Underground innovation is the initiation and development of innovations by employees, (at least initially) unapproved and developed without official company resources. It was long thought that employees hid their projects to create a decent prototype and avoid termination by management at an early stage. Better show some evidence for your idea! But we find that this is not the full story. Employees innovate underground for other reasons, and organizations may not get to see all the outputs of underground processes. These topics were central to our study at Ford Motor Company recently published in Long Range Planning.
Our study at Ford Motor Company
Together with Jeroen de Jong (Utrecht University) and Brita Schemmann (HSB Hochschule Bremen), I conducted three years of research at Ford to detect why and how employees innovate underground. In 39 interviews we already found 22 employees, nearly all product developers and R&D workers, who initiated or contributed to innovations not known to their supervisors. Their innovations ranged from products, like a foldable electric bike that could be integrated into smaller car models, to processes, like VR applications to visualize the geometry of new car designs. When replicating our interviews using a survey, about 45% of our respondents reported underground innovations, including new, patented technologies. But why did employees take their innovation processes underground? We found three purposes, equally distributed over our sample, with implications for the development of the innovations and the extent to which they became visible to Ford.
#1: Innovating underground to initiate organizational change
During the development of my virtual reality technologies, I got told many times that I should stop. But I truly believe in the potential of VR and its value for the company.
Product Developer at Ford.
Some employees may internalize their employer’s drive for innovation and want to contribute but, at the same time, face limited official resources or a misalignment between their ideas and corporate strategies. In those cases, underground innovation may serve as a pathway through which employees can still elaborate on their projects. We label those projects as missionary projects. At Ford, employees engaging in such projects often strategically created extra time for themselves. For example, by budgeting a bit more hours than needed for their formal tasks, they could spend some extra hours on their underground innovations. As missionary innovations do serve the goal of initiating change in the organization, their developers would report their projects to supervisors or managers when they gathered enough data to support their claims. To increase the odds of success, they would politically engage key decision-makers in the organization.
#2: Innovating underground to implement efficiency gains
I was increasingly bothered by the limitations of the standard software provided by the company, so I started thinking about extensions I could develop myself. Due to the extensions I developed, my tasks became easier and less time-consuming.
Researcher at Ford.
Employees may also innovate underground to fix inefficiencies encountered in their work processes. They innovate for their personal use of the inventions; projects we label user innovations. This purpose can emerge from the standardization large organizations apply to their processes. Some guidelines may impose inefficiencies on employees’ tasks, and bureaucratic thresholds may be too high to deviate from the guidelines. Then, underground innovation provides an alternative pathway for employees to implement efficiency gains. As user projects address personal work problems, employees feel less inclined to share, for which these projects are less visible to the organization and, too often, stay local.
#3: Innovating underground to express one’s passion
I am triggered by the challenges I observe in daily life and get excited by the process of developing solutions. It is an inner drive for problem-solving using my technical skills. After all, that is what engineers love to do.
Product Developer at Ford.
Finally, we identified underground innovations serving employees’ passion for innovation and problem-solving: exploratory projects. In today’s competitive landscape, companies put a huge emphasis on hiring talent. However, they are not always able to fully synchronize work tasks with employees’ competencies and preferences, constraining the expression of employees’ passions and needs for cognition. This is another driver of underground innovation: exploring exciting, innovative applications not part of one’s formal job responsibilities. As employees feel highly motivated for such projects, they may even spend their leisure time and private funds elaborating on exploratory projects—while these, too, often still represent innovations inspired by and relevant to the organization. Like user innovations, those pursued for passion are not primarily targeted at benefiting the organization. As a result, they are also less likely to become visible to the organization and diffuse to colleagues.
Tapping into innovation in the underground
Most multinational organizations nowadays try bringing employee initiatives to the surface using idea management systems or ideation challenges. Our study counsels that such systems are most likely to invite underground innovations targeted at benefitting the company, leaving about two-thirds of the underground innovations out of the picture. Mining underground innovations we characterize as user and exploratory projects requires a different approach to idea management systems, which we detailed in a piece in MIT Sloan Management Review (see here: https://sloanreview.mit.edu/article/mining-underground-innovation/).
We strongly advise organizations to cast a wider net to capture underground innovations, as it is the user projects offering solutions directly helpful to colleagues and the exploratory projects representing underground innovators’ most radically innovative ideas. Underground innovation represents a hidden potential of human capital yet untapped by most organizations. Managers, start by eliciting the talent you already have on board to share their solutions for the future.
