'HR forms a critical backbone of an innovation strategy,' says Canadian academic
A $50-million donation to Polytechnique Montréal last week to establish a disruptive innovation institute has put a spotlight on the urgent need for Canadian organizations to increase their own adaptability.
As one expert highlights, HR leaders play a crucial role in implementing innovation strategies, ensuring crucial employee buy-in as companies vie to remain competitive in an evolving landscape.
“The whole organization needs to be innovative in the way that it balances these functions,” says Tim Hannigan, associate professor of strategy and organization at the University of Ottawa’s Telfer School of Management.
“But I also think that the HR lead is a critical stakeholder at the table.”
A new urgency for Canadian businesses to innovate
As Hannigan explains, current external pressures are creating an environment where innovation is no longer optional for Canadian companies – not only for directly vulnerable industries such as steel and automotive, but the myriad others that rely on them.
“If you consider a situation like we find ourselves in right now, with the tariffs coming from the Trump administration, it's creating a lot of uncertainty in markets that Canadian companies have likely taken for granted for some time,” he says.
“And so the environment is really putting a fire underneath these companies to say, 'Okay, we need to think about what tomorrow is going to look like.’"
Innovation will only be successful with HR buy-in and contributions, Hannigan notes, adding that workforce planning must align with any strategic shifts. Companies may need to rethink hiring strategies, talent retention, and internal development to ensure they can adapt to rapidly changing market conditions.
Grounding innovation in strategy
While innovation is often seen as inherently positive, it must be carefully managed, as change for the sake of change can lead to dysfunction.
“Just because something's different doesn't mean it's valuable,” Hannigan cautions.
For HR leaders, the key is to integrate innovation into an organization's broader strategic goals, ensuring alignment with business needs and workforce capabilities. Without this alignment, organizations risk a disconnect between their stated values and their actual practices.
"HR forms a critical backbone of an innovation strategy. But conversely, if HR doesn't implement an innovation strategy, then the risk is decoupling, where there are espoused values that are not reflected in the hires, they're not reflected in onboarding,” he warns.
By taking an active role in innovation strategies, HR professionals have the unique ability to gauge an organization's internal culture, identify stagnation, and implement initiatives that encourage growth, says Hannigan.
“Everyone likes to talk about innovation as automatically a good thing, but innovation in practice is hard. It's hard because it embraces the uncertainty, and it's hard because it has to be integrated,” Hannigan says.
“Some companies unfortunately don't successfully implement their innovation strategies effectively, and I think it's because they don't embrace HR leads in doing that. You can plan the best strategy, but if you don't implement it properly, then you will end up with decoupling.”
How HR can lead innovation strategy
While innovation requires a company-wide commitment, HR plays a pivotal role in driving and implementing innovation strategies.
"The whole organization needs to be innovative in the way that it balances these functions. But I also think that the HR lead is a critical stakeholder at the table in terms of ensuring that an organization has an innovation strategy that they put into practice,” says Hannigan.
A prime example, Hannigan points to Microsoft’s reinvention under CEO Satya Nadella, which relied heavily on the input and leadership of CPO Kathleen Hogan.
HR leaders can take a cue from her playbook, he says, by centering culture and employee involvement as key aspects of any change strategy.
“If the organization is in a bit of a rut and needs to be able to transform itself, then it needs to realign its values, it needs to potentially realign its roles. It needs to potentially not just talk about innovation, but put it into practice through new routines, through new ways of organizing teams, through ways of organizing projects,” Hannigan explains.
“In general, there needs to be alignment between a company’s culture and its strategy. If the strategy embraces innovation, then culture is the mechanism to execute this strategy.”
Risks of failing to innovate in HR practices
Hiring and workforce development are integral to fostering an innovative organization – companies that fail to create pathways for fresh ideas risk stagnation, says Hannigan.
"Certainly, an organization could always be a little bit more nimble and creative in the people that it tends to hire. An organization can also be more nimble in the type of strategy that it tries to implement. And the implementation of a strategy is very much related to the people that are getting hired – the people that are getting hired, and the way that they're being integrated into the organization,” Hannigan says.
Failure to leverage talent effectively can lead to frustration among employees and missed opportunities for innovation.
"I've seen this in some of the studies that I've done, where a well-established organization that has a cash cow hires some young people that have really amazing skills, and then the young people get frustrated because their skills aren't being put to use,” he explains, pointing to Sears as an example of a company that failed to innovate, essentially becoming “victims of their own success.”
“Whereas, if you look at Walmart, since the 1970s – Walmart is tremendously innovative as a company, because they're both exploiting opportunities, but they're also exploring new ones at the same time, and they're dynamic in the way that they do that.”
How HR can lead with workforce innovation strategies
For HR leaders, the key is to integrate innovation into an organization's broader strategic goals, going beyond the abstract to the strategic; without this alignment, organizations risk a disconnect between their stated values and their actual practices.
“That strategy has to be guided by the chief executive, but it has to be implemented by HR,” says Hannigan.
“It has to be implemented and made real. It can't just be the window dressing of the posters. And if the HR lead is not a big part of the conversation, then that is one indication that this is not serious within the organization.”
However, innovation does not necessarily mean layoffs and a complete refresh of a workforce, as that can contribute to extended impacts on morale. This is one of the challenges for HR in the midst of an innovative transition, Hannigan says: finding ways to tap into the existing workforce instead of starting over.
“Maybe some people aren't going to be as compatible with this new direction in the organization that's more around innovation, so HR needs to be at the table and intensely involved in the reshaping of the organization, but by no means is this downsizing in disguise,” he says.
“The point of an effective innovation strategy is not to just fire everyone and bring new people in. There's tremendous institutional memory, but also, the heart of an organization are their people, what they do, what they know, and so HR plays a very critical role in ensuring that you have an innovation system that builds on strengths and is implemented properly and effectively.”
