Formalising Social Workplace Innovation: The Role of Formal Organizations in Navigating Polycrises

The European Union (EU) has faced significant challenges during the 2008/2009 global economic crisis and the recent Covid-19 pandemic. In response, the EU has emphasized the importance of innovation-led recovery as a key strategy. Despite numerous initiatives across Europe labelled as "social innovation" or "workplace innovation," there is a notable gap in understanding how these efforts are systematically integrated into formal organizations to produce tangible performance outcomes. This paper examines how Social Workplace Innovation (SWI) can be harnessed within formal organizational structures to support the EU2020 Strategy's goals of smart and inclusive growth. Using a sociological institutionalist perspective, the study explores the dynamics between SWI, formal organizational processes, and broader institutional influences. The research draws on the CLLD/LEADER program, where Local Action Groups (LAGs) operate within formal structures to foster social innovation. The findings reveal that while SWI often emerges as a reactive response to institutional barriers, these innovations are typically spontaneous and driven by employees rather than being formally embedded as organizational norms. This paper highlights the implications of these findings for the concept of formal organization, especially in the context of ongoing polycrises such as pandemics, economic downturns, and climate change. The study argues that formal organizational structures, such as the EU LAGs, play a crucial role in institutionalizing and sustaining innovative practices, ensuring that they become an integral part of the organization's operations rather than temporary, ad-hoc responses. By examining the CLLD/LEADER program, the research offers insights into how formalization can either support or constrain innovation, ultimately contributing to a broader understanding of the role of formal organization in addressing complex and distributed challenges in today's world.