply Chain
Management (SCM), Business Process Outsourcing (BPO), Flexible Manufacturing Systems (FMS),
Product/Service customisation, strategic backward or forward integration, synergy through
merger or acquisition, alliances or collaboration, organisational re-engineering TQM or Six
Sigma Practices, new work culture as facilitator of organisational change or any R&D initiative
for value addition, which broadly encompasses innovation; all stem from customers' explicit or
implicit needs. Mapping customers' needs and aligning the same to innovation initiative is
what we need in this competitive world. Innovation is enabled by proactive HR Practices.
Subscribing to innovation without proactive HR practices will hinder rather than fostering
innovation in an organisation. Proactive HR Practices, inter alia, call for creating a work
environment that recognises creativity, inter-organisational co-operation rather than
competition, working as cross-functional teams, productive meetings for innovative results,
introduction of formal innovation programmes and finally organisation's receptivity to new
ideas and perspectives. Fostering innovation requires a structured approach. It has to be broadly
in the given context, leadership, values and culture. Contextual analysis helps in building required
innovation teams. Leaders facilitate the teams. Values enable adoption of principles which
foster innovation and finally the culture provides the playing field.
At this stage, it is pertinent to define creativity as innovation and creativity are often used
interchangeably in work place. Webster Dictionary has defined creativity as "the ability or
power to create, to bring into existence, to invest with a new form, to produce through imaginative
skill, to make or bring into existence something new". Creativity is therefore, the core
competency. It is the talent of employees of an organisation. Competitors can replicate the
strategies of an organisation but not the creative talents of its employees. To encourage creativity,
organisation first create the right environment where employees feel safe even to come up with
'dumb' or 'crazy' ideas. Creativity is often punished in organisation, as creative people spend
more time to get ready for action. They are also more difficult to manage. Organisations,
therefore, often see them as major time and money wasters and inhibit their creative thoughts.
A review of creativity literature helps us to capture creative patterns in following ways:

1. A creative process is a balance of imagination and analysis. It involves idea generation,
analysis and evaluation.
2. Creativity does not stems from subconscious process, as traditionally believed by the
classical school of thoughts. It is a purposeful or directed attempt to generate new ideas
under controlled situation to help organisation to leapfrog in competition. Paul E. Plsek
(1997), used the term more appropriately as 'Directed Creativity'. It is a purposeful
generation of creative ideas with seriousness of its implementation, whenever it matches
with organisational requirements. Non-implementation of at least some ideas (that fit the
purpose) will inhibit creativity.

Innovation is the implementation of creative ideas. Therefore, creativity is the subset of
innovation. Innovation being a holistic concept, here we prefer to use the term interchangeably.
Competencies on the other hand are set of behaviours, which encompass skills, knowledge,
abilities and attributes. Competencies are measurable and it changes over time. Hamel and
Prahalad (1990) attributed business success only on innovative creativity, knowledge resources
and the expertise, which together create the critical potential of an organisation, i.e., core
competencies. Other proponents of core competencies like; Quinn (1992), Drucker (1992), Porter
(1995), Waterman (1983), Peter (1988), Nonaka and Takeuchi (1955), Senge (1990), also show that
developing core competencies help an organisation to build strategic power. Core competencies
are difficult to duplicate by the competitors because of their distinctiveness. Core competencies

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