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How can HR practices support front end innovation

and increase firm innovativeness?

Annabeth Aagaard, associate professor, Ph.D. and Torben Andersen, associate professor, Ph.D,

University of Southern Denmark, Department of Leadership and Corporate Strategy

Abstract: In this theoretical review we investigate how selected HR practices can help overcome

some of the challenges European companies face in establishing a basis for continuous innovation

and thereby economic performance. In particular the front end of innovation has received growing

attention and is being emphasized as a key element in innovativeness. If HR is to support these

activities, which the function is supposedly skilled to do, but unfortunately less often involved in,

focus should be on broader issues like a team based organizing, founded on a questioning attitude

and a management style with a high level of empowerment (trust and acceptance of risk of failure).

In addition classical HR themes like recruitment, training and development have to be reinterpreted

in a context of heterogeneity and polyvalence. Finally performance management and talent

management is suggested to play a more profound role emphasizing exclusive values and rational

goal oriented behavior among employees, compared to the more inclusive mainstream values

characterizing the HRM domain. A number of key propositions are suggested to be tested in the

empirical setting of pharmaceutical industries in a future research project.

Keywords: HR practices, front end innovation, innovativeness

1 INTRODUCTION

Innovation in the broadest sense is in these days presented as the solution to recession and

extremely low growth figures at national level in many countries as well as at the aggregate

European level. Among experts, commentators and actors at the political level, there is a rather

deeply held assumption, that the lack of economic prosperity is a major problem to the majority of

European countries, and the solution is a more proactive and innovative behavior within and among

private companies (see EU 2009 and 2010). The economic crisis and recession has triggered a

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demand for radical change, where innovation and innovativeness is considered a key element in

increasing the competitiveness and thereby the reinvention of European growth or “smart growth”

as the Commission calls it (EU 2010, p. 11). In particular the more initial, and creative, innovative

processes are seen as potential solutions to the standstill of the European economies (Ernst &

Young, 2013). Turning to a more solutions oriented mode, management commentators have argued

for a necessary shift in perspective - from the narrow technological invention – to a much broader

human and social capital oriented focus (see CIPD 2012 and KPMG 2013). The shift from mainly

product and technology to human and social capital is not new, but it is still a rather vaguely

defined and randomly used in innovation literature. In many respects very similar to the assumption

held by many top managers: Social innovation and the implementation of HR practices supporting

innovation are probably good for our competitiveness. It is however rather seldom investigated

thoroughly. In this paper we therefore present a somewhat more research based approach to the use

of selected HR practices, and propose positive effects on the initial innovative activities, the front

end of the innovation.

2 WHAT DOES INNOVATION LITERATURE SAY?

When it comes to front end innovation (FEI), many nuances exist and studies cover a large variety

of geography, sectors, method of investigation and levels of analysis. Complexity is high and

“evidence” often point in different directions depending on type and location of the study. Still

several analysis highlight the importance of FEI in relations to firm performance (see Booz, Allen,

Hamilton, 1982; Dwyer and Mellor, 1991; 1995; Shenhar et al., 2002; Reid & Brentani, 2004;

Verworn et al., 2008 and Brunswicker & Hutschek, 2010). In their seminal work Cooper and

Kleinschmidt (1994, p. 26) found, that “the greatest differences between winners and losers were

found in the quality of pre-development activities”, and Reid and Brentani (2004, p. 170) even call

the fuzzy front end “the root of success”. The effects of the FEI and the decisions made “in the front

end” have high impact on the whole innovation process according to Verganti (1999).

The fuzzy front end is originally a term made popular by Smith and Reinertsen (1991) and they

describe the ‘fuzziness’ of the first activities in the innovation process, e.g. as the initial stage of a

new product development (NPD), which roughly covers the period from the generation of an idea to

its approval for development or its termination (see also Murphy and Kumar, 1997). No innovation

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is, according to Amabile et al. (1996), possible without the creative processes, which mark the front

end of the process and include the identification of important problems and opportunities,

information gathering, generation of new ideas and exploration of the validity of those ideas (see

also Dyck & Allen, 2006). Several authors have tried to define FEI, e.g. Coopers (1988) four phases

- the generation of an idea, initial screening, preliminary evaluation, and concept evaluation. Koen,

et. al.’s, (2002) focuses on the activities coming before the formal and well-structured NPD, and

Tatikonda and Rosenthal’s (2000, p. 402) project approach to front end activities (planning and

execution). The understandings of what FEI processes covers, and what should be included, varies a

lot among researchers (see also Zhang & Doll, 2001, and Nobelius and Trygg, 2002). However they

tend to agree on the initial time positioning of the activities, taking place before other activities and

they tend to include creative elements.

3 HRM IN SUPPORT OF FEI, FIRM PERFORMANCE AND INNOVATIVENESS

Focusing on the overlap between innovation- and HRM-literature, innovation researchers have

already from the mid1980s focused on HR practices as a key to successful innovation (e.g.

Wozniak, 1987 and Roberts 1988). Leede and Looise (2005, p. 111) actually claim, that innovation

researchers over time have shown more interest in HRM than vice versa, and it seems plausible –

looking at the number of articles from innovation literature incorporating HR themes. But still it is

only recently that efforts have been made to identify and describe more precisely the nature of the

relationship between the two areas (see Laursen and Foss, 2003, Jimenez-Jimenez & Sanz-Valle,

2005, 2008). Several studies suggest that an internally consistent HR system, characterized by a

horizontal fit, which emphasizes investments in human capital, compensation of people for

performance, and commitment to team development, is critical for the success of innovation-

oriented firms (Lado & Wilson, 1994; Muffatto, 1998; McMahan et al., 1999; Searle & Ball, 2003).

However, many of the studies are placed at national level, both inside and outside of Europe, and

they tend to present rather diverse and at times contradictory findings, when it comes to which

practices to use. E.g. Laursen and Foss’s (2003) survey of 1,900 Danish companies revealed that 7

out of 9 HR practices applied by manufacturing companies had resulted in superior innovative

performance. These findings were supported by the survey study of Lau and Ngo’s (2004), of 332

firms in Hong Kong, and the study of Katou and Budhwar’s (2006) performed in a Greek

manufacturing context. Furthermore, the Shipton et al.’s (2006) longitudinal study of 22 UK

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manufacturing companies showed that training, introduction, teamwork, appraisal, and contingent

reward, when applied together with exploratory learning focus, were positively associated with

innovation in technical systems. In addition, the survey study by Selvarajan et al. (2007), of 246

firms in Ireland, revealed that the human capital philosophy of a firm had a positive impact on its

innovativeness and performance. Generally, it appeared from the literature that the impact of HR

practices on innovation offers conclusions in a specific national context, and that a sector

differences seems to exist – e.g. when the link is more explicit in the manufacturing than in the

service sector, performance consequences are larger. Working at a more general level Jørgensen et

al. (2008) and de Leede and Looise (2005) have tried to develop more generic conceptual models

illustrating the potential role of HR in supporting continuous improvement, without any reference to

sector or country. However it still remains an open question as to if there depending on the specific

situation and context exist a set of successful HR practices, or HR bundles as they also have been

mentioned in the classical HR literature. Wright and Snell (1998) suggest that in order for HR to

have effects on firm performance, there must be an alignment of different components of the

organization, including different HR practices, the necessary skills and knowledge possessed by

employees, a motivated workforce, and a value-added strategy.

Much of the literature focusing on HR bundles claim, that it is not fruitful to examine just a single

type of HR practice and its effect on a firm’s performance. Instead, combinations of HR practices

and their contingent effects have to be analyzed (Wright & Boswell, 2002; Bowen & Ostroff, 2004).

Sheppeck and Militello (2000) stress, that not only are different HR configurations needed to

achieve a high level of firm performance, but different types of HR practices also generate different

firm outcomes. From a resource-based view, De Saa-Perez and Garcia-Falcon (2002) demonstrated

that an appropriate HR system creates and develops organizational capabilities, which become

sources of competitive advantage. In other words, companies’ choice concerning use of different

HR practices configured in the right way, do influence performance, and we tend to believe that the

same could be the case for front end innovation and innovativeness.

Summarizing on the above literature review, the role of HRM on firm innovativeness, and on FEI

which is the important antecedent for innovativeness, is fundamental to overall long rum firm

performance. In this respect it is no different from the supposedly positive effects of HRM in

general on firm performance. Yet, the impact of HR practices, i.e. the potential combined effects

have received relatively limited attention in the innovation literature.

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HR’S CONTRIBUTION TO FEI

4.1 Management style based on empowerment

The importance of empowering employees has been studied for several decades, and even though

the concept is multidimensional and difficult to investigate (see Al Zarooni, 2012), the basic idea is

that a general management style should be applied, where participation and involvement is central

elements. I.e. more decisions are to be taken locally, and managers have to trust employees, and

thereby practice a management style, where employees know that errors will be followed by

forgiveness, rather than a style where, on-going control is a recurring element. Willingness and

courage to participate in innovative activities among managers and employees is of course highly

important if FEI activities are to succeed (Ahmed, 1999).

Several empirical studies have examined the link between empowerment and innovation in general.

Mazzanti et al. (2006) found in at a more aggregate level - the food sector in Italy - that a good

industrial relations environment and employee involvement stimulated organizational innovation. In

an Asia context, Tsai’s (2006) study of the semiconductor design industry in Taiwan, showed that

effectively use of employee empowerment practices was positively related to innovation. Zeffane

and Al Zarooni (2012) showed that both empowerment and trust had an impact on people’s

commitment and performance. In particular when participants experienced feelings of high

centrality of their work-unit (in contrast, to where they experienced feelings of low centrality).

4.2 Promoting an innovation culture

Numerous authors have stressed innovation culture and climate as essential factors in supporting

innovation and front end of innovation in theory and in practice (e.g. Muffatto, 1998; Isaksen &

Lauer, 2002; Martins & Terblance, 2003; Chan et al., 2004; Gertsen et al., 2006; McLaughlin et al.,

2008; Tellis et al., 2009). Schein argues, that management should promote a culture, with shared

values which consistently favors innovation (Schein, 2004, p. 124), and in the study by Tellis et al.

(2009) covering 759 firms across 17 major economies, corporate culture is the strongest driver of

radical innovation. Klein and Sorra have a somewhat broader approach: “A culture which fosters

innovative behavior, a continuous search for creative solutions to problems, by ensuring the

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necessary employee skills, providing incentives, and removing obstacles” (Klein & Sorra, 1996).

Having a culture that support innovative behavior is especially important to the early and

intrapreneurial stages of innovation as resembled by front end of innovation. We will discuss the

skills and incentive element below. When focus is on front end innovation, an important element is

also to develop a continuously investigating and questioning attitude among employees, i.e. cultural

values of a growth and development leading to innovation (West, 2002; Miron et al., 2004).

According to West (2000) climate and culture are intimately linked and represent elusive concepts.

Although there is no shared agreement on what exactly they constitute, Martins & Terblance have

suggested that organizational culture can be described in terms of values, norms and beliefs, while

climate can be considered in terms of policies, practices and procedures (Martins & Terblance,

2003). The former could be seen as a more indirect outcome of the latter, and the three p’s are

indeed placed in the HR domain.

4.3 Team organizing

The use of teams as a basic organizing principle in innovative companies has received excessive

attention, and several studies have revealed that teamwork plays an important part in eliciting

innovation (see Ledford, Lawler & Mohrman, 1995; Norrgren & Schaller, 1999; McDonough,

2000; Leede et al., 2002; Kratzer et al., 2005; Cabrales et al., 2008; Barczak et al., 2010). In

addition team cooperation, communication, and conflict resolution are critical dimensions in teams

with an innovation expectation (Beer & Eisenstat, 2000). Teams provide conditions for a fluid and

dynamic mixture of ideas and ways of work and make available complementary competencies and

disciplines that favour front end innovation (Fong, 2003).

Looking at the potential overlaps to other HR practices Cabrales et al. (2008) found, based on a

sample of 95 companies from four innovative industries, that team diversity and the combined use

of long- and short-term incentives were associated with incremental innovation, whereas the

development of risk-taking attitudes in the team is associated with radical innovation. Terziovski et

al. (2002) found, that the most significant success factor of innovation was the establishment of

cross-functional, multi-disciplinary teams as product innovation is a knowledge intensive process

(see also Nonaka & Takeuchi, 1995). In particular when focus is in front end innovation, one of the

main challenges will be how to challenge taken for granted assumptions, mainstream thinking etc.

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In other words teams have to be based on people with a relatively high diversity across function,

units or cultures.

4.4 Recruitment and selection – new knowledge

The human aspect of innovation is initially based on selecting not only appropriately skilled

employees, but also individuals with attitudes which support knowledge sharing (de Winne & Sels,

2010). Shadur and Snell (2002) emphasize that HR practices can play a role in stimulating

innovation by sustaining processes of knowledge creation, transfer and integration. Staffing is

considered key HR practice for innovation, and this includes access to external sources of

recruitment (Raghuram & Arvey 1994), the selection of people based on their polyvalent skills

(Gupta and Singhal 1993), or the fit to organizational culture (Jones and Sullivan 1994). All this is

carried out with the purpose to obtain self-confident, risk adaptive and involved employees, who

favor innovation (Jimenez-Jimenez and Sanz-Valle, 2008, p. 1211). A broad range of people and

ideas is the basis for creativity and front end innovation in the initial phases of the innovation

process (DeCusatis, 2008).

Recruitment and development practices has some overlap with more modern talent management

literature, as mentioned by Al-Laham et al. (2011): To optimize the benefits from existing human

capital, firms must frequently gain access to new knowledge by hiring experienced talent, i.e.

recruitment has with the arrival of talent management been elevated to a more strategic level, where

innovation plays an increasingly important role.

4.5 Training and development – an investment approach

There are particularly three sets of HR practices have been highlighted in the literature that would

support creativity and front end innovation: (1) Training-focused: an emphasis on skills

enhancement and human capital investment, (2) Performance-based reward: an emphasis on

rewarding employees’ contributions and outcomes and (3) Team development: leadership and team-

based activities are extensively developed and carried out. These three sets of HR practices are

critical in developing cross-functional teams of innovation-oriented organisations and are often

interrelated and reinforced by each other (Norrgren & Schaller, 1999; McDonough, 2000). An

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investment oriented approach to human capital (see e.g. Pfeffer 1998), is often emphasized as a

basis for innovative behavior. Training and development has been seen as the key role of optimizing

the fit between present and requisite knowledge and skills, thereby also contributing to performance

and knowledge creation processes (de Winne & Sels, 2010). High-performing organizations tend to

spend more time on education and training, especially on communication and team skills (Valle et

al. 2000 and Leede, Looise and Alders 2002).

Training also enhances the transfer of knowledge (Sparkes and Miyake, 2000), which is a key

element of facilitating innovation. Leede, Looise and Alders (2002) found that high-performing

organizations spend more time on education and training, not just within technical, task-related

skills, but also on communication and team skills. Regarding training, some studies argue for the

importance of the broad application of training in order to develop the employee skills and

knowledge needed for innovation (Ding and Akhtar 2001; Laursen and Foss 2003; Mark and Akhtar

2003). This type of training has the potential for providing polyvalence skills (Sundbo 1999), and

combined with a team- and long-term orientation and allowing the participation of employees in the

design of training activities (Nonaka and Takeuchi 1995). Walsworth and Verma’s (2007) study of

international firms in a Canadian context showed, that training was more beneficial for innovation

than both employee involvement and variable pay.

4.6 Performance management – rewarding innovative behavior

A large part of the literature on HR practices and innovation has – implicitly or explicitly - focused

on rewards, recognition and acknowledgement as a driver for innovative behavior (see Guest, 1997

and Guest et al., 2003; Hauser, 1998; Sarin & Mahajan, 2001; Searle & Ball, 2003; Bae et al.,

2003). And the increasing attention on managing employee’s performance has strengthened this

even more. In a qualitative study of 97 companies, in the three most innovative Spanish sectors,

Camelo-Ordaz et al.’s (2008) showed that financial reward for innovative ideas in the front end of

innovation was the engine for much creativity. Top management strategic vision concerning

innovation could not on its own explain a company’s performance on innovativeness (Camelo-

Ordaz et al. p. 620). This finding is supported by Cano and Cano’s (2006) survey, also in Spain (a

study of 367 industrial firms), which revealed that financial reward and public recognition for

achieved performance were the most effective HR practices stimulating innovation.

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The studies on innovation-related appraisals address the problematic choice of level of entry– e.g.

are performances appraisal effective at individual or collective level? Cabrera and Cabrera (2003)

found in their study, that team-based appraisal followed by performance pay were potential

mechanisms to steer employees’ behavior in the desired ‘creative or innovative’ direction and

reinforce collective goals and mutual cooperation. Except for suggesting that performance

appraisals and management are informal and important (Verburg et al., 2007), none of the existing

models or theories expands to any extent on how these appraisals should be conducted in order to

support innovation across company size, sector and age (Kesting et al, 2011), and the problem

becomes even more pronounced when focus is on FEI. How to design performance management

systems, which promotes highly diffuse activities like FEI, is not easy.

4.7 Talent management – focus on specific, targeted people

Talent management literature has since the arrival in the late 1990s to a high degree been resting on

the assumption, that knowledge is created by, and stored within, individuals (see also Grant 1997).

A growing body of the literature on the new economy emphasize that classical resources by

themselves rarely are a source of competitive advantage (Ray et al., 2004). This is more likely if the

companies’ knowledge base and resources are deployed to affect a desired end, and when they are

developed through, or supported by, business processes and management practices (Ireland, Hitt

and Sirmon 2003). Thus, the right human capital can contribute to, and is perhaps the most

important single factor in the firm’s innovative capacity, success and viability. The nourishment of

innovation champions through talent management is a key element in successful innovation

(Markham & Griffin, 1998; Jenssen & Jørgensen, 2004).

Talent management is an example of a more structured and targeted way to work with human

capital. When the focus is on FEI this pulls in direction of a more strategic and broader recruitment

base, i.e. not just including “company man”, the coming stars, but also people who perhaps live in

the periphery of the organization, being less socialized into main company norms and routines. Also

taking into consideration that the environment for most organizations today is global, complex,

dynamic, highly competitive and extremely volatile (Ernst & Young 2013). Organizations

recognize that they have a critical responsibility to recruit, develop, deploy, manage and retain their

most valuable asset, namely talent (Cappelli, 2008).

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Figure 2: Overview of HR-practices suggested supporting front end innovation

5 DISCUSSION

The literature review illustrates several overlaps between the two research fields HRM and

innovation management/front end innovation and between the different HR practices presented as

potential “solutions” to FEI. One could easily also come to the conclusion that more HR practices

would lead to larger chances for successful FEI. It is however not our aim to present a best practice

for HRM supporting FEI. Probably there are mutual positive reinforcing mechanisms and potential

synergies between various practices, but this can be uncovered in future research as suggested later.

Promoting an

innovation culture

Training and

development – an

investment

approach

Team organizing

with a high input

of diversity

Talent

management –

focus on specific

targeted people

Performance

management –

rewarding

innovative

behaviour

Management

style based on

empowerment

Recruitment and

selection – new

knowledge

Support of

front end of

innovation

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More practices could have been mentioned taking into consideration how many themes HRM

literature has been treating, but in an attempt to focus the study on the factors most often addressed

and discussed in literature the seven categories were selected. These categories also touch upon

many of the sub factors within the same category. For example the category, Team building, also

include team trust, team incentives and team communication. The challenge of capturing the

essence through categorization of extensive research areas is always the risk of leaving out certain

factors. It is therefore the aim of this study to present the frame for an empirical study of the HR

practices, which actually support front end innovation and firm innovativeness in practice.

In the literature review different aspects and views on supporting factors were identified. While

some studies claim a certain group of HR practices and activities to be critical for innovation, other

studies ignore the very same factors and present different ones to be decisive. Moreover, studies can

differ in terms of causal links. This dispersion of outcomes may have several reasons, e.g. the

heterogeneity regarding samples and methods. The samples differ as some studies investigate one

company or specific industry, whereas others cover several industries. The methodologies applied

in studying supporting factors also differ, as some studies are qualitative, while others adopt a

quantitative approach. In addition, different ways of assessing (degrees of) success and support are

utilized. Such heterogeneity adds to divergent views. Moreover, there tends to be little effort among

the various contributors to assess (causes of) differences between the studies or as Crawford (1987:

22) puts it: “None tried to compare, except to themselves”. The implication of this finding is to try

to compare the results of different studies and potentially maps the generics findings that go across

industries and companies and then to identify the specific practices that differ between industries

and that have a unique impact on the front end of innovation for individual industries.

A number of researchers suggest that there is a problem with the overall body of research on

innovation management and firm innovativeness (e.g. Dougherty, 1996; Tidd, 1997; Bassett-Jones,

2005). In addition, a preliminary observation at this point is that the terminology of the FEI and

what constitute the front end of innovation varies among researchers (Zhang and Doll 2001;

Nobelius and Trygg 2002; Bröring, Cloutier and Leker, 2006). In the study by Koen et al. (2001)

eight companies attempted to collectively determine the best practices of the FFE of innovation.

Comparing one company’s processes to those of another proved insurmountable because there was

neither a common language nor clear and consistent definition of the key elements of the front end.

For example, Tidd (1997, p. 1) notes that the field is “highly fragmented…much of the research has

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been conducted within three separate disciplines with relatively little overlap or interaction”. Other

reviews of the literature have come to a similar conclusion (Dougherty, 1996). The implication of

this finding stress the need to map a definition of front end of innovation that can go beyond

industrial difference and provide the possibility for comparisons between the FEI processes of

different industries.

The empirical study by Bröring, Cloutier and Leker (2006) of 54 R&D projects showed, that there

are differences in the FEI approaches among various companies. Innovation projects follow a

specific approach in the technology-intensive pharmaceutical and chemical companies, which

differs from the fast-moving consumer goods industry and may therefore imply that different HR

practices support innovation in the specific industries. Nobilius and Trygg (2002) among others

have criticized the research strands which focus on determining key factors and optimal processes

for various kinds of innovativeness in any industry. This view is supported by Shenhar (2001, p.

395), who states that, “the literature assumes that one size fits all”. Both Shenhar (2001) and

Söderlund (2002) stress the need to take into account the differences in the structural and

environmental factors of innovation projects and HRM activities. These findings indicate a need for

some sort of categorization of industries and innovation processes with similar characteristics, to

enhance the possibility for homogeneous findings and generalization within the industry and

process categories.

6 CONCLUSIONS AND FURTHER RESEARCH

How can HR practices support FEI, or put more precisely: which practices do we expect to work in

a positive way on firm innovativeness? First of all we propose that focus should be on broader

issues like the promotion of an empowerment based management style, team organizing founded on

a questioning attitude and an innovation culture with a high level of trust and acceptance of risk of

failure. Secondly classical HR themes like recruitment, training and development have to be

reinterpreted in a context of heterogeneity and polyvalence (Bruland and Mowery 2005) to initiate

creative solutions. Finally performance management and talent management is suggested to play a

more profound role emphasizing excluding values and rational goal oriented behavior among

employees, compared to the more egalitarian values characterizing the HRM domain.

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Our overall conclusions are based on a literature review, and even though the overlap between the

two fields HRM and innovation management is relative well developed, there seems to be room for

improvement, when it comes to integrating the two, in particular in mapping the support of the

initial innovative processes in firms – the FEI. Seen from a European perspective there is right now

a search for more knowledge and new models, where firms have to redefine their roles as key

players in what EU calls the new knowledge and innovation society (EU 2010). It is in many

respects leading to a broadening of the innovation concept as such, bringing in human capital and

social innovation considerations, also in the area of front end innovation.

6.1. Future research

Front end innovation in general has been stressed as a key element in a company’s innovation

success and firm performance by several authors (e.g. Shenhar et al., 2002; Reid & Brentani, 2004;

Verworn et al., 2008 and Brunswicker & Hutschek, 2010). The literature review has revealed seven

key focus areas of HR in facilitating front end innovation. These findings represent a generic picture

of HR facilitation of FEI. Future research based on this theoretical study, should therefore take

these theoretical findings into a specific industrial setting to explore the HR and front end and

innovation relationships in a practice context.

It appears that front end of innovation is particularly critical in industries with long R&D cycles,

e.g. the pharmaceutical industry. Furthermore it appeared from the literature review that particularly

research concerning the role of HR practices in facilitation of pharmaceutical companies’

innovativeness and FEI was very limited. FEI is unique in pharma compared to other industries due

to the extreme duration of this industry’s FEI process, which constitutes up to 5 years (the entire

R&D process often lasts between 10 and 12 years). Furthermore, pharmaceutical FEI is science-

driven and not customer-driven and highly controlled and regulated by public authorities. In

addition a newly discovered therapeutic agent with “blockbuster potential” still faces more than a

90% risk of failure during the development phase (Duyck, 2003), where the fully loaded cost for

development of the agent amount up to about $1.7 billion (Herson, 2005). Hence an enhancement of

the discovery process and FEI ought to be an immediate priority area for HR and management in

pharmaceutical companies (Aagaard & Gertsen, 2011). This could provide interesting evidence on

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how HR practices could be linked to specific sectors, i.e. do they have any effect, and if so how and

in which combinations?

The theoretical study provides a number of suggestions for key HR practices supporting front end

as presented in figure 2. The overlaps between the factors illustrate how many of the functions may

individually and in combination provide active support for different elements of front end

innovation. Whether in generating employee empowerment and a culture supportive of innovation,

and/or the recruitment, training, talent management, performance measuring and team building of

innovative ressources and innovation competences. The level of impact of the specific HR function

on front end of innovation may be evaluated on actual effect and impact on the success of front end

of innovation based on three impacts levels: low, medium and high impact. This is illustrated

through the arrows in the figure, where high impact is resembled by a full arrow and medium and

low impact levels are illustrated by medium to short arrows. Based on the literature review we

therefore want to examine the following propositions in a pharmaceutical, empirical setting and

relations to actual impact level (low, medium, high impact):

Proposition 1: A high level of empowerment of employees and managers within units practicing

front end innovation, can significantly enhance the level of front end innovation

Proposition 2: Actively supporting an innovation climate and culture can significantly enhance the

level of front end innovation

Proposition 3: A high level of team collaboration and team building can significantly enhance the

level of front end innovation

Proposition 4: Performing targeted but diverse recruitment and selection can significantly enhance

the level of front end innovation

Proposition 5: A high level of polyvalence in training and development can significantly enhance

the level of front end innovation

Proposition 6: Talent management programs based on a broader variety of sources can

significantly enhance the level of front end innovation

Proposition 7: Applying performance management systems where bonuses are tied to more radical

changes and risk taking can significantly enhance the level of front end innovation

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5. Limitations

The limitations of this study also imply new avenues of further research. For one, we have only

included seven categories of HR practices in support of FEI. As the literature and research within

the fields of HRM and innovation are extensive, more categories may be identified, although we

have attempted to group and categorize the most frequently mentioned in literature. An interesting

study would be whether some of these HR activities have a higher impact on firm FEI and

innovativeness than others? Or, are some HR activities are more critical in some types or sizes of

companies? And how can you measure the actual effects of HRM activities on innovation in

practice?

Secondly the seven identified HR practices have not, to our knowledge, all together been tested in a

specific empirical setting. This we would like to compensate for through an empirical case study of

the effects of applying the identified categories of HR activities on FEI within pharmaceutical

organizations. Due to the limited number of thorough studies on HR bundles of practices supporting

FEI our propositions becomes rather speculative, but informed by earlier “related” studies.

HRM has a prominent role within this knowledge-intensive industry, where recruiting, selecting and

developing the right employees and skills are critical to the success. The HR functions of

particularly medium to large pharmaceutical companies are therefore often quite extensive and

resourceful and may be applied more effectively in actively supporting FEI and firm

innovativeness. Yet, the ‘uniqueness’ of pharmas’ use of HR practices in innovation support could

be studied in a comparative study with case studies from other industries.

Thirdly categorizing HR activities from very different types of studies does present the issue of

missing out on the unique contributions or characteristics of the settings that the HR activities have

been identified within. Yet, in categorizing processes this is necessary. In a cross-company study,

differences in key HR categories could very well be studied, in an attempt to reveal potential

differences in applications and effects of applying the different categories of HR activities.

Finally we have no country and national cultural considerations in our propositions, and they are

indeed based on the assumption that pharmaceutical companies are large global players

characterized by limited, national cultural effects when it comes to their R&D activities. This is a

16

serious and important limitation, which we will address in the follow up study. We do have a

hypothesis that European pharmaceutical companies operate much differently than US based

companies. This will be investigated further in the study.

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