Workplace Development as Part of
Broad-Based Innovation Policy
The case of Bringing the Skills and Competencies
of Ordinary Employees in Innovation
Tuomo Alasoini
Finnish Funding Agency for Technology and Innovation
tuomo.alasoini[at]tekes.fi
Paper presented at the International HELIX Conference,
12-14 June 2013, Linköping, Sweden
A brief glance at Finnish programme history
 The first publicly funded programmes to develop productivity and the quality of
working life in workplaces began in 1993 and 1996, with the launch of the National
Productivity Programme and the Finnish Workplace Development Programme TYKE.
 TYKE funded 688 projects between 1996 and 2002. The programme was evaluated
in 2002 by the Social Development Ltd., the Helsinki University of Technology, the
University of Tampere and a group of foreign experts.
 A continuation programme TYKES (2004–10) funded 1164 projects, covering 2265
enterprises and 3872 workplaces. 207,000 persons participated in the projects. The
programme was evaluated in 2010 by Ramboll Finland.
 About 70% of TYKES-funded projects achieved improvements in work productivity,
quality of products and operations, customer service and work flow. More than 50%
of the projects brought about improvements in different indicators concerning the
quality of working life (QWL). All projects were based on cooperation between
management and labour in workplaces.
 The workplaces that participated in the programmes had a lot of leeway in defining
goals and contents of the projects. Some projects also included research,
development of development methods and building of larger learning networks.
Key characteristics of the Finnish
Workplace Development Programme TYKES
 A government-funded programme (2004–10) for the promotion of
simultaneous improvement in productivity and QWL in Finnish
workplaces.
 Coordinated originally by the Ministry of Labour, later by Tekes,
with close involvement by the social partners.
 Annual budget of about EUR 12 million by the government.
 Nearly 1,200 projects in virtually all sectors of the economy
funded (focus on SMEs and growth-oriented companies).
 Nearly 90% of the funding used for work input of researchers and
consultants in the projects.
 All projects oriented to practice, research element involved in
some projects.
Towards broad-based innovation policy since
2008
 The Finnish Government assigned in 2007 the Ministry of Trade and Industry to
appoint a high-level group with the task of drawing up a proposal for a new national
innovation strategy.
 The group, chaired by former Prime Minister Aho, submitted a proposal for a new
kind of “broad-based innovation policy”.
 The central idea of the proposal involved further expanding the target of innovation
policy to give more significance to non-technological innovations and increasing the
positive joint impacts of technological and non-technological innovations.
 The proposal also placed greater emphasis on the role of customers, users, ordinary
employees and communities of different kinds in innovation.
 The Government approved the central recommendations of the strategy proposal in
October 2008.
DM
03-2013
Basic strategic choices of Finland’s new broad-based
innovation strategy (Proposal for Finland’s National
Innovation Strategy, 2008)
 Innovation activity in a world without borders: In order to join,
and position itself within, global competence and value networks,
Finland must actively participate and exert influence and be
internationally mobile and attractive.
 Demand and user orientation: Innovation steered by demand
requires a market with incentives and shared innovation
processes between users and developers.
 Innovative individuals and communities: Individuals and close
innovation communities play a key role in innovation processes.
The ability of individuals and entrepreneurs to innovate, and the
presence of incentives, are critical success factors of the future.
 Systemic approach: Exploitation of the results of innovation
activities also requires broad-based development activities aiming
at renewal and determined management of change.
Workplace innovation and development within the broadbased innovation strategy (Government’s Innovation
Policy Report to the Parliament, 2008)
 ”The perspective of working life development will be included as part of
innovation activity financing, and the development of expert services and
a broad-based innovation policy.”
 ”Special financial incentives will be increased for research, development
and innovation activities that support the reforms of organizational
environments, taking new forms of work into consideration.”
 ”New methods for spreading innovations that develop working life will be
developed extensively for the use of enterprises and other communities.”
 ”The quality of working life emerges as one of the critical factors of the
innovation environment, with a direct influence on the efficiency,
productivity and quality of operations. Innovation activity, like other
competence-based high added value tasks, is based on the employees’
and working communities’ enthusiasm, commitment and enjoyment of
work.”
Shift of policy context in workplace development
 In 2008, implementation of the TYKES programme was transferred from the
Ministry of Labour to Tekes as part of the adoption of a new national
innovation strategy for Finland.
 The strategy was based on the idea that the focus of innovation policy
should be shifted increasingly to demand and user-driven innovations
and the promotion of non-technological innovations, including also
workplace innovations.
 The task of Tekes was expanded to cover “innovative research and
development of working life” as well, and increasing productivity and the
quality of working life were included in the goals of its operations.
Funding of working life research and the
development of work organisation in Tekes
 Since the beginning of 2010, Tekes has funded a total of 224 work
organisation development projects and 275 R&D projects where
the development of the work organisation was integrated with the
development of products, services or business operations (by 6
June 2013).
 The level of funding for working life research and the development
of work organisation has been on average EUR 14 million annually.
 Companies and work organisations of all kinds are eligible for
funding; the focus, however, is clearly on small and medium-sized
enterprises which show high development and innovation potential.
The Tekes Liideri programme (2012–18) in a
nutshell
 Liideri was prepared between October 2011 and June 2012, in close
cooperation with researchers, developers, workplaces, labour market
organisations and policy makers.
 Liideri is a Finnish twist of an English word “Leader”, referring here to a
forerunner.
 Liideri is a programme for the development of business, in which companies
renew their operations through developing management and forms of working
and actively utilising skills and competencies of their personnel.
 The purpose of Liideri is to be a “next-generation” workplace development
programme that represents an approach in keeping with a broad-based
innovation policy
• at the project level, an interconnecting link between traditional objectives and targets in
the development of working life, such as work productivity, QWL and well-being at
work, and a link between them and corresponding objectives and targets in traditional
innovation policy, such as renewals of products, services and business models.
Purpose and policy context of the Liideri
programme
 The programme produces management and organisation practices,
which renew business activities and working life, as part of a
broader national working life development strategy, coordinated by
the Ministry of Employment and the Economy.
 According to the vision of the strategy, Finland will have the best
working life in Europe in 2020.
 From the perspective of the programme’s own vision, this means
that Finland is characterized by highly productive workplaces, which
bring about joy at work.
Three focus areas
 Management 2.0 refers to management principles, processes and
practices, which help an organisation to promote initiative, creativity
and innovation potential of personnel, with a view to achieving
competitive edge based on them.
 Employee-driven innovation refers to active and systematic
participation of employees in ideation, innovating and renewing of
products and services and ways of producing them, with a view to
creating new solutions that add value to customers
 New ways of working refer to work, which transcend the
boundaries of time-honoured temporal, spatial and organisational
patterns and forms of work OR which in some other recognised way
embody principles of management 2.0.
Focus area “employee-driven innovation” (EDI) in
Liideri
 EDI can be divided into
• (Institutionalised) Employee-involving innovation: solutions, which are based on
development by ordinary employees, but based on commissions by management,
customers or stakeholder groups of different kinds.
• (Fully) Employee-driven innovation: solutions, which are based on development
by ordinary employees and recognised by management and in which the initiative
originally arises from ideation by employees themselves.
• (Continuous) Self-organised remaking of jobs and activities: creative solutions,
which are designed and implemented by ordinary employees, with a view to helping
them solve problems related to their daily work in a profitable manner from the point
of view of the entire work organisation.
 EDI is here a much broader concept than “direct participation” aimed at
one’s own work duties and work environment or “continuous improvement”
taking place within limits specified by the management and aimed at
incremental innovations.
 The programme supports research, development and dissemination of
information on management processes and forms of work organisation and
working, which promote EDI in Finnish workplaces.
Employees’ role in development and innovation:
comparison of different approaches
Lean thinking
High-involvement
innovation HII
Employee-driven
innovation EDI
Practice-based
innovation PBI
(DUI/Mode 2b)
Mainly incremental
Innovation type Mainly incremental Mainly incremental
that is the
Increasingly radical
object
as innovation
capability develops
Central
Production
Learning theories
approach to
management
innovations
Incremental and
radical
Underlying
management
rhetoric
Key property
promoting
innovation in
the organisation
Rational
Mainly rational
Rationalnormative
Standardised
operational
processes
Organisational
Enabling
innovation capability management
comprising eight key
abilities
Interaction and cooperation within
the organisation
Conceptual
degree of
explicitness
A group of
principles and
generally applied
techniques
Explicit framework
Broad umbrella
Learning theories
Broad umbrella
Innovation
research
Organisational
culture
Normative
Why is employee-driven innovation an issue for
Tekes?
 Innovations are becoming an increasingly important source of
competitive edge to Finnish companies in the globalising economy.
 In the future, a growing number of innovations will be intangible and
service-oriented.
 In generating innovations of this kind, knowing the wishes,
expectations and needs of users and customers will become
increasingly important.
 As a result, the group of innovation actors will grow and become
more versatile.
Increasing importance of employees’ role in
innovation owing to three reasons
 The market will change at a faster pace: Market changes will take place
faster and they will become more difficult to predict. Being able to react to
changes rapidly requires continuous feedback from customers and users.
Employees working at the customer interface have an important role in
producing this information.
 The economy will become networked: Due to networking and
outsourcing, producing innovations will be increasingly spread out within
the business field from big corporations to smaller businesses which do not
have the same kind of specialised R&D personnel as larger companies.
They have to innovate by encouraging their ordinary employees to
participate on a broad front.
 The skills and competencies of employees will improve: The general
level of education and know-how of employees in industrial countries has
improved and companies employ more and more people with the ability to
see larger entities and participate in solving even complex problems. Many
employees already perform knowledge-intensive work that essentially
includes problem-solving.
The rationale of employee participation in
different policy discourses
Forms of
participation
Typical
objects of
participation
Rationale of
participation
Industrial relationsbased workplace
development policy
Direct and
representative
participation
Work tasks, work
organisation and
working conditions
Science and technologyoriented innovation policy
Broad-based innovation
policy
Direct and representative
participation
Employee-driven innovation
New products and
processes
New products, services,
processes, business
models, work organisation,
etc.
Employees have the
Participation helps
Participation
right to participate
- overcome employee
- is a key success factor in
through delegation,
resistance to the adoption complex environments
consultation, hearing or of new solutions.
where networking, fast
having access to
- adapt solutions,
renewal and innovation are
relevant information.
developed jointly by
central competitive factors.
Collaboration between
management and experts, - generates collective
management and
to better suit local
learning and reinforces a
employees improves the conditions by giving
sense of inclusiveness
quality and novelty value employees an opportunity among employees in
of new solutions.
to implement small
connection with rapid
adjustments.
changes.
Liideri programme’s conceptual framework for
promoting employee-driven innovation
Management
principles
Management
processes
Organisation of work
Infrastructure of work
Employee-driven
innovation
Ideation
Values and culture
that support
employees’
participation in
innovation
Innovating
Value
creation
Operational
performance
Well-being at
work
Organisational forms promoting employee-driven
innovation
 Line organisation
• Operational teams, responsible for development and innovation also
 Development organisation
• Cross-functional development groups
• Idea workshops based on broad participation of employees
• Change agent networks
 Cross-organisational networks
• Cross-organisational development, innovation and learning networks
• Interactive virtual forums (incl. social media)
Various impacts of employee-driven innovation
Operational
performance
Well-being at work
Direct effects
Improvements and
renewals in
products and
services and in
ways of producing
them
Increased
“employee-friendly”
solutions in
products and
services and in
ways of producing
them
Indirect effects
Broad-based
organisational
learning
Increased
experience of
inclusiveness in
change situations
among employees
Conclusions: what’s new in EDI?
 In relation to traditional industrial relations-based workplace
development, EDI includes a new rationale regarding employees’
participation and a new “process-like” view of QWL.
 From the viewpoint of traditional technology-oriented innovation
activities, EDI means expanding the group of relevant innovation
actors and detachment from the concept of a narrow, institutioncentred innovation system.
Conclusions: employee-driven innovation does
not equal incremental innovation
 There is no reason to limit the scope of employee-driven innovation
to incremental improvements.
 Also radical innovations are often employee-driven.
 They derive from doing something unique, valuable and difficult to
imitate or plan in detail through standard management procedures.
Conclusions: there is a need for reforming
management
 As a concept, EDI is not as management or organisation-driven as
some of its parallel concepts.
 However, this does not mean that it has no need for strong
management support.
 On the contrary, the credibility and long-term nature of the support
require management principles that recognise and acknowledge the
role of ordinary employees as active and legitimate subjects in
conjunction with change.
 Extending the reform to the principles of management is often
necessary, because internal knowledge – and in particular
knowledge that derives from lower levels of hierarchy, i.e. the shopfloor level and ordinary employees – has in many organisations
been traditionally undervalued in comparison with knowledge
obtained from external sources.
Conclusions: management reform is not easy
 It would be naïve to assume that employee-driven innovation
activities and the innovation democracy or innovation
mainstreaming that can, at best, be achieved through such activities
would be simple to implement.
 The ”technical” component of management in the form of
management skills, styles, practices, tools, etc. is closely
interwoven with the more “ideological” component deriving from the
hierarchical power and ownership structures inherent in capitalist
market economies.
 A fundamental reform in management thinking towards broad
participation of employees in innovation, for example, is not a matter
of pure technical rationality, but a matter which in many ways
touches upon the underlying power and authority relations within
companies.
Conclusions: employee-driven innovation is not a
silver bullet in improving QWL
 Without sufficient planning and managerial and organisational
know-how, attempts to promote EDI can lead to new problems in
well-being at work as well. For example
• work load will increase if innovating is mainly experienced as an extra
duty.
• employees will become frustrated if the time used for innovating and the
work contribution do not lead to visible results.
• feelings of inequality will become more common among employees if they
feel that the resources, results or effects of innovating are not distributed
equally.
• tensions and conflicts within the work community will increase and cooperation will deteriorate if innovating is not seen as a communal process.
Conclusions: broad-based innovation policy calls
for rethinking employee contribution
 Broad-based innovation policy does not refer only to a linear
expansion of the traditional innovation policy area to some new
areas.
 For example, integrating employee-driven innovation activities into
the new concept of innovation policy will also create radically new
types of question-setting.
 Responding to them will require a new kind of understanding and
competence at the policy level and open-minded rethinking of
management processes at the company level.