Social innovation in a complex financial business environment : a case study on how bank employees experience the possibilities of participating in social innovation

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Final version

MASTER THESIS

Social innovation in a complex financial business

environment

A case study on how bank employees experience the possibilities of participating in

social innovation

Name:

Vereena Schoonen

Student number:

10824057

Program:

Executive Program Management Studies – Strategy Track

Supervisor:

Ed Peelen

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Social innovation in a complex financial business environment - Master Thesis 2017

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Statement of Originality

This document is written by Student Vereena Schoonen who declares to take full responsibility for the contents of this document.

I declare that the text and the work presented in this document is original and that no sources other than those mentioned in the text and its references have been used in creating it.

The Faculty of Economics and Business is responsible solely for the supervision of completion of the work, not for the contents.

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Social innovation in a complex financial business environment - Master Thesis 2017 4 Pa ge

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Table of content

1.Abstract ... 5 2. Introduction ... 6 2.1 Research question ... 7 2.2 Thesis structure ... 9 3. Literature Review ... 9

3.1 Definition of social innovation ... 10

3.2 Creativity ... 12 3.3 Motivation ... 13 3.4 Autonomy ... 15 3.5 Environment ... 16 4. Methodology ... 18 4.1 Research design ... 18 4.2 Data collection ... 20 4.3 Analysis ... 22 5. Results ... 23 5.1 Creativity ... 24 5.2 Autonomy ... 28

5.3 Motivation and social behavior ... 31

5.4 Target culture ... 34

5.5 Factor of Age ... 35

6. Discussion ... 38

6.1 The influence of the environment ... 39

6.2 Bounded autonomy ... 40 6.3 Motivation is makeable ... 42 6.4 Experience... 43 6.5 Limitations ... 45 6.6 Further research ... 45 6.7 Managerial implications ... 46 7. Conclusion ... 46 8. References ... 49 INTERVIEW TRANSCRIPTS ... 51 9. Appendix ... 173

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1. Abstract

This research provides valuable insight into the phenomenon of social innovation, particularly because the existing literature supplies only a limited discussion about social innovation. As with any innovation, social innovation is triggered by factors. This case study explores the factors that influence social innovation within a complex, financial business environment. This research utilises an inductive and exploratory study. First, the current literature on social innovation is reviewed to provide a basis for the definition of social innovation, and the framework of the study. Second, these findings are tested and extended through a case study, which is conducted through interviews within three teams in the same bank. Finally, the results of the case study are analysed. The results indicate that a work environment’s influence on social

innovation is significant; the environment is thus a dependent variable of social innovation expression. The research presents new insights about factors that can influence social innovation in the workplace, and contributes the influence of age and experience on social innovation to the current literature.

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2. Introduction

Panama-papers; greed culture; massive financial bonuses for top managers; mass-reorganisation causing job losses—these are just a few keywords that automatically invoke the financial industry and banks in particular. Due to the many scandals in this industry over the past decade, banks are suffering the loss of society’s trust in the financial sector, which results in damaged reputation. Banks are under pressure to renew their image and to reconnect with society. This pressure is increased under the supervising authority, of De Nederlandse Bank. This authority pressures Dutch banks to change their culture to

eliminate excessive risks taken by banks and reclaim society‘s trust. To successfully work towards renewing society’s trust, banks must demonstrate their social awareness. Social innovation—as a way of including the social process of innovation by combining innovation with public needs—can help banks renew society’s trust.

The phenomenon of social innovation is central in this thesis research. Social innovation is a rather new topic in scientific literature and therefore different opinions exist on how to outline this type of innovation. The term ‘social innovation’ itself suggests that its meaning contains some concept of innovation, which can refer to a new idea, device or method. The word ‘social’ suggests that there is a social aspect to this innovation. ‘Social’ commonly indicates that something is meant for public use, or for a group of individuals. However, to better understand what social innovation refers to, it is helpful to look at some examples. Self-help health groups and self-built housing, as well as neighbourhood wardens,

Wikipedia and the Open University, are commonly recognisable social innovations. These associations started as new ideas to address pressing and unmet (collective or social) needs and improve peoples’ lives (Mulgan, G. et al. 2007). If social innovation can create these innovative yet socially serviceable projects that are well known, profitable, and used by the public, but still serve a common social need, then it seems evident that social innovation can be impactful on a large scale. Therefore, the research analyses the possibility that banks could use social innovation to renew their image, by reconnecting with society once again. The question of whether social innovation can flourish in a complex financial business environment

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is also addressed in the effort to identify factors that influence organisations or employees to produce a socially innovative project.

Current literature focusses on the definition of social innovation and the debate of whether social innovation is a phenomenon of its own, or part of other types of innovation (Pol and Vil, 2009; Mulgan, et al., 2007; Cajaibana-Santana, 2014). The field’s rapid development during the last decade has primarily included practical issues from descriptive case studies, along with the creation of concepts, definitions, research settings and theoretical boundary conditions. The literature review chapter further explores a suitable definition for social innovation, abstracted from the current literature and the factors that

influence social innovation. Current research indicates that autonomy, pro-social behaviour, and creativity influence social innovation in groups (Mumford, 2002; Hernandez and Cormican, 2016; Romani and Grapi, 201; Oldham and Cummings, 2003; Kuipers and Stoker, 2009). Through the case study, other key factors that influence social innovation may emerge, and the suitability of complex business environments for social innovation is considered.

2.1 Research question

The main objective of this research is finding the key factors that facilitate social innovation. It is evident that there is a link between creativity and motivation leading to innovative ideas (Oliveira, and Breda-Vazquez, 2011); however, not enough is known about the effects of the environmental complexity on the development of social innovation. This knowledge gap leads to the following research question. This case study researches the central question:

‘What factors influence how social innovation is expressed in teams operating in a complex financial

business environment?’

To explore this research question, the following propositions are drawn from the literature:

 The more creativity needed to effect the job, the more social innovation is expressed in a team;  The more autonomy experienced in the working environment, the more social innovation takes

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 Social behaviour driven by intrinsic motivation of employees drives them to participate in social innovation.

The data analysed in the study is extracted from ABN Amro Bank. The reason for choosing this company is because it meets the criteria for a complex environment: job environments that are

characterised by component complexity, coordinative complexity and dynamic complexity (Wood, 1986). In addition, the researcher is an employee of the organisation, which made it easier to collect the data. For this research there is chosen for qualitative research methods, because social innovation is a rather new topic in academic research. A case study will bring new insights about this phenomenon, with empirically gathered data which makes it suitable for qualitative research, which suits very well in cases where new research areas are being investigated and the theory developed from it has specific strengths as empirical validity, testability and novelty (Eisenhardt, 1989). By interviewing multiple team members of three different teams within the ABN Amro Bank, I have accumulated the experiences and examples to answer this question. Each team has similarities in education level and job complexity. The difference between the teams lies in the style of management. The three teams are divided in managers that execute direct supervision, indirect supervision or are self-directing. The role of the manager is in this research part of the complexity of the environment and influences the perceived environment. Therefore, the teams were selected based on different styles of management.

Building on current literature on the social innovation the interview questions that are used are semi-structured, to further explore this topic in a structured manner. Interviewees still have space to add new topics or give new insights that are not described in current literature. There are four topics in the

interview derived from the literature: 1) creativity; 2) autonomy; 3) intrinsic motivation. Further, questions mostly consider the influences of environment on social innovation. Because managers have direct

influence on the environment experienced by employees, their role in the factors that influence social innovation is discussed.

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The interviews are transcribed and coded using the qualitative analysing programme ATLAS TI. Codes are analysed and clustered to themes which give insight on the recurring subjects and there relations. Detailed analyzation and conclusions will be described in the results section of this thesis.

2.2 Thesis structure

The thesis study is structured as follows:

 Chapter 2 Literature review looks into existing literature on social innovation and describes the theory about the phenomenon and the research gap that is explored in the case study.  Secondly, chapter 3 describes the methods of data collection and analysis used.

 Chapter 4 provides an overview of the results of the data analyses.

 Chapter 5 discusses the results and describes the implications and limitations of the case study and gives suggestions for further research.

 Chapter 6 is the conclusion, and the supplements contain the appendices and transcribed interviews.

3. Literature Review

The following theoretical framework provides an overview of literature on social innovation. First, the definitions of social innovation is used in this research are explained. Then, there is a discussion of the current literature on the key factors that influencing social innovation— creativity, autonomy and

motivation—and the foremost propositions in the case study are explained. Final clarification for the

definition of a complex environment, as well as how the environment is linked to the research question, are discussed.

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3.1 Definition of social innovation

‘The concept of social innovation had become a commonly but not consistently used term in the literature’ (Moulaert et al, 2005).

This statement although made in 2005, is still accurate after 12 years. While over the intervening years more research has been conducted on social innovation, there is still not a definition that is consistently used. The social innovation field has become characterised by conceptual ambiguity; a diversity of definitions and research settings, leaving some critics questioning the validity of the social innovation phenomenon altogether(van der Have and Rubalcaba, 2015; Pol and Ville, 2009). Social innovation is discussed in different field’s literature, like Sociology; Management and Business studies, and Urban & Regional studies. These different fields focusses make that the viewpoints on social innovation in the literature differ. Each field defines its own definitions of what social innovation is, based on the different field perspectives and study topics of the researchers.

Pol, E. and Ville, S. (2009) clarify the important difference between business innovation and social innovation. As in business and management studies there has been a debate on if there is a difference between these types of innovation, because of overlapping in the meaning. Social innovation differs from business innovation in the way that business innovation is profit seeking innovation, consisting of

technological and organisational innovation. Social innovation is not necessarily driven by the profit motive. The definition given to social innovation by Pol, E and Vile, S (2009) is as follows: ‘The creations of new ideas displaying a positive impact on the quality and or quantity of live.’ From this definition, the creation of new ideas that have a positive impact, describes the process and the outcome of social

innovation. For social innovation, the outcome does not even toned to be materialistic, but could also be a change of attitude, behaviour or new social practice (Hernandez, Cormica, 2016).

Van der Have and Rubalcada (2015) analyse the social innovation field by collecting all literature written between 1986-2013 to map the field as a whole. Their analysis suggests that the social innovation

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field is grounded in four distinct intellectual clusters: 1) Community Psychology; 2) Creativity research; 3) Social and societal challenges and 4) Local development. (See table 1).

Ad1) The viewpoint of the community psychology research field on social innovation is from a social problem focus. Social innovation is a way to design and evaluate an innovative solution for a social problem (Hazel and Onaga, 2003).

Ad2) The Creativity research field views social innovation from the perspective of implementing new ideas that meet a common or social goal. Mumford (2002) defines social innovation from the creative viewpoint as: ‘The generation and implementation of new ideas about how people should organise interpersonal activities or social interactions to meet one or more common goals. While Oliveira et al., (2012) directly couple creativity to be the social innovation to an outcome, by defining it as ‘Social innovation is the application of creativity to social purposes.’

Ad3) The field of Social and societal challenges as: ‘Innovative solutions to social technical challenges combined with the concepts of Transition Management and Strategic Niche Management. Social innovation is the generation and implementation of new social service ideas for solving social problems manifested at either the product or process level of the social system level.’ (Weerawardena and Mort, 2012).

Ad4) The Local development field describes social innovation as satisfying human needs through an empowering change in the relationship between local civil communities and their governing bodies. ‘Social innovation covers actions that introduce changes in a social landscape characterised by injustice, or if they contribute to the empowerment of local actors, particularly the underprivileged in public decisions (Moulaert et al., 2005).

The fields describe innovation differently, viewing the phenomenon from the process side considering what leads to social innovation, or from the outcome side considering what social innovation effectuates. However there is shared aim on the view of social innovation. All fields see social innovation as a change in social relationships, -systems or structure that serves to find a solution to a shared problem, a common goal or challenges. In the case study, the main focus is on the process of social innovation, and the factors

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that influence social innovation within a financial business environment.

Having a clearer view on the definitions used for social innovation and their commonality is key. The definition that is used for this research on social innovation is built on the definition of Mumford M. (2002), combined with Pol and Ville (2009) as follows:

‘Social innovation is interaction that leads to the generation and implementation of new ideas, created from ideas in an organisation, to meet common goals and needs, or redefine the way of working to improve

environmental and social needs, with a positive impact.’

This definition focusses on social innovation within an organisation, which fits the main focus of this case study.

3.2 Creativity

Research by Oliveira and Breda-Vazques (2011) demonstrates that there is a link between the creativity of employees, and social innovation. Creativity in the business environment refers to the extent to which employees develop ideas, methods, or products that are both original and useful to the organisation (Oliveira and Breda-Vazquez, 2011). According to Oliveira and Breda-Vazques, highly motivated employees are most likely to exhibit high levels of creativity. These intrinsically motivated employees are more likely to utilise such creativity when involved in complex jobs—jobs that are characterised by high levels of autonomy, skill, variety, identity, significance and feedback (Baer et al., 2003). When employees

experience high levels of motivation and search for creative solutions to solve the problems they are faced with, this can be an opening for social innovation. When creative problem solving is used for constructing new ideas that can create a social benefit, this is seen as a social innovation (Oliveira and Breda-Vazquez, 2011). Mumford (2002) add that with regard to idea generation, it appears that a climate allowing autonomy and providing a mix of intrinsic and extrinsic rewards while encouraging and intimate

involvement with the work itself contributes to innovation. The context should support the possibility of gaining relevant information and dynamic exchange with diverse colleagues who share similar goals and interests, but also the acceptance of new ideas.

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Creativity can be stimulated by other people’s ideas, which are increasingly being collected and saved. All groups of people arrive at many possible social innovations, but most ideas never reach practice because an idea that is only spoken of but is never brought to realisation or when it takes organisational form, fades due to waning enthusiasm (Mulgan, 2006).

Creativity is an idea generator and ideas are the basis for social innovation. This hypothesis is tested in our case study, where there is high job complexity which accompanies high levels of creativity of the

employees with intrinsic motivation. The following proposition is formulated to put this to the test.

 The more creativity is needed to perform the job, the more social innovation is expressed in a team.

3.3 Motivation

Social innovation arises when new ideas that meet common goals and needs occur, or when work is redefined to improve environmental and social needs. Creativity makes that these innovative ideas are generated. From the research of Baer et al. (2003) the conclusion is drawn that high intrinsic motivated individuals exhibit high creativity. So there is a direct link between motivation and creativity. Is there also a link between motivation and social innovation? Motivation to achieve personal goals is different than that needed to achieve a common goal or even a goal where an individual does not directly benefit. This is where another type of motivation is needed: pro-social behaviour. Social innovation and pro-social behaviour are very similar. Pro-social behaviour covers the broad range of actions intended to benefit one or more people other than oneself, such as helping, comforting, sharing and cooperation (Baston and Powell, 2003). Romani and Grapi (2014) study the role corporate social responsibility has in pro-social behaviour of customers. Corporate social responsibility is explained as ‘a commitment to improve

community well-being through discretionary business practices and contributions of corporate resources’. Their research shows that when companies engage in social activities that reach beyond their primary business, the consumers of the company are stimulated to act with pro-social behaviour through moral elevation and self-reported altruistic behaviour. Consumers feel the need to donate time and money and

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volunteer for social activities, or change their behaviour regarding a certain social topic. An example of companies performing pro-social behaviour is the care product producer, Dove. This company has a social mission in trying to change people’s stereotypical views of female beauty through their advertisement campaigns and initiatives in female social events. The effect of corporate social responsibility was not only the pro-social behaviour of the consumers towards the social initiatives, but also the important effect on the relationship between a company and its customers. Respondents of the research described their growing loyalty to the company. When customers of companies engaging in social activities are motivated to engage in pro-social behaviour, it is interesting to examine what the effect is on employees of the company that engages in pro-social behaviour and what their role is in the formation of this corporate social activity. Witnessing good moral actions by companies can trigger strong positive emotions of moral admiration, which change people’s thought-action repertoire and increase the likelihood that they not only show affiliative behaviour towards the company, but also that they engage in social causes in the same sphere as the company’s CSR initiatives (Romani and Grapi, 2014).

The literature on pro-social behaviour also examines under what circumstances representatives negotiate pro-social self-sacrifice behaviour. Aaldering, et al. (2013) experiment shows that pro-socials make large concessions and are relatively cooperative towards their adversary across different settings. They are willing to sacrifice to accommodate the interest of the group at cost to themselves. The experiments conducted showed that pro-social representatives are not cooperative to their opponent if this is not beneficial for their community. The research did not depict the driving force behind the altruism. The findings of the experiments suggest that pro-socials are not willing to give up their constituency to hurt their opponent. If the opponent benefits from the same outcomes as their constituency, pro-socials seem to accept this as collateral damage. It thus seems more likely that their behaviour is driven by a tendency to defend their in-group. In addition to engaging in social innovation, pro-social behaviour expressed by employees with high levels of intrinsic motivation that goes further than one’s own interest but benefits the group, can be a factor that encourages individuals to participate in social innovation. Engaging in social innovation projects requires motivation, which can be extrinsic and materialistic— profit or incentives—or intrinsic—inner moral passion/need, recognition, compassion, identity, autonomy or care (Hernandez and

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Cormican, 2016).

Motivation can also arise from inspiration that combines a problem with a solution, or combines two existing things into something new. ‘Innovators are often good at talking and listening, digging below the surface to understand people’s needs and dislocations, dissatisfactions and blockages. Empathy is the starting point and ethnography is usually a more relevant formal tool than statistical analysis. Personal motivations also play a role: people may want to solve their own problems and they may be motivated by the suffering of friends and family.’ Mulgan, (2007) describes how characteristics of a person combined with personal motivation can be converted in social innovation. When the motivation comes from the ‘suffering’ of others, pro-social behaviour will be the reason to express social innovation.

 Social behaviour driven by altruistic intrinsic motivation of employees makes them participate in social innovation.

3.4 Autonomy

Engagement, tells how committed an employee is to its work and the company goals. Engaged employees often experience positive emotions, this makes them more sensitive to opportunities at work, more outgoing and helpful to others and more confident and optimistic (Baker et al., 2012).

Mumford, (2002) explained that a climate allowing autonomy is a contextual factor for innovation, when there is relevant information available and exchange with diverse colleagues who share similar goals and interests. Breevaart and Bakker, (2013) explain that when employees use more self-management they report higher resources at work and in turn are more vigorous, dedicated and engaged.

A high form of autonomy in teams is self-directing teams, who operate under self-management. Self-management means that employees manage and monitor their own behaviour and are responsible for the decisions they make, while there is no direct control. By letting a team self-direct this expresses trust in the capabilities of the individuals. Trust is commonly accepted as having a variety of positive effects like

improving communication, more organisational citizenship behaviours, less competitive behaviour in negotiations, higher group performance and greater job satisfaction (Langfred, 2004). Kuipers and Stoker

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(2009) research a total self-directing team in their model named a ‘Phase 4 open team’. When the team is mature enough to self-direct their performance, focus evolves through double loop learning and the team develops the capacity to solve most non-routine problems. These self-directing teams build relationships with other teams, customers and suppliers on their own, without a hierarchical leader. This autonomy, when used, creates innovative solutions for problems and creates an environment for creativity. Langfred (2004), however, notes that there are negative effects precipitated by allowing individual autonomy in self-managing teams. When given too much trust in self-self-managing teams, characterised by a high level of individual autonomy, too much trust can be harmful, leading to process loss and coordination errors. It is likely that there are other conditions under which trust may be harmful, or at least may have not have the positive effects normally associated with it, but there is need for further research to explore these factors.

This case study is interested in the relationships of autonomy in an organisation, and how autonomy is connected to social innovation. The research demonstrates that autonomy can positively affect creativity and innovation. There needs to be further research regarding whether there is more social innovation when there is more autonomy in a team.

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Teams that are given more autonomy experience more freedom and will generate more social innovation.

3.5 Environment

‘Like any kind of innovation, social innovations are simultaneously path-dependent and

context-dependent. This means that places and spaces are hugely relevant for the emergence and thriving of social innovations’ (Oliveira and Breda-Vazques, 2011). The environment is subject to a wide range of tensions due to power struggles, new interests or forms of authority, which can all be opportunities for social innovation. The environment of a team is affected by the sector of work, the amount of autonomy of restrictions and the managerial practices. It is interesting to know if there is an effect is of managerial practices on social innovation. Research indicates that no direct management has influence on creativity

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and innovation of a team (Oldham and. Cummings, 2003: Langfred (2004)). Therefore it may be that direct management influences creativity and innovation. The main goal of management is to direct employees to meet specific goals and to bring economic value to the company. For social innovation, the main goal is social change and the establishment of new social practices. The outcomes are not always materialistic in value, but could be more qualitative than quantitative outcomes and therefore more difficult to measure through the classical management tools and templates that are customary to measure materialistic output (Hernandez and Cormica, 2016). With social innovation, the management of knowledge exchange and creation of the conditions for social innovation to flourish is more presumable. Not only formal leaders, but also individuals not in managerial positions, can influence social innovation Mulgan (2006) explains that heroic, energetic and impatient individuals throughout history took responsibility to change and

sometimes remake the world by persuading and cajoling a timid majority into change. They carry ideas of a need that is not being met, combined with an idea of how it could be met. When acceptance is find in a willing environment these ideas can grow out into social innovations Mulgan, (2006). Key to the

fruitfulness of social innovative ideas is a willing environment that accepts new ideas. The role of leadership in social innovation has to be further examined.

What influence does leadership have? Is it better to have self-directing teams or leaders that encourage team members to invest in social and environmental improvement? How do individuals that do not have formal leadership, but take the lead in social innovation influence the activities of others? This case study collects answers to these gaps in the present research.

Yet, what is it that makes an environment complex? Dyer and Ross, (2008) describe environmental

complexity as a dynamic environment with the occurrence of rapid, frequent and complex changes. Wood (1986) ascribes complexity to the tasks employees need to perform. The complexity lies in three factors. Firstly, component complexity is the direct function of the number of distinct acts that need to be executed in the performance of the task and the number of distinct information cues that must be processed in the performance of those acts. Secondly, coordinative complexity concerns the nature of relationships between task input and task products and the form and strength of the relationships among

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information cues, acts and products. Finally, dynamic complexity concerns frequently adapting to change in the cause effect chain or means-ends hierarchy (Wood, 1986).

4. Methodology

In this chapter, the method used for this research is discussed. The choice of research method is explained in addition to how the data is collected, and how it is processed and analysed to answer the research question: ‘What factors influence how social innovation is expressed in teams operating in a complex

financial business environment?’

4.1 Research design

To answer the research question regarding what factors influence social innovation in a complex business environment, qualitative research in the form of a case study is used. Qualitative research is research that involves analysing and interpreting texts and interviews in order to discover meaningful patterns

descriptive of a particular phenomenon (Auerbach and Silverstein, 2003). The preference for qualitative research above a quantitative research method in this study is because qualitative research is focused on the determination of the motives, believes and perceptions of a phenomenon. This makes qualitative research suitable for research topics that are afforded new and/or limited discussion in the literature. Qualitative research exposes how people think about, react to and cope with the real-world setting. This brings contextual richness to the research and shows how people perform under different circumstances (Yin, 2015). This contextual richness is an important part of answering the research question, of which an important part is the research of a phenomenon in a complex financial business environment. This environment is experienced in a different way by all employees, the richness of this case study is found in what this experience of the environment is and how it is formed. With qualitative research, this depth in

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environmental or real world setting can be brought up and the environmental settings can be connected to the relationship with a broader array of topics. For this research, the behaviour of employees in everyday professional setting is being researched, but qualitative research gives the opportunity to involve other settings to bring richness and new connections in the data that can lead to new in-depth studies and new topics to be found. On the other hand quantitative research is generally applied to find causal relationships between variables, making it more framed research that limits the variety in contextual settings as a part of the research (Eisenhardt, 1989). The phenomenon social innovation is not fully explored and seen as a new subject in research literature. To explore new key factors that influence social innovation and how this occurs in complex environments, a case study of interviews provides new insights. The research on this subject is conducted as an inductive and exploratory study. Through the study of the phenomenon, patterns and new insights that build on new hypotheses of social innovation are discovered. This aims to provide insight into outcomes that have not been registered in previous literature. Furthermore, the managerial implications show that the role of management influences the behaviour of employees. This effects social innovation within a team, and managers should be aware of the context they provide for social innovation to be expressed. Through interviews, question data is collected regarding the factors that drive social innovation. This data contains subjective judgements of the participants on the research topic, supported by examples they provide. Identifying these factors through interviews helps form a qualitative model that can ideally be further developed to examine the phenomenon of social innovation further.

Case studies fit in the research characteristics of qualitative research in cases where new research areas are being investigated and the theory developed therefrom has specific strengths and empirical validity, testability and novelty (Eisenhardt, 1989). The single case study applies in this research. As Yin (2009) explains, the context together with the number of cases are normative to decide if there is a single or multiple case study. For this research, the context is the complex business environment, or the ABN Amro Bank where the employees that underwent the interviews work, and where the researcher works. The case that is examined is social innovation, and the unit of analysis is the team that the employees work in. The research is therefore a single case study with the teams representing embedded units of analysis

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team 4 or 5 persons are interviewed about their view on social innovation within the bank. Each team has the same general mandate as in the teams all contain circa thirteen persons; employees have the same level of education, min HBO+, which meets the characteristic of Baer et al., (2003) that links the complexity to education level. This makes the experience environment uniform in complexity for all participants. The teams all work in the mortgages division of the bank, albeit on different aspects of this division.

Participants are randomly selected on their availability to do the interview during time period of two weeks that was selected by the reviewer. All teams have their own team manager or direct supervision. Team managers differ in style of management. One team has direct management, one team is self-directing and must answer to the backlog of a product owner, and one team is indirectly managed due to physical distance between the manager and the team members. This lends an extra dimension to job complexity, because managers can directly influence the circumstances of the work environment and work pressure.

4.2 Data collection

The data used for this research is collected through semi-structured interviews. An example of the

interview questions is added in Appendix 1. Semi-structured interviewing was chosen because when using the semi-structured interview method, the person being interviewed has a fair amount of freedom in what to talk about, how much to say and how to express it. This makes semi-structured interviewing a flexible technique for a small-scale case study. Semi-structured interviews allows the interviewer to lightly steer the interview, which gives the interviewer space to keep the interviewee on topic, but also leaves room for new insights. The interviews are structured using the literature regarding factors that lead to social

innovation. Building on this knowledge, questions are formulated to see if the factors mentioned by the interviewees are similar to the literature. By leaving space for in-depth questions and examples, more factors were given by the participants than might otherwise have been solicited with a structured interview. All interviews were conducted in Dutch, because the interviewees and the researcher are all native Dutch speakers. The interviews were held at the workplaces of the interviewees, in conference

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rooms. Before the questions where used in the interviews, they were presented to and criticised by a thesis supervisor and the qualitative research course teacher. This presentation led to small changes to improve the clarity of the questions; one question that contained two subjects was separated into two questions before being approved.

The chosen topics for the interview questions are drawn from the current literature: Participation in social innovation; Creativity (Mumford, 2002); Motivation and practice (Hernandez and Cormican, 2016; (Romani and Grapi, 2014); Environment and setting (Oldham and Cummings, 2003; Kuipers and Stoker, 2009); and Management practices. For each topic, there are dimensions that support the subject. These sub-dimensions are extracted from the propositions of factors that influence social innovation.

Creativity → automation / profession type / privet versus work Motivation/practices → reward / stimulation / behaviour / activities Environment/Setting → culture / location / feedback and support Management → targets / reward / informal leadership

The sub-dimensions are used as subjects to prompt discussion when the interviewee had difficulty answering the question, or where further explanation or more thorough answers were needed. The discussed topics were similar during the various interviews, although questions could differ depending on the storytelling during the interviews. For example, feedback and reward would be discussed within the motivation, as well as management and creativity dimensions. This could lead to a change in order of the interview questions or added probing questions that were spontaneously brought up by the researcher. The interview questions are as following:

1) When looking at the past year, did you participate in social innovation, or have you seen it in your work environment?

2) Do you experience freedom to express creativity in your work?

3) To what extent do you feel free to participate in social projects and solving team problems? 4) Is the team you are working in creative / innovative / social?

5) Do you experience stimulation, demotivation or no part of your direct manager to participate in creativity and social projects?

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6) Is the bank socially concerned? How does this manifest and what impact has it had on you as an employee?

7) Have you participated in social innovation or seen it in your environment?

The group of interviewees contained employees who are the researcher’s direct reports, and employees that have no connection to the researcher. The management role the researcher has within the bank might influence the answers of the participants compared to what they would have been if there was no hierarchy difference. To make the interviewees feel safe and comfortable I explained the reasoning for the interview being only used for writing a master thesis, and only conducting the interviews while dressed casually, to give the impression of being off duty. Interviews were 45 to 60 minutes long; this is the conventional time period that employees can spend on bilateral conversations for ABN AMRO.

4.3 Analysis

For the research, fourteen interviews were conducted. From the total of three teams, five individuals were interviewed from each of the first two teams , and four people were interviewed from the last team. All interviews were recorded and transcribed in Dutch. The transcriptions contain the written answers, the questions asked in the interviews and information about the setting and the ethos of the interview. The transcriptions were uploaded into ‘ATLAS ti.’, a qualitative research analysis programme, which supports coding of the documents. Documents were coded one by one in an open coding method.

A code is most often a word or a short phrase that symbolically assigns a summative, salient, essence-capturing and or evocative attribute for a portion of language-based or visual data (Saldana, 2003). Using the open coding method, all documents are read and key phrases of the interview are being marked to identify useful concepts. These marked lines of text are named. The codes provided do not necessarily have equal weight; the weight of the codes lies more in the influence these aspects have on the behaviour of the team members and the amount of structural recurring of a code or similar code.

After all documents are coded, the codes that relate to the subject are manually selected and clustered into categories. Categories contain the essential thoughts and experiences of the participants on a certain

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subject, combined to form a theme. Themes are the basis for the development of new insights on social innovation.

A theme captures some level of patterned response or meaning within the data set that brings something important about the data in relation to the research question. There are ten categories that resulted from the interviews, of which two categories relate strongly to other categories, but contain combinations of aspects that cannot all can be in one category (Figure 3). The categories found are matched with the literature that has been reviewed if there is causality with the literature, and if not, the differences in causality are considered and new topics are found. Varying topics and connections arose during the coding process, most of which are added to a cluster with a connecting theme. Some codes were neglected because they were outside of the research scope or did not add to the research question.

5. Results

In the following chapter, the results of the case study analysis of the data are described. The research question and propositions that are explored through the interviews, are answered and reported. The aim of this research is to further clarify the details of the variables known to influence social innovation in current literature, and add new variables to this.

All interviewees were asked if they had participated in social innovative project or seen a social innovative project in their proximity over the past year. The time period of a year was chosen because it is the upper bound of what an average individual may remember and still know details about. Asking about their involvement in social innovation was the opening and closing question for the interview. Because social innovation is a rather unfamiliar concept for the interviewees, this order gave the participants the ability to think of social innovative activities they have seen or participated in while talking about the subject. Social innovation is explained as interaction that leads to the generation and implementation of new ideas, created from ideas in an organisation, to meet common goals and needs, or redefine the way of working to improve social needs.

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Out of the 14 participants, one had engaged in a social innovative project that was originated an idea that came from the work floor. The rest did not participate in such a project and did not have a perspective on how social innovation was present within the bank. The projects most of the employees were involved in were set up top-down. This showed that the amount of social innovation expressed by the interviewee’s or known to be expressed in the team of the interviewee’s, is low, but that it is present in the environment. Because all participants believed social innovation was present within the bank

deepening questions were asked on what made it they did not participate in social innovation themselves. Basis for the exploration are the propositions that are formed to test if the factors know to influence social innovation were met in their environment, and further clarify the details on these factors. The factors discussed are: creativity, autonomy, motivation, and social behaviour. The interviews also researched other factors that are not yet known. These factors from the literature that are still abstract are further clarified and discussed, then the new factors that are found based on the interviews are discussed. These are the following factors: target culture and age. The names of the interviewees are anonymised for privacy reasons, and interviewees are instead referred to by numbers.

5.1 Creativity

The proposition underlining the research on creativity was: the more creativity needed to perform the job,

the more social innovation is expressed in a team. Participants were asked if they experienced freedom to

express creativity in their job. Out of the 14 participants, seven positively confirmed that they experienced the freedom to be creative. Four participants claimed they could be creative, but with limitations, and three did not feel they had the freedom to be creative in their work. (Figure 1)

Figure 1

Creativity Yes No Limited

Team 1 – No direct

supervision 2 2 1

Team 2 – Direct Supervision 4 0 1

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The participants that felt the freedom to express creativity were mainly from the direct supervision team. The direct supervision played part in the experience of freedom to be creative, the interviewees working in the direct supervision team named this explicitly as a reason for feeling the freedom. Two statements made by participants explain why this is the case:

[Interviewee 1] ‘We are very much led to it. The management team has left us the freedom. Sometimes the manager will say: ‘Go do something with this’, but space is left to search for creativity. They try to let it out of their hands and only say ‘this is it, make something nice out of it’. So yes, the space is given, but you’ll must make something out of it yourself.’

[Interviewee 4] ‘Yes, at our unit we are given lots of freedom for it. When you have certain ideas, you can—per the new way of working called agile working— set up a workgroup and work on it. It is explicitly communicated (by the manager) that there is no ‘wrong’ idea. When something is raised and it does not work... well okay, then it does not work (...) there is no pressure from the management that is has to succeed.’

Freedom to express creativity is experienced because the managers tell the team members that they are given the freedom, and they then remove insecurities caused by fear of failure, making them feel safe to execute creative ideas in projects. Employees feel secure and supported by their manager.

Opportunities must still be handed to the employees. There is very limited independent action to bring creativity to a level of innovation. When interviewees are asked if they feel free to work on social projects or problems all agree, most responded that they have taken part in a project to solve a problem.

Nevertheless, most have not taken pro-active approaches to start or be part of a solution for a collective problem. Limited time and strong focus on your own work are the main reasons not to pro-actively start a project.

[Interviewee 8] ‘Yes I feel free to participate, but it often does not happen. Sometimes I think shall I get on board or not. Last week, my manager sent something and asked who wanted to participate. And I

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thought to myself, what is this about? Do I have time to delve into something?’ later she adds: ‘It is often extra. Extra time and extra of what you must deliver; then I need to find it fun to do.‘

Social projects are seen as an extra task on top of the daily work load. Employees are selective in

participating because they feel it is burdensome. They consider whether they want to spend time on the extra project, and part of the decision is if the subject seems fun.

Employees do not take initiative to participate in social projects. How employees do get involved in social projects is explained by interviewee 2:

[Interviewee 2] ‘The practice points out that the initiative comes from the management or other departments within the ABN. Last year I attended the project quotation in one day, but that did not origin from here. At a certain point we participated in it, but it came from somewhere else. So, you have the feeling that you contribute to it, and that you participate in something new, but it is truly more attributive.’

Most problem solving happens in projects that are formed by the management. Employees are asked based on their experience or creativity to participate in a project, which makes the decision for what is being implemented top-down, although the solutions are created bottom-up.

While the employees with limited or no direct management felt less space to be creative, their few points on creative expression were broader than that that of the team with direct supervision; they looked not only for creativity expressed in their own unit, but within the bank. Interviewee 14 notes his

experience of trying to implement a new product in the mortgages department, and the limits that his creativity encountered.

[Interviewee 14] ‘I think that this is because there are too many rules. There is a lot of legislation that tells you what path to follow. On this path, you can walk a little back and forth, but the path is not wider than the path is. The legislations and what we can and cannot do, there is the supervision of the quality desk and there are the limitations of the systems. All this together means that you have a limited playing field. For example, I attended a meeting once on the Gustav (headquarters) about a start-up project, that could show you out of twenty thousand sources, Google Maps pictures, all of those things,

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what was needed to improve your residence to make it more sustainable. That is what you could use at a contract signing appointment, you can say “nice house, would you like to do something about its

sustainability?” Then you jointly look at this tool, which shows that you must invest approximately 20k on renovations, this will raise your energy level this much and save you this much, which means you can finance this. (..) But how are you going to implement it in a big company as ABN AMRO? I must ask permission to so many different departments, this made the process so complicated that we let it be.’

When employees experience that their initiatives are blocked or not heard in the organisation, they may feel there is no space for creativity, and may stop trying. One participant that is part of a self-directing team experienced the same limitations. He stated that he is not the creative type, but is the type who knows how to turn a creative idea into an executable product. However, he feels that the environment does not support reduction to practice of these creative ideas.

[Interviewee 13] ‘There is an iron roadmap (...) in the end priorities are decided in the top. There is a limit.’

Limitations by the managers, or an iron roadmap, cause creative innovative solutions that rise from the bottom to be very limited. Most are mired at a certain level in the bureaucracy of the organisation. This is consistent with Mumford, (2002) who explains that a climate allowing acceptance of new ideas is needed for innovation to flourish.

Thus, when creativity is performed in the complex work environment, this does not lead to social innovation. Two important factors are necessary: (1) Embedded time, and (2) Mandate for execution. Complex environments are dynamically complex and coordinatively complex (Wood, 1986).

1. Dynamic complexity can institute time pressure to execute the work that has to be done in a certain time period. For social innovation to grow there is embedded time needed to put creativity in innovative projects, or the employee needs to feel that the extra time spent is for something they see as ‘fun’. When this is not the case there will be limited bottom-up initiatives.

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2. The second factor that is needed to turn creativity into social innovation is collaboration with other departments that are critical to the implementation of innovative ideas. Alternatively, there should be a mandate given to the individual or group that originated a creative idea to execute the idea. Trust is needed such that failure is acceptable. These requirements are difficult to meet for a complex environment with significant bureaucratic limitations, and therefore it is harder for individuals in such an environment to deliver social innovative projects.

5.2 Autonomy

One proposition is that teams that are given more autonomy experience more freedom and will ultimately offer more social innovation. Within the case study, three teams where the amount of autonomy differed were interviewed. The team that has the most freedom is the self-directing team. In this proposition, this should be the team that experiences the most amount of freedom and therefore should participate more in social innovation. As concluded, out of all participants, one engaged in a social innovative project that began from a bottom-up idea.

The self-directing team handles part of ‘agile projects’, which are projects to create new products or processes in a short amount of time. Products are asked for by the business, and team members of these agile teams are expected to decide together how and when they will develop a part of the new product, giving them freedom to fill in their own work agenda and place creativity in how to design a product. Still, creativity outside the development of products asked for by the business is low. One reason for this lack of social innovative initiatives is the sector the interviewees work in.

[Interviewee 3] ‘I think it has to do with the field we are working in. You don’t need to develop lots of creativity as I see it. (…) We need to be honest; people choose a job at a bank because they attach much worth to freedom, structure and steadiness. We all scream that we want as much possible for our clients, that we are flexible and always say yes, because no is not an option and we want to hear the yes. But in reality, you notice that when you want to organise something off the beaten track or want to organise or

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establish something there is lots of resistance. And maybe this is part of the profession or the company we chose to work for; otherwise we would have been entrepreneurs.’

The participants do have more freedom, but do not feel the need to use it or they feel that this it is not aligned with the culture of the sector they are working in to establish something new and innovative outside the set boundaries. This implies that autonomy and culture or expectations of work behaviour that are common in the environment are interdependent when it comes to innovation.

Interviewee 9 confirms this by answering the question, ‘is there action when someone comes up with an idea?’

[Interviewee 9] ‘You must be realistic of course, you can preach something really beautiful, but it will never make the cut. You must be realistic in this. There are many processes being digitalised, so most of the time there is something already, which brings certain rules you must live by, and certain stakeholders that will review. But within these boundaries you can make things as beautiful as you like. But we are still a bank. So, the main thing is that it has to work correctly.’

Employees experience rules and dependency on stakeholders for implementing ideas, but live by the idea that the banking environment requires overall products that work – not experiments.

Autonomy is limited. There is freedom to complete the tasks that are assigned, and even bring some creative ideas to the table, but there is a certain culture in the banking environment which means abiding by rules regarding what you can and cannot do.

In the team that experiences direct supervision, the influence of the manager is much more leading in what social innovative projects are done by the employees, as is seen in the creativity analysis. The team that has no direct supervision, but is not self-directing, experienced autonomy as obstructive to the social innovative process when this means that there is less direct contact. Two statements made from this team about the level of autonomy helping them be more creative are:

[Interviewee 5] ‘Because we work more from home we are more islands and therefore can do less for one another’

[Interviewee 8] ‘We are all individualists, a sort of miniature islands. This is because of the job we have. Everyone needs to deliver mortgages and is saving their own skin, this is part of the culture.’

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[Interviewee 14] ‘I think it affects you that you become less creative and that you do less together. It is often the case when you work together that it will bring different perspectives; you complement each other, which is not the case now. We are getting more individualistic,’

All of the use the statement that they work as islands, or individuals meaning that the interaction between the team members is low because the physical location they work from is from their homes or they are in a bank branch where they have with limited contact with their team members.

Thus, three things strongly influence whether a team or an individual expresses social innovative behaviour, despite the level of autonomy enjoyed: (1) the business sector, (2) stakeholder dependency and (3) physical contact.

1. The banking sector is known as a strict and bound to regulations. This attracts a certain type of employee; one who feels comfortable not engaging in entrepreneurial activities, but can act the way they want within very clear outlines.

2. Even though autonomy is given to execute a job, bringing something new and innovative to the table relies on the interdependency among other departments and individuals. The bank is seen as a large bureaucratic environment that does not encourage socially innovative ideas. When

employees experience the bureaucracy, they give up on their ideas and keep to what is expected of them.

3. Autonomy for some teams brings the freedom to work from wherever the employee chooses. Many employees choose to work from their homes instead of a bank branch or office. This affords them the opportunity to fill in their work – life balance themselves, but also presents the

disadvantage that colleagues do not see each other. The physical contact that causes co-worker familiarity and facilitates discussion about an innovative or creative idea is absent. When ideas are pitched and discussed, employees might otherwise be more motivated to work on them and test whether they can be implemented. The lack of physical contact team members have limits their creativity and innovation.

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5.3 Motivation and social behaviour

The proposition that leads to this subject is that social behaviour driven by employees’ altruistic intrinsic motivation drives participation in social innovation.

When asked why some people are more actively innovative, two recurring themes arose: 1. Profiling behaviour and,

2. Intrinsic motivation

To develop the question, informal leadership behaviour was also discussed. Employees viewed as informal leaders are the ones who take responsibility for the team, function as group speakers and stand out in terms of their performance. The questions explored include inquiry into what motivates these employees to behave innovatively, and to what extent this motivation influences the innovative behaviour of

themselves and others.

Ad 1. Profiling behaviour. Standing out and completing projects aside from one’s core job is understood by many interviewees as ‘profiling behaviour’. This behaviour is associated with letting the manager and other team members know that one is better than the rest of the group, and therefore able to forge career advantages. Employees motivated by profiling behaviour view this behaviour as positive self-expression and also understand the advantages it can create.

[Interviewee 7] ‘I don’t think it brings you a certain status. But I do think it influences you and your career when you offer yourself continuously to participate in these things. I think it will bring you in a good perspective of your manager, you’ll show that you are flexible and willing to do other things besides your normal work.’

Manager perspectives on what is positive behaviour, like flexibility and participation in projects, is steering in the way employees behave.

Direct colleagues do not all see this as positive behaviour. When asked if the people that take the lead in teams and act like informal leaders are also the ones participating in social innovation, the interviewees answered with the following:

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[Interviewee 2] ‘Let me see, for the team – yes eventually it is. These types of employee give the impression that they do it to profile themselves instead of the team. But in the end, they also do it for the team to make things easier for everyone.’

[Interviewee 10] ‘The leadership role is now more the feeling that someone wants to manifest themselves, that person does more. But it can be seen as negative, out of self-defence. That is quite normal, it can happen when people want to profile themselves.’

[Interviewee 8] ‘Yes, what I see now is that people are changing their behaviour in a certain way that is embarrassing. This makes me think to myself: you are past yourself, this is not sincere anymore.’

Employees that stand out in performance and take the leading role in a team are not always seen as sincere – instead, they appear to act out of self-interest as a career move. This implies that the motives of the informal leaders are formed by their ambition to advance their career. Nevertheless, their behaviour benefits the team and sometimes helps improve the work activities and this is also seen and sometimes appreciated.

Ad 2. Intrinsic motivation. The informal leaders provided insight into what drives them to participate in extra activities. One employee who is seen as one of the team’s leaders considered his motivation to take on supplementary roles:

[Interviewee 4] ‘Let me think (laughs) no I think that it is more work related. At work, I like to be active in different things, be part of the thinking process on how things can be improved. I think they always see that I’m enthusiastic about it you’ll notice that you are commonly asked to participate in things. That is of course really nice. But sometimes I think it should be more spread among the people. Not only because it can be overwhelming, or you are participating in too many different things, but also to keep people

involved.’

Motivation is intrinsic, such as enjoying being part of many different things and being involved in the process of improving. When an employee demonstrates that enjoyment and also delivers on the additional responsibility, managers may ask these same individual to participate in (innovative) projects in future, thus rewarding them for their behaviour.

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There are co-workers that see the behaviour of these outperformers as positive and inspirational to others.

[Interviewee 14] ‘Yes I do think they have a role model function. They go a bit further and do more in terms of social activities and innovation. They try to transfer their knowledge. I think this is stimulating, because when you do not have a role model, you will not change. When you have more of these types, than you will think my team is actually really doing well and then you want to make changes yourself.’

This positive effect is seen on employees that have intrinsic motivation to improve themselves in their work. However, one must consider whether this intrinsic motivation leads to altruistic, or pro-social, behaviour.

Most interviewees indicate that that is not the case, and that there is limited to no altruism. Rather, social projects are carried out because people enjoy involvement and putting their cognitive abilities to the test.

[Interviewee 10] ‘Yes, I think it’s a matter of character. Some think “I just want to do my job and that is all, my job is already busy enough”. Others find it nice to deliver input, improve and go at things, utilise your qualities a bit more and do something other than your job.’

There is intrinsic motivation, but this is not altruistic behaviour, but rather the employee’s willingness to join projects and make their job more varied. Intrinsic motivation means that employees are willing to participate in projects or do extra work. Employees are well aware that this behaviour can have a positive influence on their career when it is observed by their manager. This intrinsic motivation does not directly influence the amount of social behaviour or social innovation. As Aaldering et al., (2013) explained, employees expressing pro-social behaviour make large concessions and are relatively cooperative towards their adversaries across different settings. They are willing to make large sacrifices to accommodate the interest of the group at cost to themselves. This pro-social behaviour is not apparent within the teams that were interviewed because sacrifices were made for their own benefit. What this demonstrates is intrinsic motivation; employees are willing to do extra both for fun and in order to be viewed favourably by their manager and co-workers.