Creating a culture of innovation in today’s organisations was a major theme in this year’s Chartered Institute of Personnel and Development’s (CIPD) annual conference and exhibition held in the UK earlier this month. Set in the context of a changing business scenario where agility is deemed key to survival, the conference focused on how HR can lead in ensuring organisations are best placed to thrive in this fast-paced culture. In a keynote panel discussion on “Creating Cultures of Innovation”, speakers namely Sam Austin May, Head of HR Operations and Development (International), The European Southern Observatory; Heather Corby, HR Director, BT Innovate and Design; Vance Kearney, HR Director EMEA, Oracle; and Jane Marsh, Director of Human Resources UK & Ireland at IBM, discussed how organisations can create competitive advantage through building and sustaining cutting-edge innovation.

Business people should never be too afraid or too complacent to innovate, Oracle’s Vance Kearney, the company’s vice-president for HR, EMEA told conference delegates. Kearney explained: “Innovation is key to making the difference between success and failure. And it’s hard to innovate in a climate of uncertainty and fear. However, firms not investing in R&D fall by the wayside.”

Fellow panellist Heather Corby, HR Director at BT Innovate and Design joined Kearney and commented: “When times are hard, innovation seems to be humped down – but HR has to push the renewal cycle for organisational health.”

However, innovation today no longer simply means throwing money at R&D. It means outperforming the competition through the power of ideas in any aspect of the organisation. Heather Corby explained how BT, which has spent £5 billion on R&D in the past five years, wanted its entire workforce to consider innovative concepts. As such, BT introduced a competition in which the winning ideas from employees were taken through to a successful launch. Corby went to say that the advent of social media was having an impact on how companies built their employer reputations and the way people innovated and communicated. Jane Marsh, UK and Ireland HR director at IBM joined the conversation saying: “Innovation is about giving people the freedom to do things. The key point is often around big ideas, but it is important to get your head around the small things. And ideas will not come out unless staff feel relaxed. You can’t make an omelette without breaking eggs, but if you don’t take employees’ ideas further, you have to explain why and we need to move away from using the word ‘failure’.”

“Viewing untested ideas as experimentation – rather than projects with a risk of failure – needed to be ‘culturally accepted’,” said Ms Marsh who completed the speaker line-up.

Hence, innovation is critical for all organisations today that want to stand out from the crowd and gain that competitive edge. However, this can and will only happen through managing talent − the people who individually and collectively generate superior ideas, fresh perspectives, and new ways of doing things. Talent, and the unique culture it creates, is the main source of competitive advantage and is becoming the only real source of sustainable differentiation. Mr Kearney, the company’s vice-president for HR, EMEA emphasised: “Managing talent has become the ‘prime managerial responsibility’, as it doesn’t take long to lose the energy and commitment of innovative staff.” Kearney cited the late Apple CEO Steve Jobs as a prime example to follow, and stated: “Innovation looks like unreasonable behaviour, like an excess of ambition, a lack of patience and a sense of urgency,” he said. “But most of all it looks like strong leadership and strong vision – that is what unites people in organisations.”

Indeed, the success of Apple did not come as a result of access to special equipment, manufacturing capability, or a great location, but rather superior leadership, access to great talent, and unusual talent management approaches. Under Steve Jobs’ leadership, the team at Apple grew from a group of individual geniuses to a cohesive team that could unite itself to bring some truly unique products to the market. During an interview on managing people, Steve Jobs stated: “If you want to hire great people and have them stay working for you… you have to let them make a lot of decisions. You have to be run by ideas, not hierarchy. The best ideas have to win, otherwise good people don’t stay.”

In another interview, Steve Jobs talked with Fortune senior editor Betsy Morris and explained: “We’ve got 25,000 people at Apple. About 10,000 of them are in the stores. And my job is to work with sort of the top 100 people, that’s what I do. That doesn’t mean they’re all vice presidents. Some of them are just key individual contributors. So when a good idea comes, you know, part of my job is to move it around, just see what different people think, get people talking about it, argue with people about it, get ideas moving among that group of 100 people, get different people together to explore different aspects of it quietly, and, you know − just explore things.”

Finally, a study carried out in 2009 by the Economist Intelligence Unit and supported by the Government of Ontario, Canada on ‘Talent Strategies for Innovation’ revealed that the majority of executives worldwide recognise talent management as integral to the ability to innovate. Indeed, more than half of the respondents said that the availability of talent is the most important external factor for innovation- ahead of factors such as the business environment (41 per cent) and financial or fiscal incentives (28 per cent).

However, despite the fact that talent management is being increasingly recognised as crucial for an organisation’s capacity to innovate, it is also becoming harder to do well. Asked to name the biggest external challenges to recruiting and retaining talented staff, survey respondents cited greater competition in the global marketplace, followed by the desire of employees to switch jobs frequently, and increasing labour costs. There can also be internal, organisational barriers to successful talent management for innovation. More than one-half of respondents cited a lack of collaboration and resource sharing in their organisation as a barrier to talent management, and 44 per cent say that business strategy and talent strategy are not successfully aligned in their organisation. If talent strategy is not keeping pace with a developing business strategy, organisations will find themselves stuck with a reactive approach to talent management instead of anticipating their talent needs and planning ahead.

Great leaders who want to follow in the footsteps of the late Steve Jobs, and who want to ensure that they retain their most innovative employees, need to ensure that they know their people’s core talents, making sure that these people are in jobs that are the right fit for them and creating a new job if need be. Leaders have to make spotting and developing talent part of their job and they have to work hard at it. And finally, they have to spend a huge amount of time and energy on people because they realise that it is ultimately their people who will deliver the numbers.

Ms Camilleri is a researcher at the Foundation for Human Resources Development (FHRD)