To remain successful, organizations go to great lengths to nurture innovation – from internal start-ups to C-suite roles with the express purpose of focusing on innovation. We know the opportunity to be innovative drives employee engagement, and research shows that engaged employees are more innovative.
Employee engagement and innovation are linked
The landmark McLeod Report (2009) devoted a significant chunk of its opening chapter to explain how high levels of employee engagement are positively correlated to high levels of innovation. A case study within the report (p.23-24) details how a leading defense and support services company boosted innovation after a cultural shift that emphasized values-driven employee engagement. A MacLeod and Clarke backed presentation from 2012 reported that employee wellbeing increases performance and can be a source of growth, competitive advantage and innovation.
A study by Krueger & Killham (2007) published by the Gallup Management Journal found that 59% of engaged employees say that their job ‘brings out their most creative ideas’. Of the surveyed employees who were disengaged, only 3% said the same thing.
That is a pretty massive difference. Almost 6 out of 10 engaged employees believe their job nurtures their innovation. For employees who were disengaged, that figure was close to zero.
Of course, this is self-reporting from employees. How do management see the situation?
The Quality of Working Life 2007 study by Charted Management Institute found relatively low sickness and absence rates in workplaces where innovative management styles prevail. This backs-up assertions of correlation between innovation and engagement. Organizations that increase the wellbeing of employees by way of engagement also benefit from lower rates of absenteeism.
Other research by the Chartered Management Institute discovered ‘a significant association and influence between employee engagement and innovation’. It found that 92% of the UK managers who described the prevailing management style of their organization as ‘innovative’ felt proud to work there. 
This rightly leads to a question of cause and effect: Are managers proud of their work because it is an innovative place, or is it an innovative place because the managers take pride in their work?
In a 2010 article for the International Journal of Business Science and Applied Management, C. Brooke Dobni found ‘a distinct relationship between innovation and strategy’ and that managers can influence their innovation culture. To do this, Dobni concluded that ‘there has to be an emphasis on the employee’.
Jyotsna Bhatnagar (2012) investigated connections between work engagement, psychological empowerment, turnover intention and innovation. She found that innovation can be enhanced by cultivating a work climate that is genuinely engaging.
In 2015, Bailey, Madden, Alfes and Fletcher reported on their research into the meaning, antecedents and outcomes of employee engagement for the International Journal of Management Reviews. Consolidating the results of 214 academic studies, a major revelation of their research was a significant link between engagement and innovative work behavior.
These studies converge in their support for the emerging understanding: innovation can be enhanced by fostering a culture of employee engagement.
Implementation at your organization
So, does engagement lead to innovation? Does innovation lead to engagement?
In fact, it’s probably a bit of both.
If you foster innovation in your organization, you’ll probably find that your engagement levels benefit too.
There’s one thing we know for sure: employee engagement can be used as a lever to influence levels of innovation.
To understand how you can improve engagement at your organization, get in touch with Culture Amp. We can share the tools you need, like employee engagement survey questions, to take action and improve employee engagement.
 Kumar, V. and Wilton, P., ‘Briefing note for the MacLeod Review’, Chartered Management Institute, 2008. Cited in MacLeod, 2009, p. 12.
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