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Knowledge Bank Workplace Innovation

Best practices and other information about Workplace Innovation and Smart Working

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  • Author: LO, the Danish Federation of Trade Unions
  • Publication date: 21 December 2007
  • Date added: 23 December 2015

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Employee-driven innovation. Trade union priority for growth and job creation in a globalized economy

2007‘Employee-driven innovation. Trade union priority for growth and job creation in a globalized economy'  is published by the LO, the Danish Federation of Trade Unions. It contains the report of a research project  and presents the policy conclusions LO connects to them in the form of an advice and tools.

2008‘Employee-driven innovation. Improving economic performance and job satisfaction ' is a sequel to the report of the LO in 2007 and mainly includes the results of three case studies: St Gobain Isover producing glass wool for insulation purposes, Vestas, a manufacturer of wind turbines and DSB a train carrier. 

Context

The challenges of a globalizing economy ask for much and good skills for innovation. The main goal is  "more and better jobs."

The secret of the good Danish competitive position is the labor market model, namely ‘flexicurity’.

The three elements of flexicurity are: 1) a high level of unemployment benefits, 2) active employment policy with continuing education as an important component, 3) a support system of collective agreements and cooperation between the social partners.

As a result, Danish workers are autonomous, they have skills to cooperate, they are open to changes in the organization and they have knowledge of customers and the development of the market demand. 

EDI

‘Employee Driven Innovation' means that employees actively contribute to and are systematically involved in the innovation process. There are also - sometimes side by side - otherwise driven forms, such as' research-driven', 'user-driven’ and ‘price-driven’ innovation. 

Research

In 2006, research to EDI  was done commissioned by LO. It consisted of a literature review, a questionnaire (with pairs of management and 'shop stewards' in 500 Danish companies/ public organizations) and 9 case studies with interviews with managers, shop stewards and employees.

The results are, in brief:

- Many companies have a focus on innovation;

- 41% of the companies involve employees in product and service innovation, 51% (also) in process innovation;

- Skilled workers are more involved; but the case studies show that unskilled workers make a very good contribution in (interdisciplinary) working groups;

- according to 58% EDI has a positive impact on the economic results of operations and according to 41% no effect.

But - as the report suggests - with 41% of companies, the performance also improved  while there was no involvement of employees in innovation. These are mostly companies where technical or research-driven innovation is important. On the other hand - as evidenced by the case studies - employees' participation in the implementation phase can be really helpful.

The authors see many opportunities for  SME’s who are skeptical now, because there are many of them in Denmark and because they may be encouraged to innovate with funds. 

Instruments / Tools

Prerequisite is an incentive culture. Then these instruments can stimulate the process of innovation:

1. Observation exercises;

2. Lean boards;

3. Suggestion box for ideas;

4. Interdisciplinary project groups;

5. Experimental workshops;

6. Self-sustaining teams.

Some of these instruments have been applied in the case studies discussed in the 2008 report. They are large, Danish, internationally operating companies. 

St. Gobain Isover

Isover is a Danish subsidiary of the multinational St. Gobain. They mainly produce glass wool for isolation purposes. They opted for an inclusive, bottom-up approach to innovation and encourage employees to work together with management in ‘cross-functional teams’. They also have an 'Innovation mailbox’ where employees can post ideas. In the committee which assesses these ideas are employees, management and a union representative. If an idea is rejected the sender will be rewarded with a gift certificate or a symbolic gift; if the idea is implemented there is a reward or bonus related to the savings or the extra income from the idea.

This strategy and method not only deliver bottom line economic results, but also a greater satisfaction, less turnover and strong loyalty. 

Vestas

Vestas produces  wind turbines. Here Employee driven innovation is part of a lean strategy. Vestas wants to be number one in the world in terms of energy supply. For that target EDI is important but EDI is also important for Vestas  to become an inspiring, challenging and attractive employer. There is an informal and non-hierarchical culture and open leadership. They applied four instruments: 1) workshops to brainstorm solutions for safety, quality, and efficiency problems, 2) change agents who act as a promoter in the initial phase of innovation, 3) cross-disciplinary collaboration and 4) lean boards where employees can post and categorize their ideas: safety, quality, etc.

EDI has contributed to the improvement of Vestas' international competitiveness and economic performance. 

DSB

DSB is an independent state-owned railway carrier, which provides about 80% of all passenger transport by train in Denmark. The tools to achieve EDI here are: self-sustaining  and the systematic gathering of ideas through lean boards. For example, the department that is doing the daily maintenance of trains, manages it self. They report that productivity has gone up and that it is very satisfactory that now their knowledge, insight and ideas are used. "You feel ownership."

The ideas are categorized on the lean board and management considers it a challenge to give them a quick follow up. 

Innovation stimulating factors

The research and case studies reveal, the following factors with a positive effect on innovation success:

- Management is in favor of collecting ideas from employees and ensures that they are applied as soon as possible and in a visible way.

- There is a broad and result oriented employee involvement in the innovation process;

- There is time and space to experiment and there may be mistakes made;

- Employees are offered the opportunity  to develop the knowledge and skills necessary to participate in the innovation process. 

Recommendations for management

Managers should 1) be open to ideas from employees and 2) show what is done with those ideas, 3) offer opportunities for developing skills 4) create experimental opportunities and 5) check  that the culture at the workplace remains stimulating for EDI. 

Reference

‘Employee-driven innovation. Trade union priority for growth and job creation in a globalised economy’. (2007) LO Danmark. The Danish Confederation of Trade Unions.

‘Employee-driven innovation. Improving economic performance and job satisfaction.’ (2008) LO Danmark. The Danish Confederation of Trade Unions.

The two reports are attached. 

Themes: Labour relations; Dynamic management & leadership; Innovation and innovation capacities;

Sector: n.a.

Source: reports, cases.