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
Our own data indicates that engagement is highly correlated with innovation behaviors of all types of organizations. This encompasses having a culture that encourages its employees to innovate, even though success is not guaranteed. Engagement has an even stronger impact on organizations taking action on innovative ideas.
Looking into what aspect of engagement is most connected to innovation, we find that it's motivation. We see that employees' willingness to do more, i.e., performing beyond role expectations, is very strongly related to innovation.
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Nearly 8 out of 10 of highly engaged employees regard their companies as having a culture that nurtures innovation, whereas only half of the least engaged employees feel that.
What drives an innovative culture? Our data shows that the areas that most greatly impact innovation are effectively directing resources to company goals, developing your employees, and prioritizing quality and improvement in your day to day work.
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.