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M in PL in E g pu rp os es Student Workbook

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BSBINN502 Build and sustain an innovative work environment

Part of a suite of support materials for the

BSB Business Services Training Package

1st Edition 2015

Acknowledgement Innovation and Business Industry Skills Council (IBSA) would like to acknowledge HASCOM Pty Ltd for their assistance with the development of the original resource for BSBINN502A. BSBINN502A writer: Kensington Budgewater (2010) Revised for BSBINN502 by IBSA (2015) Copyright and Trade Mark Statement © 2015 Innovation and Business Industry Skills Council Ltd All rights reserved. Apart from any use permitted under the Copyright Act 1968, no part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, or otherwise, without written permission from the publisher, Innovation and Business Industry Skills Council Ltd (‘IBSA’).

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Use of this work for purposes other than those indicated above, requires the prior written permission of IBSA. Requests should be addressed to Product Development Manager, IBSA, Level 11, 176 Wellington Pde, East Melbourne VIC 3002 or email [email protected] ‘Innovation and Business Skills Australia’, ‘IBSA’ and the IBSA logo are trade marks of IBSA.

Disclaimer

Care has been taken in the preparation of the material in this document, but, to the extent permitted by law, IBSA and the original developer do not warrant that any licensing or registration requirements specified in this document are either complete or up-to-date for your State or Territory or that the information contained in this document is error-free or fit for any particular purpose. To the extent permitted by law, IBSA and the original developer do not accept any liability for any damage or loss (including loss of profits, loss of revenue, indirect and consequential loss) incurred by any person as a result of relying on the information contained in this document.

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The information is provided on the basis that all persons accessing the information contained in this document undertake responsibility for assessing the relevance and accuracy of its content. If this information appears online, no responsibility is taken for any information or services which may appear on any linked websites, or other linked information sources, that are not controlled by IBSA. Use of versions of this document made available online or in other electronic formats is subject to the applicable terms of use.

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To the extent permitted by law, all implied terms are excluded from the arrangement under which this document is purchased from IBSA, and, if any term or condition that cannot lawfully be excluded is implied by law into, or deemed to apply to, that arrangement, then the liability of IBSA, and the purchaser’s sole remedy, for a breach of the term or condition is limited, at IBSA’s option, to any one of the following, as applicable: if the breach relates to goods: (i) repairing; (ii) replacing; or (iii) paying the cost of repairing or replacing, the goods; or

(b)

if the breach relates to services: (i) re-supplying; or (ii) paying the cost of re-supplying, the services.

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Published by: Innovation and Business Industry First published: April 2015 Skills Council Ltd 1st edition version: 1 Level 11 Release date: April 2015 176 Wellington Parade East Melbourne VIC 3002 Phone: +61 3 9815 7000 Fax: +61 3 9815 7001 Email: [email protected]

www.ibsa.org.au

ISBN: 978-1-925123-82-1 Stock code: BSBINN5021W

Table of Contents Getting Started ....................................................................................................................1 Features of the training program .................................................................................1 Structure of the training program ................................................................................1 Recommended reading ................................................................................................1 Introduction .........................................................................................................................3 Innovation at work ........................................................................................................3 Are you ready to start innovating? ...............................................................................5 Strategic innovation ......................................................................................................5

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Seven dimensions of strategic innovation ..................................................................5 Section summary ....................................................................................................... 11

Further reading .......................................................................................................... 11 Section 1 – Lead by Example .......................................................................................... 12 What skills will you need? ......................................................................................... 12 Integrate innovation into leadership and management .......................................... 12 Positive receptions and constructive advice ............................................................ 13 Establish and maintain relationships based on respect and trust ......................... 18 Take considered risks................................................................................................ 19

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Evaluate your approach for consistency with organisational practices ................. 20 Seven dimensions of strategic innovation ............................................................... 21 Further reading .......................................................................................................... 21

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Section checklist ........................................................................................................ 21 Section 2 – Supportive Work Practices .......................................................................... 22

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What skills will you need? ......................................................................................... 22

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Establish innovative working conditions .................................................................. 22 Processes that foster innovation and evaluation of ideas ...................................... 25

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Facilitate collaborative work arrangements ............................................................. 30 Work in ways to maximise opportunities for innovation.......................................... 32 Seven dimensions of strategic innovation ............................................................... 32 Further reading .......................................................................................................... 33 Section checklist ........................................................................................................ 33 Section 3 – Promote Innovation...................................................................................... 34 What skills will you need? ......................................................................................... 34 Acknowledge suggestions, improvements and innovations ................................... 34 Celebrate and promote innovation ........................................................................... 36 Reinforce the value of innovation ............................................................................. 37 Evaluate innovative ideas ......................................................................................... 42

Seven dimensions of strategic innovation ............................................................... 44 Further reading .......................................................................................................... 44 Section checklist ........................................................................................................ 44 Section 4 – The Physical Environment ........................................................................... 45 What skills will you need? ......................................................................................... 45 Review the physical environment ............................................................................. 46 Collaborate on enhancements to the physical environment .................................. 49 Consider the potential for innovation of work area designs ................................... 50 Design, fit out and decorate ...................................................................................... 51 Seven dimensions of strategic innovation ............................................................... 53

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Further reading .......................................................................................................... 53 Section checklist ........................................................................................................ 53 Section 5 – Create Learning Opportunities .................................................................... 54 What skills will you need? ......................................................................................... 54 Encourage sharing of information, knowledge and skills ....................................... 54 Formal training and informal up-skilling................................................................... 55

Create opportunities to learn from others................................................................ 57 Seven dimensions of strategic innovation ............................................................... 62 Further reading .......................................................................................................... 63

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Section checklist ........................................................................................................ 63

Glossary ............................................................................................................................ 64

Appendices ....................................................................................................................... 65

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Appendix 1 – Seven dimensions of strategic innovation checklist ........................ 65 Appendix 2 – Stakeholder mapping template ......................................................... 66

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Appendix 3 – Leadership skills matrix...................................................................... 67

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Appendix 4 – Evaluation matrix ................................................................................ 68 Appendix 5 – Workspace evaluation ........................................................................ 69

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Appendix 6 – Professional development plan ......................................................... 70

Student Workbook

Getting Started

Getting Started Features of the training program The key features of this program are: ● Student Workbook – Self-paced learning activities to help you to develop an

understanding of key concepts and terms. The Student Workbook is broken down into several sections. ● Facilitator-led sessions – Challenging and interesting learning activities that can be

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completed in the classroom or by distance learning that will help you consolidate and apply what you have learned in the Student Workbook. ● Assessment Tasks – Summative assessments where you can apply your new skills

and knowledge to solve authentic workplace tasks and problems.

Structure of the training program

This training program introduces you to the skills and knowledge required to build and sustain an environment that enables and supports the application of innovative practice. Specifically, you will develop the skills and knowledge in the following topic areas: 1. Leading by example

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2. Supportive work practices 3. Promoting innovation

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4. The physical environment

5. Creating learning opportunities.

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Your facilitator may choose to combine or split sessions. For example, in some cases, this Training Program may be delivered in two or three sessions, or in others, as many as eight sessions.

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Recommended reading Some recommended reading for this unit includes: ● Australian Institute for Commercialisation, 2009, Innovation Toolbox, viewed

October 2014, . ● Silverstein, D., Samuel, P., DeCarlo, N., 2012, The Innovator’s Toolkit: 50+

Techniques for Predictable and Sustainable Organic Growth (2nd edn), John Wiley & Sons, Hoboken. ● Skarzynski, P., Gibson, R, 2008, Innovation to the Core: A Blueprint for

Transforming the Way Your Company Innovates, Harvard Business School Publishing, Boston.

BSBINN502 Build and sustain an innovative work environment © 2015 Innovation and Business Industry Skills Council Ltd

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Getting Started

Student Workbook

Please note that any URLs contained in the recommended reading, learning content and learning activities of this publication were checked for currency during the production process. Note, however, IBSA cannot vouch for the ongoing currency of URLs.

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Every endeavour has been made to provide a full reference for all web links. Where URLs are not current we recommend using the reference information provided to search for the source in your chosen search engine.

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BSBINN502 Build and sustain an innovative work environment © 2015 Innovation and Business Industry Skills Council Ltd

Student Workbook

Introduction

Introduction The goal of this unit is for you to be able to build and sustain an innovative work environment.

Innovation at work Innovative businesses encourage innovation at all levels of the business. Employee innovation, in particular, is now regarded one of the keys to protecting Australian jobs.

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45% of lucrative business ideas – whether breakthrough products or services, new uses for old ones, or ways to cut costs – come from employees. 1

Governments at all levels are aware that Australian workplaces must embed innovation into their work practices in order to compete. The Productivity Commission states: ‘Innovation and diffusion of new and better production methods, and the introduction of new goods and services, are the core drivers of productivity growth – getting more, and more highly valued, outputs from any level of inputs.’ 2

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Innovation is now regarded as essential for maximising productivity and prosperity. Companies and businesses invest in innovation because they see a value in the results of innovation.

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Roughly $4 billion of Whirlpool’s 2008 $19 billion in revenue results came from their innovation areas. 3

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For some it may be surprising that innovation can be managed. For many, rules, structure and discipline may seem counterintuitive to their understanding of innovation. However, the prevailing view in recent times is not only that innovation can be managed, but that it must be managed. The question for businesses is not whether to innovate, but how.

Baumgartner, J., The Corporate Innovation Machine, JPB.COM, Belgium, available online, viewed September 2014, . 1

2 Productivity Commission, 2008, Annual Report 2007–2008, Productivity Commission, Canberra, p. 1, available online, veiwed September 2014, .

Roosen, P. and Nakagawa, T., 2008, ‘Innovation 101: Whirlpool’s Spin on Innovation’, IndustryWeek, viewed September 2014, . 3

BSBINN502 Build and sustain an innovative work environment © 2015 Innovation and Business Industry Skills Council Ltd

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Introduction

Student Workbook

Learning activity: Video – management innovation Gary Hamel is one of the world’s most influential business thinkers. 4 The following video is very insightful about why and how organisations must manage innovation. ● Hamel, G., ‘Continuous Management Innovation: What, Why and How?’,

Gary Hamel, viewed September 2014, . Watch the video and identify: ● The capabilities essential for business development. ● Why these capabilities are important for the competitiveness of businesses.

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● What Hamel says about the management of change.

Kneale, K., 2009, ‘In pictures: the 10 most influential business gurus’, Forbes, viewed September 2014, . 4

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BSBINN502 Build and sustain an innovative work environment © 2015 Innovation and Business Industry Skills Council Ltd

Student Workbook

Introduction

Are you ready to start innovating? Innovation can be managed! As a leader in your workplace, where do you start? It is important to remember that every process (even creative ones like innovation processes) can be managed.

Strategic innovation

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Organisations have a natural rate of innovation that is determined by a number of factors. Strategic innovation is about systematically raising the amount of innovation that your organisation produces. Strategic innovation is a holistic, systematic approach focused on generating beyondincremental, breakthrough or discontinuous innovations. Innovation becomes ‘strategic’ when it is an intentional repeatable processs that creates a significant difference in the value delivered to consumers, customers, partners and the corporation. 5

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Seven dimensions of strategic innovation

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Palmer and Kaplan (2007) identify seven dimensions of strategic innovation that an organisation must address if it is to make the breakthrough to strategic innovation. These are:

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1. A managed innovation process – How do we innovate? 2. Strategic alignment – Is everyone engaged and supportive?

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3. Industry foresight – Where are we headed?

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4. Consumer/customer insight – Do we know what they want and need? 5. Core technologies and competencies – What are our strengths? 6. Organisational readiness – Can we take action? 7. Disciplined implementation – Can we get results? If an organisation wants to encourage and improve upon the natural rate of innovation at all levels of the organisation, these dimensions must be decisively addressed.

Palmer, D. and Kaplan, S., 2007, A Framework for Strategic Innovation, InnovationPoint, San Francisco, p. 4, available online, viewed September 2014, . 5

BSBINN502 Build and sustain an innovative work environment © 2015 Innovation and Business Industry Skills Council Ltd

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Introduction

Student Workbook

Learning activity: Seven dimensions for managers Jot down your views of what a leader’s role and tasks would or could be to address each of the seven dimensions listed above.

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You can find A Framework for Strategic Innovation at: .

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A managed innovation process How do we innovate?

If your organisation is going to innovate, it needs to have a process for innovation. Innovation is too important to be left to random flashes of brilliance. An innovation process can have many features but some of the key ones are: ● processes for generating ideas (divergent thinking) ● processes for evaluating ideas (convergent thinking) ● standard evaluation criteria ● processes for implementing ideas (which may be project management systems).

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Student Workbook

Introduction

Note: Divergent and convergent modes Palmer and Kaplan identify ‘divergent’ and ‘convergent’ modes in the innovation process. ● Divergent activities happen in the early stages and include things such as

researching and brainstorming. ● Convergent activities occur later on and include those activities that put the ideas

back on track with the organisational strategy and processes; and things like customer validation and implementation.

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There are many different models for managed innovation and through this program you are encouraged to review many of them from a range of industry contexts. Example: The corporate innovation machine

Jeffrey Baumgartner has developed a well presented and easy to understand innovation model called ‘The Corporate Innovation Machine’.

● Baumgartner, J., The Corporate Innovation Machine, JPB.COM, Belgium, available

online, viewed September 2014, .

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Strategic alignment

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Is everyone engaged and supportive?

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Innovation projects, like all workplace projects and activities, must align with organisational strategies and goals.

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How innovation projects are implemented depends to some degree on the type of innovation we are talking about. There are four main types:

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● product innovations ● process innovations ● organisational innovations ● marketing innovations.

BSBINN502 Build and sustain an innovative work environment © 2015 Innovation and Business Industry Skills Council Ltd

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Introduction

Student Workbook

Learning activity: New products or improved processes Compare the following two objectives from different strategic plans: ● To improve the efficiency of the bottling line by 30% by EOY (end-of-year). ● To develop a new line of business software application for handheld devices.

Both can lead to innovation, but may require different systems to assist with realising those innovations. ● What types of innovations does each example represent? ● Which is more concerned with operating costs? ● Which is more concerned with business growth?

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● What differences can you see in key stakeholders?

● How would the innovation processes differ for each?

Discuss your findings with your classmates.

Strategic alignment is also essential to ensure engagement of key stakeholders, such as: ● management ● customers

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● participants in the system (employees).

Learning activity: Stakeholder mapping

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Mapping of stakeholders is a tool to:

● Understand the support and opposition to a planned change.

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● Determine who to communicate what to and how often.

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● Determine the composition of a project team or a steering committee.

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You can use the stakeholder mapping template in Appendix 2 to help you to identify and evaluate stakeholder engagement for an innovation project.

Industry foresight

Where are we headed? Industry foresight is about how well the organisation understands their industry and its: ● trends ● opportunities ● threats.

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BSBINN502 Build and sustain an innovative work environment © 2015 Innovation and Business Industry Skills Council Ltd

Student Workbook

Introduction

Consumer/customer insight What do our customers want? The phrase ‘the voice of the customer’ describes a process of capturing a customer’s requirements. Frequently, customers are key stakeholders in innovation projects, particularly those that deal with product or process innovations. Example: Did a customer actually say they needed post-it notes?

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Probably not. However, insight into unexpressed customer needs is a quality many great innovators have. Sometimes innovation requires inspired individuals that can identify unexpressed needs. If we only listened to what customers ask for we probably wouldn’t have Post-it notes, bagless vacuums or Twitter.

Core technologies and competencies

What are our strengths?

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Core technologies and competencies are the set of internal capabilities, organisational competencies and assets that could potentially be leveraged to deliver value to customers; including technologies, intellectual property, brand equity and strategic relationships.

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A company’s core technologies and competencies: ● deliver consumer benefits

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imitate)

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● provide a point of difference for the organisation (not easy for competitors to

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● are central to many products and markets.

Core competencies: ‘A unique ability that a company acquires from its founders or develops and that cannot be easily imitated. Core competencies are what give a company one or more competitive advantages, in creating and delivering value to its customers in its chosen field. Also called core capabilities or distinctive competencies.’ Source: BusinessDictionary.com, viewed September 2014, .

BSBINN502 Build and sustain an innovative work environment © 2015 Innovation and Business Industry Skills Council Ltd

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Introduction

Student Workbook

Organisational readiness Can we take action? A structured analysis of your organisational readiness for an innovation program is essential. Keep in mind that the introduction of innovation systems will impact on these elements: ● people ● structures ● culture

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● organisational practices.

The strategies that you implement will depend on how well developed these elements are. Learning activity: 20 things about innovation

The Australian Institute for Commercialisation has produced a quiz called ‘20 things you need to ask yourself about innovation’.

It helps to understand an organisation’s innovative abilities and provides tips and ideas for managing your organisation’s ‘innovation journey’.

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The quiz can be found here:

● Gilmore, R., 2009, 20 Things You Need To Ask Yourself About Innovation, AIC,

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available online, viewed September 2014, .

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You can find out more on the Australian Institute for Commercialisation website at .

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Disciplined implementation

Can we get results?

The last of the seven dimensions of strategic innovation is ‘disciplined implementation’. Some processes that will assist with disciplined implementation include: ● well implemented policies and procedures ● a project management system ● performance management systems ● lean or Six Sigma tools ● continuous improvement processes ● change management strategies.

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BSBINN502 Build and sustain an innovative work environment © 2015 Innovation and Business Industry Skills Council Ltd

Student Workbook

Introduction

Tip: Innovation projects A managed innovation process on its own is not sufficient. In order to implement innovation projects, organisations need to have a project management system.

Section summary The remainder of this workbook will address the skills and knowledge you need to help build and sustain an innovative work environment.

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However, in order to succeed, you need to be mindful of the range of issues that can be identified through the seven dimensions of strategic innovation. At the end of each section, you will review how those skills impact or depend on the seven dimensions of strategic innovation.

Further reading

● Palmer, D. and Kaplan, S., 2007, A Framework for Strategic Innovation,

InnovationPoint, San Francisco, available online, viewed September 2014, . ● Swanberg, J., 2010, the innovative workplace: a white paper on developing an

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innovative workplace, University of Kentucky, available online, viewed October 2014, .

BSBINN502 Build and sustain an innovative work environment © 2015 Innovation and Business Industry Skills Council Ltd

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Section 1 – Lead by Example

Student Workbook

Section 1 – Lead by Example Innovative leaders act as role models for innovation. If you talk the talk, you have to walk the walk. Scenario: Lead by example Jennie is a supervisor in a small business. Her managers have concluded that innovation is a strategic differentiator for their business. The business hasn’t been doing poorly, but they aren’t growing decisively either.

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The management team have identified that innovations in processes, products, and marketing will enable the business to gain some market share. The business has recently developed and implemented an innovation system that addresses the seven dimensions of strategic innovation.

As a leader in the business, Jennie is expected to provide leadership to make this new innovation system work.

What skills will you need?

In order to lead by example, you must be able to:

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 Make innovation an integral part of leadership and management activities.

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 Demonstrate positive reception of ideas from others and provide constructive advice.

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 Establish and maintain relationships based on mutual respect and trust.

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 Take considered risks to open up opportunities for innovation.

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 Regularly evaluate own approaches for consistency with the wider organisational or project context.

Integrate innovation into leadership and management As a workplace leader, you need to embed innovation into your leadership and management activities. This requires you to embed innovation into: ● communication of goals and objectives ● education and training ● performance management ● project management practices.

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BSBINN502 Build and sustain an innovative work environment © 2015 Innovation and Business Industry Skills Council Ltd

Student Workbook

Section 1 – Lead by Example

You will also need to: ● provide advice and support on innovation ● encourage engagement with innovative systems ● monitor performance indicators for innovation.

Learning activity: Innovation DNA Consultants and gurus frequently refer to embedding innovation into the DNA of the organisation. ● What do you think is meant by this metaphor? ● Why is it a useful metaphor for managers?

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● Can you identify some organisations that fit this description?

● How can you integrate innovation to make it part of your organisation’s DNA?

Positive receptions and constructive advice Be accessible and open to ideas

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How you receive ideas and what you do with them is critical for leading innovation in your workplace. As a workplace leader, you are one of the first points of contact for innovation ideas. You need to open the door, not close it.

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Receiving ideas openly

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Some traditional methods for obtaining ideas from employees include: ● feedback systems

● meetings

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● one-on-one discussions

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● presentations.

Techniques for encouraging feedback and discussion When engaging in any activities where you are receiving ideas from employees, be conscious of: ● active listening ● open and closed questions ● summarising and paraphrasing ● being a gatekeeper ● opening up the discussion.

BSBINN502 Build and sustain an innovative work environment © 2015 Innovation and Business Industry Skills Council Ltd

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Section 1 – Lead by Example

Student Workbook

Active listening Active listening is demonstrated listening and it is hard work. Why is it important? There are three elements of face-to-face communication: ● words ● tone of voice ● body language.

When speaking or listening, body language is important but is often not communicated effectively.

● maintain eye contact ● lean in

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Active listening requires us to:

● ask questions to explore or clarify

● listen to for what people feel, not just what they say

● stop thinking of our response and keep the person talking ● paraphrase to confirm understanding.

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Learning activity: Active listening

Watch this video on YouTube to learn about active listening from Professor Jeffrey Berman at Salem State University:

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● Berman, J., 2006, ‘Active Listening’, YouTube, viewed September 2014,

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Open and closed questions

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Use open questions to explore their ideas and promote discussion. Open questions start with: What?

Where?

When?

Who?

Why?

How?

Open questions force people to talk more and open up. Closed questions, on the other hand, slow or stop discussion. Use closed questions to clarify and verify what you think. Closed questions can be answered yes or no; true or false; or alternative A or alternative B. The game of twenty questions uses closed questions exclusively.

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BSBINN502 Build and sustain an innovative work environment © 2015 Innovation and Business Industry Skills Council Ltd

Student Workbook

Section 1 – Lead by Example

Example: What would happen if ...? You want to encourage people to think and evaluate problems themselves. Be careful not to start sentences with words like: ● ‘No.’ ● ‘It won’t work because ...’ ● ‘I see a problem with that ...’

Remember, when you are discussing ideas, you are still in the divergent stage so it’s better that the person leaves you with questions rather than answers. Better to frame your responses with phrases like:

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● ‘What would happen if ...?’

● ‘How would affect it?’

● ‘What would be the effect of ...?’

Summarising and paraphrasing

Summarising and paraphrasing are important during brainstorms, discussions and meetings. Summarise to make clear the major points.

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Paraphrase to ensure that you have understood what is being said. Learning activity: Paraphrasing

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Watch the following video and paraphrase the definition of ‘memory’.

● Bornstein, A., ‘Memory Basics’, Videojug, viewed September 2014,

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BSBINN502 Build and sustain an innovative work environment © 2015 Innovation and Business Industry Skills Council Ltd

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Section 1 – Lead by Example

Student Workbook

Encouraging people to talk by using periods of silence or using specific phrases to encourage people to talk is an important skill to master to help people relax and encourage them to share their needs with you. There are five basic categories of phrases that encourage people to talk: ● Encouraging – ‘Can you tell me more?’ ● Clarifying – ‘How could this work?’ ● Restating (paraphrasing) – ‘So you would like to reorganise the workspace to be

more effective for project work, is that right?’ ● Summarising – The key ideas expressed by the other. ● Validating – ‘I appreciate your willingness to provide ideas to resolve this issue.’

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Tip: Leaders use inspiring language

Trevor Hill has identified this list of ‘10 Language Tips to Inspire Others’ 6. Tips like these should be used to frame your responses when providing advice: 1. Use ‘We’ rather than ‘I’.

2. Describe a compelling future.

3. Use words that appeal to the senses (e.g. see, focus, hear, grip, seize, strive, reach). 4. Use language that encourages others to look for what they want.

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5. Presuppose that you will succeed as a group; ‘When we reach …’ as opposed to, ‘If we reach …’ 6. Walk the talk.

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7. Be concise and check meaning is understood.

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8. Use ‘Yes, and …’ instead of ‘Yes, but …’ 9. Ask instead of assuming.

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10. Keep your sense of humour.

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Be a gatekeeper

Keep in mind that while you are encouraging people to take innovative and calculated risks, you shouldn’t be leaving them exposed to the risk of criticism or catastrophic failure. Make sure that people are aware of the consequences of a course of action; good or bad. They have come to you for an informed opinion and advice, so make sure that you give them that.

Hill, T., 2009, ‘The Inspiring Leader – Top 10 Language Tips to Inspire Others’, Ezine @rticles, viewed September 2014, . 6

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