In the New Economy, Worker Innovation - Not Productivity - Is the Key to Value
As businesses wrestle with questions over whether to usher employees back to the office, many are turning to surveys and studies about worker productivity, and how it’s been affected by having people work from home. But while that news is good -- people are even more productive working from home -- it’s also not the most important metric.
When it comes to the human workforce, terms like “productivity” and “efficiency” are reflective of a bygone era. What businesses need from personnel are innovation and creativity, both of which can thrive whether workers are at home or in the office.
AI and the pandemic
For years, new technologies like machine learning and artificial intelligence have been taking over more and more rote tasks -- the kinds of things that “productive” and “efficient” workers previously did in many factories, for example.
The Covid-19 pandemic has accelerated this phenomenon across numerous sectors. Robots are replacing people “faster than ever,” Time reports. In one survey, three-quarters of companies cited AI as critical to their success in 2020. Having discovered the productivity and efficiency of these machines, businesses are expected to speed up these developments even more.
But this doesn’t mean there’s no place for people in organizations. Quite the opposite. What businesses need from today’s workforce is what remains uniquely human: our minds. Technologists may be trying, but so far no one has come up with machinery that can compete with the human ability to innovate and create.
The process of innovating comes from understanding each other, learning about each other’s problems, considering solutions, and collaborating to come up with strong ideas that work. So it should come as no surprise that a slew of surveys find the most in demand skills now include things like communication, agility, problem-solving, flexibility, and people management.
Innovation can flourish anywhere
So the key question becomes whether innovation and creativity have taken a hit from having so many people work remotely during the pandemic.
Bank of England Chief Economist Andy Haldane addressed this in a speech, pointing out that working from home can have both positive and negative effects on creativity. “The absence of distraction and noise is one important factor fostering creativity. Being in ‘flow’ requires a degree of cognitive tunnelling,” he said. “For many people, home-working provides that quieter, less distracting environment.” This will certainly be the case for millions of people as young children return to school and parents can focus on work for longer blocks of time.
But, Haldane noted, working from home can prevent chance conversations and meetings with people who have new ideas and perspectives, which are also helpful in getting creative sparks going.
For the book I co-authored, The Expertise Economy, I dug into a great deal of research around creativity and innovation. It’s clear that people can be creative and innovative no matter where they’re getting their work done. There are things they need from their employers to make this happen.
Workers need the time to spend learning, thinking, and exploring new possibilities. They need tools to develop new skills and to collaborate with each other. Through online platforms that allow for socializing and brainstorming (or “brainwriting”), people can meet others throughout their organization, connect with them, chat, and build ideas together. A recent survey by Canva found that Americans say they’ve more collaborative while working remotely.
Workers also need a culture that prizes learning, experimenting, and failing along the way -- one that provides the psychological safety to take risks and challenge norms.
What investors can do
Innovation can’t be measured in the same mathematical ways that productivity has been measured traditionally. McKinsey has noted that R&D and sales of new products can provide some insight into innovation. Still, it’s impossible to know the pace at which employees are developing new ideas.
But investors can push companies to increase their focus on innovation. Ask executives about their latest innovations and about new products and services on the way. Ask employees whether they are able to innovate, and what could be done to help make that happen.
The rewards await. Research finds that businesses with open innovation practices perform better, paying higher shareholder values. And the more innovative employees are, the more productive and efficient the tools they use are as well -- so the productivity metrics come out ahead as well. Investing in innovation creates a win all around.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.