Money: Bad for Ideas
Money motivates. People tend to like it and usually want more of it. However, is it helpful in encouraging and getting innovation?
I want ideas; I’ll pay for them. It’s almost crude in it’s approach. Nobody likes to think that they can be bought for a certain price. However, when it comes to innovation, it is often the default.
Innovation is Not Invention
Let me lay my cards on the table here; I believe using money as a motivator can be immensely destructive!
Innovation is not invention; innovation is a team activity. Having an idea is one thing, but to make it better needs others to get involved. And to get it implemented, that takes more people. Innovation is about implementing ideas and to achieve it, you have to share, work with others and give credit. I have to let go of my idea as mine and mine alone, otherwise that is all it will remain, just an idea.
So to this team sport of innovation, we introduce an individual monetary reward. This begins to create an interesting dynamic. Where we needed collaboration, we have just forced someone to share his or her potential winnings. Who likes doing that? I’m happy to help you, but what’s my cut? Before the financial reward, there wasn’t a problem, but now things have just got complicated.
Innovation history is littered with programmes that have been damaged by monetary rewards.
I personally experienced the effect of unhelpful financial rewards. It seemed like such a great idea at the time, but oh, how little we knew! Let’s give the idea giver that comes up with the most valuable implemented idea in the year 10% of it’s first year value.
It sounded exciting, enticing and engaging. And it was, to those that won it, but those who didn’t, and there were a few, started to grumble. The person with the second most valuable idea was not recognised in the same way.
Idea values started to be inflated, idea givers would question the value assigned. It wasn’t pretty. It certainly wasn’t easy. We managed our way through it, some folks were very happy, but the 10% reward bought the engagement that we hoped for when it was first announced.
At least we didn’t offer to give a financial payment to every successfully implemented ideas. I’ve heard of companies that did this, and there are whole teams and departments dedicated to valuing ideas and making the required payments. What an efficient innovation programme…not!
Examples and Application
From experience, I have found out that if you think creatively, there are rewards that are highly valued by employees, but that can cost relatively little. I know of a large supermarket, whose HQ building was designed for 900 people. It had grown to house over 2000 people. Nobody had an office, not even the CEO. It was squashed. However, the biggest nightmare was parking.
The building had very few parking spaces outside the office building, if you were late; you were in the public multi-storey car park like everyone else. The reward that everyone in that building wanted was the Golden Cone. The Golden Cone gave the holder a parking space outside the building’s entrance. People fought hard for that prize!
You may not have a parking issue, but there will be incentives that you can provide that are highly sought after. The corner office for a week, the best chair, development opportunities, conferences, sabbaticals, job swaps; you know what they are.
So if you are designing or redesigning your incentives around innovation, here are some pointers to help shape your thinking.
1. Think intrinsic rewards, not just extrinsic. I wrote a previous post dedicated to intrinsic rewards, but your reward program must aim at motivations and engagement. It will require some creative thinking on your part, but it will be worth it.
2. Get leadership skin in the game. Innovation is risky, and if you want your people to take risks, the leadership team need to give of themselves. The leadership team need to demonstrate how much they value innovation from their people, and the rewards will do this. It is “easy” to give the company’s money. The book “Ideas are Free” gives an example of a CEO offering to clean a idea giver’s car at lunchtime; an extremely powerful statement!
3. Recognise all innovation roles. Don’t just reward the idea givers, but ensure that innovation rewards provide recognition for everyone who has helped to bring that idea from concept to reality. Remember, it’s innovation is a team sport, so reward the team.
4. Measure the effects. Measure and test the effects of the rewards that you offer. Check they still motivate, and if they don’t, change them. Don’t be afraid to innovate your innovation program!
5. Reward for BAU. Ultimately, the intention of most innovation programmes is to embed innovative behaviour into the organisation, making innovation business as usual. Ultimately, you need to ensure that innovation rewards link with the corporate reward structure.
I am really interested to hear what rewards have worked to encourage innovation in your organisation — please do share them with me!