Dr John Sullivan Talent Management Thought Leadership

Hiring has the highest bus. impact in HR, and innovators produce the highest impact of any new hire.

Article Descriptors| Recruiting / Innovators – Highlighting The Benefits – 5 Min Read

Logically, there must be a single area within Talent Management that produces the highest business impact. And because of its extraordinary impact, that area should receive priority treatment. So it makes sense for every executive and HR leader to periodically try to answer this strategic question, “Of all possible HR actions, which one has the highest economic impact?” 

Fortunately, we know from BCG research that of all subfunctions within HR, Recruiting produces the highest business impacts (a 3.5x higher revenue impact and a 2x higher profit impact). We also know from analysis that at the most innovative corporations, innovator / top-performing employees produce a huge performance differential over the average employee (a multiple of 5 to 300 times greater).

However, even with these facts, I have found that the primary reason why the hiring of innovators is so severely undervalued and poorly executed is that most decision-makers don’t fully know or appreciate the tremendous value that is added when you hire even a single innovator.

The remainder of this article focuses on understanding those benefits. There are many advantages to developing a data-driven innovator hiring program that aims to successfully identify and hire more innovators. The 15 benefits highlighted below have been divided into two categories: talent management benefits and broader business benefits.

The Talent Management Benefits (From Hiring Innovators)

Every talent management sub-function will benefit from a targeted innovator hiring program. Those “talent management benefits” almost always include: 

• In most cases, developing innovators in-house is not an option – Even when it is successful. Developing innovators from among their employee base is extremely expensive, risky, and time-consuming. So, the superior option if you need innovators right now is to recruit them away from your competitors. And because they will have already proven themselves to be innovators. Most of these new hires will hit the ground running.
• Hiring innovators will improve your recruiting results in other areas – Adding innovators to your workforce will instantly improve your external employer brand image. And your image as an innovative company will make it much easier for you to recruit additional innovators. At the same time, you can hire many more high-performing candidates in all areas. That will be excited about the opportunity to work alongside innovators.
• Your recruiting competition will be limited – My research has revealed that most major corporations currently have no (or only a very weak) formal program for recruiting innovators. Because a targeted innovator recruiting program is so rare, you can expect little effective competition when recruiting innovators (outside of companies like Amazon, Microsoft, and Apple that prioritize recruiting innovators).
• You can also expect improved retention – The opportunity to work alongside many other innovators will help you retain your current innovators. In addition, most current employees will also stay longer because they enjoy working alongside and learning from innovators. 
• Innovators will make others around them perform better – Not only do innovators create direct value with their innovations. However, their energy, drive, and focus on excellence will also cause their teammates who want to support innovation to perform better. And with the added capability that innovators have for finding a way around roadblocks. You can also expect a measurable increase in team productivity, fewer project delays, and an improvement in time-to-market.
• You may be able to increase your diversity hiring – Many diversity candidates have expressed needing an extra “edge” to compete equally with non-diverse employees throughout their careers, so if you tailor your recruiting message correctly. You can expect that some diverse candidates will realize that working alongside innovators will provide them with the real career advantage they have been seeking.
• Expect an improved internal image and funding for HR – Once your corporate executives realize the tremendous dollar impact your innovator recruiting program has produced. Your talent leaders can expect more support, recognition, and extra funding from their executives.
• Realize that recruiting innovators doesn’t cost any more – Most don’t realize it, but finding innovators is actually quite easy. Simply because everyone (both internally and externally) constantly talks about them and their innovations. So you won’t need expensive advertising or job postings to source them. You will, however, need effective recruiters with the know-how to sell picky innovator candidates. But also capable of convincing hiring managers to actually hire top innovator candidates. That frequently comes across as a bit egotistical and eccentric. 

Note: You can find detailed information on how to recruit innovators here.

The Broad Business Impacts (That You Can Expect) 

In addition to the above talent management impacts, you must educate your leadership about the many positive business impacts of hiring innovators. Those broad business impacts include:

• This program will produce a high ROI – Investing in hiring innovators will have a high ROI because a 2020 Global Innovation Survey by BCG found that investing in innovation produces a 3 to 1 ROI ratio.
• Serial innovation will increase your market cap value – When you examine the top corporations based on their market cap (i.e., Apple, Nvidia, Alphabet, Microsoft, and Amazon). The most prominent factor they have in common is a recent history of serial innovation. So, for the immediate future, your executives must realize that the stock market rewards serial innovation corporations handsomely. 
• Effective innovation will increase corporate revenue – When you are the first to produce high-impact innovations. You will be able to charge a premium price. And that will directly increase your corporate revenue. And, of course, a portion of that added revenue can be used to fund additional innovation.
• Innovation will allow your organization to be disruptive – Innovation is essential in a world where everything you do is rapidly copied. However, innovation provides its highest value when the early introduction of an innovation literally disrupts your entire industry. As a “first mover firm,” you will receive many benefits, including added publicity, rapid gains in market share, and a chance to tie up all of the best vendors and strategic partners. This first-mover competitive advantage will require every other company in your industry to retool and be forced into playing an expensive catch-up game. 
• In some technology areas, standing still will never again be an option – Your executives need to realize that there are some technology areas (like AI, virtual reality, quantum computing, and cybersecurity) where maintaining the status quo will never again be a viable option and making the continuous hiring of innovators an absolute requirement in each critical area.
• Effective innovation will improve your product brand image – After you have several successful innovations. You will likely develop a reputation for being an innovative company, and that innovative image will improve your brand/product image. Which will likely result in an increase in sales for many of your other products. An improved brand image may even boost your stock price.
• Your organization will be able to attract the very best suppliers and vendors – It’s a fact that the very best vendors, suppliers, and strategic partners seek to be associated with and learn from key industry innovators. So, having a reputation for innovation will likely increase your access to the best vendors. These vendors may even offer you lower prices in exchange for building and maintaining the relationship. 

Defining Effective Innovation

If you are unsure what innovation means or what qualifies an employee as an innovator. The dictionary defines innovation as “the act of introducing something new.” It differs significantly from being creative. Creative ideas are different by definition, but they may not be implementable. So, when defining innovation, I recommend consistently using the phrase “implemented innovation” to ensure that the innovative idea or concept was actually introduced and implemented, which means that it will have produced measurable business impacts to qualify an innovator. The product, practice, or service that the employee successfully introduced. The performance or capabilities in this area must have improved by at least 25%.

If you only do one thing – ask the manager of one of your large teams to make a list of their innovative employees. Next, ask them to determine what percentage of those innovators became innovators due to targeted in-house development. Then, compare that percentage to the percentage of innovators that were already innovators when they were hired. And don’t be surprised when you find that hiring is the key to increasing your number of innovators.

Final Thoughts

Lately, there has been a great deal of discussion about the importance of “talent density” in an organization. Talent density means the percentage of your employees in a business area rated as top performers. However, I have found that the concept of talent density can’t provide its maximum value when your talent density is spread equally among all of your business areas. Instead, the organization must identify the business areas that can only prosper when they are densely populated with innovators. And with that prioritization as a guide, your hiring innovator program can focus primarily on the priority areas where it can have its highest impact.

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