IoT Forces Manufacturers to Build HR Programs That Enable Innovation

Not since the development of the steam engine by Scottish inventor and mechanical engineer James Watts in 1765 have we seen such a dramatic disruption of the people side of manufacturing as we will with the Internet of Things. In an IoT world, it is expected that nearly every object, device, and consumer good will be connected to networks or the public Internet. By connecting billions of everyday devices to the Internet, the IoT merges the physical and online worlds, creating new capabilities and opportunities, as well as new challenges for organizations. These challenges include people.

In How Smart, Connected Products are Transforming Companies, co-authors PTC CEO, Jim Heppelmann, and Harvard Business School professor, Michael Porter, posit that there will be three shifts in HR that the manufacturers of smart, connected products need to account for in their strategic approach to IoT. These shifts include new or changing approaches to who and how organizations attract talent (expertise), new norms, values, and unwritten rules for how work gets done (culture), and a need for more flexible approaches to the way in which IoT workers who develop IoT products are compensated.

Few would argue with the notion that we are at the start of another Industrial Revolution. The rise of smart, connected objects will indeed rival past technological marvels. However, as with the Industrial Revolution, it’s important to recall that the driving force behind the disruptive shifts IoT introduces to manufacturing is innovation. Innovation, however, requires diversity of thought and experience, not to mention a safe environment for voicing opposing views, as well as a collective mindset that cultivates and welcomes varying perspectives.

Innovation begins with culture – the shared, (often unconscious) understanding of the values and beliefs that provide the unwritten guidelines and rules for behavior (norms) in an organization – but innovation cannot exist without great people. To be fully prepared to deliver on your organization’s IoT strategy, you must weave a focus on innovation into every aspect of your people strategy. Here are just a few examples of ways every HR leader can infuse their HR programs with innovation:

Characteristics and Traits of HR Programs that Support Innovation

Encourage employees to take risks. Organizations with cultures that truly embrace failure and encourage risk-taking are significantly more agile and innovative than those that don’t. Livio Simone, former CEO of 3M, an organization well-known for its cutting edge innovations, was once quoted as saying that innovations are simply chance breakthroughs. He said that when you take a chance, “there is always the possibility of a failure.” Failure should be treated as a learning experience.

Hire for innovation capabilities. Without creativity, innovation cannot occur. Look for individuals who are creative (possibly with non-traditional degrees), adaptable, strong problem solvers, and embedded in diverse networks.

Create a physical work environment that supports innovation. Work environments with few assigned desks, comfortable seating areas, and plenty of relaxed gathering spaces (both inside and outside an office), can support innovation while still offering choices to employees. However, be careful with open spaces, which seem to be all the rage right now in Silicon Valley. They may backfire on you.

This is the seventh installment in a series of guest posts by leading industry analysts covering topics found in the new Harvard Business Review article, How Smart Connected Products are Transforming Companies, co-authored by PTC CEO, Jim Heppelmann, and Harvard Business School professor, Michael Porter.

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