The virus COVID-19 proved Plato was right: crisis is the mother of invention. McKinsey’s new report on the Trends that Will Drive 2021 and Beyond identifies a wave of innovation and a new generation of entrepreneurs sparked by the pandemic as one of the expected trends for the new year. Companies that want to be a part of that wave of innovation will need to make sure their talent strategies align with their innovation strategies.

Our research at InnovationOne LLC has determined that one of the best traits of highly innovative companies is the way they align their talent strategies to support their innovation strategies and create robust cultures of innovation.

I will explore three areas of talent strategy that, at a minimum, need to align with innovation strategies: talent acquisition, skill upgrading, and performance management.

Talent acquisition: Successful companies have learned that they need agile talent acquisition organizations with insightful workforce planning. Innovation, by its very nature, requires acquiring new skills for the organization to be able to innovate. In highly successful companies, where innovation is a constant, workforce planning and talent acquisition departments are continually working with management to identify, find, and attract the talent who can develop and commercialize innovation.

Such efforts might include new types of engineers and other technical workers with unique skill sets required in manufacturing, quality, marketing, and sales: the whole value chain, including the supply chain.

The high-powered talent acquisition organization at this time in history needs to be agile. In addition to using top-notch applicant tracking systems and LinkedIn accounts, they also need to use AI-powered search tools to find — and retain — people with newly required skills and diverse talent.

InnovationOne’s recent research with The Conference Board found that highly innovative organizations have the ability to do this work and they also have the talent managers who appreciate how to develop new specific skills to innovate. They understand those who are diverse thinkers who bring a fresh perspective, including mavericks. Learn more about hiring and appropriately using mavericks here.

Finally, these highly innovative organizations have made recruiting a vital priority. They often do not allow anyone to interview until they have been trained for structured interviewing. As well, they use validated assessments to properly distinguish who has the necessary attributes and skills and who does not, without the bias of first impressions. Their recruiting processes have been streamlined to move quickly, and they track results to assure accuracy, speed, and that they are hiring the best without bias. You can learn more from my book Hack Recruiting.

Skill upgrading: Adapting the organization to innovate requires a significant effort in upgrading skills. In 2018, the World Economic Forum estimated that more than half of employees would need significant reskilling or upskilling by 2022, as companies transition to the Fourth Industrial Revolution.

Evidence shows that reskilling staff, rather than letting them go and then finding new people, typically costs less and brings benefits that outweigh the costs. Investing in employees can also foster loyalty, customer satisfaction, and positive brand perception.

Workforce development was a priority even before the pandemic. In a McKinsey survey conducted in May 2019, almost 90 percent of executives and managers surveyed said their companies faced skill gaps or expected to in the next five years. But only a third said they were prepared to deal with the issue. Successful reskilling starts with management knowing what skills are needed, both right now and soon; offering tailored learning opportunities to meet them; and evaluating what does and does not work. Perhaps most important, it requires commitment from the top that inculcates a culture of lifelong learning.

Performance Management: Highly innovative companies often significantly change their performance management systems, beginning with how goals are set and determining which behaviors to reward. This change usually starts with how goals are set and using a method known as OKRs, short for Objectives with Key Results.

The OKR system was started at Intel and is attributed to its famed CEO, Andy Grove. It spread to Google upon the suggestion of Google investor John Doerr.[ii]

Google explains OKRs on its re:work website in this way:

“In practice, using OKRs is different from other goal-setting techniques because they aim to set very ambitious goals. When used this way, OKRs can enable teams to focus on the big bets and accomplish more than the team thought was possible, even if they don’t fully attain the stated goal. OKRs can help teams and individuals get outside of their comfort zones, prioritize work, and learn from success and failure.”

To get started with OKRs, executives should communicate their top five strategies with their objectives and key results and milestones to be achieved during the year. This information could include revenue and profit goals, sales and marketing goals, operations improvement goals, and innovation goals. Executives should then cascade this information down through the organization with the following standard: If any employee is asked, they should be able to repeat the company’s top objectives and key results.

Click here to learn more about OKRs, which are also used by companies such as Microsoft, LinkedIn, Workday, and Netflix.

Behaviors to reinforce: Many organizations that struggle with innovation have spent their last few years consolidating operations after an acquisition and improving their operations’ efficiencies with lean sigma deployment to enhance goal achievement and financial performance—all worthwhile efforts. However, in their relentless drive for efficiency. They usually lose their culture and their ability to be innovative. Companies can have both: the achievement of this quarter’s goals and innovation.

In our experience working with companies to improve innovation, we frequently find companies need to change their behaviors to reinforce. For many, the behaviors to reinforce go from achieving 100% of their objectives to collaboration. Such companies often find that they have to change from a compliance culture (which might be described as a “do what I tell you culture”) to one that rewards suggestions and takes risks in the name of learning and innovation. Companies can’t be innovative without collaboration. Openness to new ideas means being able to take risks to learn and improve innovation—without being labeled a career failure. It also requires speed. Many organizations often change their performance management competencies to include these competencies.

Finally, managers in highly innovative companies are compensated for encouraging innovation, collaboration, rapid experimentation, and helping their employees overcome barriers. Managers are held accountable for promoting these activities as well as achieving this quarter’s goals.

High-performing companies change their team awards to include innovation projects that rapidly experiment through failures to find the best solution for innovation. They reward individuals and teams who identify problems early and collaborate with others to fix them before they become big problems. The fix often entails a series of experiments to better understand the problem and identify further solutions. Failing fast is the key to success.

The new normal is arriving now. However, it will be more of a bumpy journey full of disruption, new competition, and constant change: the type of crisis that is the mother of invention. The best preparation you can provide your company is to make sure your talent strategies match your innovation strategies.

Victor Assad is the CEO of Victor Assad Strategic Human Resources Consulting, managing partner of InnovationOne, and Sales Advisor to MeBeBot. He works with companies to transform HR, implement remote work, recruit executives, and develop extraordinary leaders, teams, and innovation cultures. He is the author of the highly acclaimed book, Hack Recruiting: the Best of Empirical Research, Method and Process, and Digitization.