Workplace Innovation and Development

Towards Sustainable Productivity Growth in European Workplaces

Dr. Tuomo AlasoiniDirector, Tekes – Finnnish Funding Agency for Technology and Innovation

Project Manager, Finnish Workplace Development Programme TYKESforename.familyname@tekes.fi

What is My Background?

Ph.D. in sociology (1990) and M.Eng.Sc. in production economics (1982).

Project Manager of the Finnish Workplace Development Programme TYKES since 1996.

In March 2008, the TYKES programme was transferred from the Ministry of Employment and the Economy to Tekes – the Finnish Funding Agency for Technology and Innovation.

Director of Technology and Research Area ’Workplace Innovation and Development’ in Tekes.

Responsible for benchmarking line of activities in the WORK-IN-NET (2004-2009) project, funded within the ERA-NET scheme by the European Commission.

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Where Will Economic Growth Come From?

Income per head of the population = f (Labour productivity x Labour intensity)

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Where Will Economic Growth Come From? The Role of Labour Productivity

Labour productivity growth comes from investment in human capital, investment in new machinery, equipment and infrastructure, and technological development such as new products and new modes of workplace operation.

For the future and with the increasing knowledge-intensity of work and production, the role of technological development as a booster for labour productivity growth will increase.

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Where Will Economic Growth Come From?The Role of Labour Intensity

Labour intensity = f (Hours worked per person employed x Share of employment in the total population)

It is more realistic to increase labour intensity by raising the share of employment in the total population than to increase the hours worked per person employed.

It is more realistic to raise the share of employment in the total population by helping people cope and continue at work longer than to speed up entry of the younger age groups to the labour market.

The key issue in helping people cope and continue at work longer is improving the quality of working life (e.g. working atmosphere, work environment, management, influence and learning opportunities at work).

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Productivity and QWL – Not a Zero-Sum Relationship

From a public policy point of view, measures which can simultaneously have a positive effect on both key factors contributing to economy growth – labour productivity (through technological development, such as new modes of workplace operation) and labour intensity (through better quality of working life) – are crucial.

The relationship between improvements in labour productivity and the quality of working life is not a zero-sum game. Problems in both of them can be examined as shortcomings in the current modes of workplace operation. Practices that help solve these shortcomings can be called workplace innovations.

Workplace innovations are collaboratively adopted changes in a company’s work, organizational and human resource management practices that lead to improved operational/human performance and that also support other types of innovation.

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Project Showcase I Bromma Conquip Plant in Tampere (Assembly Plant of

Harbour Crane Spreaders)

The plant (115 employees) belongs to a big international group, which has factories also in Sweden and Malaysia.

It drifted into a downward turn in profitability and quality costs started to account for a growing percentage of turnover, threatening the prospects of maintaining the production and jobs in the long term.

The company launched a two-year development projects, in which six development groups using participatory approach and the help of outside consultants and researchers worked out 200 initiatives for improvement.

150 of the initiatives were implemented during the course of the projects, leading to improved delivery accuracy (from less than 90% to 96%) and the speed of rotation of inventories (improvement of 15%), a decline in quality costs per sales (from 4% to less than 1%) and a notable improvement in productivity (30%).

The production and jobs remained in Finland, practices for continuous improvement of operations and the work environment were established and a high-trust company culture emerged.

The cooperative spirit between management and staff for the development has continued after the project.

Project Showcase II Local Police Station in the City of Hyvinkää

A two-year development project was launched to make crime investigation more efficient and improve job satisfaction and employee wellbeing.

These two problems were intertwined, as the staff was burdened by a growing number of open cases per police officer.

A process flow analyses that was carried out with the help of external researchers revealed several bottlenecks in the overall work process.

Based on the analyses, the crime investigation process was reorganized into dedicated teams by the nature of the investigation and the office layout was changed accordingly.

As a result of the reforms, the average crime investigation time was shortened by 80%, from 55 to 12 days, and the quality of work improved, in spite of a simultaneous reduction of the number of police officers from 80 to 75 persons.

By solving the main problems in the work flow, also the work load per police officer could be reduced, improving job satisfaction of the staff.

Later, ‘the Hyvinkää model’ has been adopted by many other police departments in Finland too.

Statistically significant positive association between improvements in performance and QWL in 312 completed development projects funded by TYKES in 1996-2003 was found (Pearson r=.501)

management staff expert

Respondent group

1,50 2,00 2,50 3,00 3,50 4,00 4,50 5,00

quality of working life

1,50

2,00

2,50

3,00

3,50

4,00

4,50

5,00

per

form

ance

Different Policy Options in the Promotion of Workplace Innovation

Direct ”hard” legislative regulation: focusing directly on workplace practices.

Indirect ”hard” legislative regulation: focusing indirectly on workplace practices through, for example, changes in the labour market and the product market.

”Soft” regulation: general policy frameworks and recommendations (weak forms); training and information dissemination on ”best practices” (medium-strong forms); advisory and consultancy services, benchmarking tools and grants and development subsidies to companies (strong forms)

Deregulation

Major Thresholds for Workplace Innovation

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Lack of information: companies may lack knowledge on how to promote workplace innovation soft/weak or medium-strong.

Lack of competence: companies may be well equipped with information, but they may lack competence to bring about necessary changes soft/medium-strong.

Lack of motivation: management does not have a special incentive to actively promote workplace innovation, because the pressure on the part of customers, competitors or any stakeholder group is not strong enough soft/strong or hard/indirect.

High risks related to changes: risks may stem, for example, from long pay-back times of the investments made, volatility of the product market, or the possibility of leaks included in the actions taken soft/strong or hard/indirect.

What Kind of Knowledge Do We Need in the Promotion of Workplace Innovation?

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Design knowledge: needed in exploring the existing and the possible future states and features of workplaces by mirroring them to different theories or models of design.

Process knowledge: needed in helping workplaces find

proper ways to implement participatory processes of change on the basis of theories or models of change and intervention.

Dissemination knowledge: needed for the purpose of supporting the transfer and diffusion of experiences of new designs and processes of change outside the projects.

Examples of Contemporary Workplace Development Programmes in Europe

GER: National Framework Concept ’Innovative Development at Work – the Future of Work’ (2001-2006) and ’Working – Learning – Developing Competensices. Innovation Competence in the Modern Working World’ (2007-2113) by the Project Management Organization (PT) at DLR on behalf of the German Federal Ministry of Education and Research

FI: Finnish Workplace Development Programme (TYKES) by the Finnish Funding Agency for Technology and Innovation (Tekes)

FL: Flanders Synergy programme (2006-2007) and the Social Innovation programme (2008-2010) by the European Social Fund Agency of Flanders

IE: Workplace Innovation Fund (WIF) by Enterprise Ireland and the National Centre for Partnership and Performance (NCPP)

NL: Netherlands Centre for Social Innovation (NCSI) NO: Value Creation (VC) 2010 programme by the Research Council of

Norway NR-W: Programme ’Work-Oriented Modernization’ (MWA) by the

Organization for Innovative Employment Promotion (G.I.B.) on behalf of the Ministry of Economy and Labour Affairs of the German Federal State of North Rhine-Westphalia

SE: Knowledge Platform ’Learning and Health in Working Life’ and the DYNAMO programme by the Swedish Agency for Innovation Systems (VINNOVA)

Promoting Workplace Innovation in Europe – What Are the Major Policy Issues? (1/2)

Raising awareness of the significance of workplace innovations and building up a deliberate strategy for their promotion

Integration of policies to promote workplace innovations with industrial-policy decision making and broader innovation policy

Developmental role for the social partners, i.e. considering issues related to workplace development in other ways than those based on traditional bargaining logic

Interactive forums for learning across national borders, with a view to providing common frameworks for making the experiences of other countries more understandable and allowing for common reflection on these experiences

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Promoting Workplace Innovation in Europe – What Are the Major Policy Issues? (2/2) Importance of inclusiveness, with a view to bringing

about change in working life at large

Interplay between research and development, with a view to not only exploting existing knowledge but also creating new knowledge

Learning networks, both for information dissemination and creating learning spaces and joint development processes

Intellectual capital (in the form of innovative and inspiring visions) and social capital (in the form of trust between the stakeholders)

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