Underground innovation: an opportunity not to be missed

Persoon in kamer met gereedschap aan de muur

A survey of Research & Development employees at Ford Motor Company shows that as many as 45% of them work on their own research and innovation projects in addition to their formal assignments. These innovations may well benefit the company but often remain hidden from management. What motivates employees to do this and do their 'underground innovations' hardly ever surface? Jeroen de Jong and Max Mulhuijzen of the Utrecht University School of Economics (U.S.E.) see underground innovation as an opportunity not to be missed. They identify different types of innovators and make concrete recommendations on how management can respond to each of them. There’s a lot more happening in your company than you think and you can benefit significantly from it, says Mulhuijzen. But a simple 'suggestion box' won't get you there. You have to work proactively to stimulate and value people.

The starting point of our research was an anecdote from K. Venkatesh Prasad (manager at Ford Motor Company) about a test procedure, says Max Mulhuijzen. A trainee had made a test procedure wireless by developing an app and making a Bluetooth connection, and reduced it from five hours to five minutes. A supervisor saw him using his phone and was surprised. It then turned out that the student had kept it to himself and had merely thought: 'I have solved my own problem.' The manager found it bizarre that such knowledge was being developed at a level that would never reach higher management levels.

The general perception is that companies develop innovations to increase their market share. Employees are supposed to just do their jobs. But this anecdote shows that employees are much more proactive. There seemed to be little research on this phenomenon, and certainly not on the motivation of employees to innovate underground.

Ford Motor Company

Ford Motor Company offered Jeroen de Jong and Max Mulhuijzen of the Utrecht University School of Economics (U.S.E.) the opportunity to work with K. Venkatesh Prasad and conduct extensive interviews at two locations in Germany and to do a survey at the same locations and in the UK. They interviewed 39 Research & Development (R&D) employees in Germany and reached out to 929 R&D employees in both countries to enable comparison. They found that between 2018-2021, as many as 45% of Ford's R&D employees had projects in progress that management had not formally commissioned.

Based on the interviews regarding motivation, use of materials, collaboration with others, and whether or not they disclose and follow the impact of their innovations within the organisation, the researchers made a distinction of three types of innovators. In workshops with management, support staff, and the 'underground' innovators, they explored together how these forms of innovation could be made visible and beneficial for the company.

Three types of underground innovators

Who are the innovators and what motivates them to continue working on their projects 'underground', at least for a while? The researchers distinguish missionary innovators, user innovators, and explorers.

Free hours, free time

Most employees who develop missionary and user innovations relevant to the field do so in 'free hours within working hours', says Mulhuijzen. It is a bit of a grey area to what extent a supervisor is aware of that. As long as the employees take good care of their formal assignments, supervisors know that you can keep employees happy if they can work on their own projects sometimes.

In many workplaces, people are working on projects that management knows little about, and there can be significant innovations among them.

Max Mulhuijzen

Some innovators create extra time, by sending in (wild) ideas for an innovation challenge, for example, so they can start spending a few hours a week on that but actually use that time for their own project. I have also spoken to someone who pretended to be incredibly busy but actually had spare time which he could spend on his own projects, Mulhuijzen says.

But in many workplaces, people are working on projects that management knows little about, and there can be significant innovations among them. Probably most often in the user innovation spectrum. I think it would be good if we recognised and appreciated that. Because it might also make us develop better systems for employees to report that safely and securely; companies can scale that up, and more people can use these ideas.

Not everything employees do has such a clear economic value to it either, he adds, but if employees are happy with their job, that's also of great value. They will stay with the company and stay motivated. I think we all acknowledge that if you feel comfortable, you’re better at work and, ultimately, more productive.

Encourage underground innovation

Based on their research, De Jong, Mulhuijzen, and Venkatesh Prasad make concrete recommendations that can encourage underground innovations, make them more visible, and motivate employees.

Underground innovation projects: valuable if made visible, missed opportunities if not

Many companies have something in place like an idea management system (database, forum, intranet, or idea box). Ford had that too, Mulhuijzen explains. But: it often didn't work. It was a graveyard of ideas. Half of the employees did not know about it, the other half ignored it. There was a poor response, nothing happened. So, we started looking at what could possibly work – for each kind of motivation for innovation, and elaborated on that. How can you adapt a system in which people feel more inclined to share their ideas? This is what is of most value to management. The first and most important thing is: to make such an idea management system simpler and more accessible.

Underground innovation projects by R&D employees can be valuable if they are made visible, the researchers conclude. And, they embody missed opportunities if they are not. The study shows that these underground projects do not come at the expense of employees' formal assignments. On the contrary, they often benefit the company. So, there’s every reason to encourage underground innovation.

Missionary projects that remain hidden for a long time do often still come to light but the value created by user innovations or the projects of explorers is easily overlooked. Leveraging those too may require new processes and resources - investments in solutions that deliver tangible benefits. But investing in an organizational climate open to incorporating knowledge from employees, valuing and thereby retaining staff, and fostering a stronger culture of experimentation and personal initiative is just as important.

More information

Would you like to know more about this research project? Please read the following articles.

Or contact Jeroen P. de Jong (j.p.j.dejong@uu.nl) or Max Mulhuijzen (m.mulhuijzen@uu.nl).

Please read ‘Mining Underground Innovation’ in MIT Sloan Management Review
Please read ‘Underground Innovation: Missionary, User and Lifestyle projects’