Human Resources as an Engine of Innovation

Human resource (HR) department of any company is the center of the quest for innovation. A number of studies offer empirical evidence for the importance of HR in building and sustaining competitive advantage. A long-running study by Strategy& has repeatedly demonstrated that a company's R&D spending has almost no relationship to its innovation success; rather the determinants are the alignment between innovation strategy and overall business strategy and between innovation strategy and culture. Cornell researcher Christopher J. Collins has more directly mapped the connections between HR and company performance. In a series of articles with various coauthors, reporting on studies in high-tech companies, Collins has demonstrated the links between various human resources practices and firm performance, defined in terms of stock prices, sales growth, and new products. In High-Impact Human Capital Strategy, Jack J. Phillips and Patricia Pullman Phillips look at strategic HR management through the lens of 12 forces driving changes, both in human resources management and in the market in general, from globalization and environmental matters to changes in workforce demographics and emerging skills shortages.