Monday, May 26, 2008

The Currency Of Ideas

Note: This is the 2nd article in the “Why Johnny Can’t Innovate" series.

Last year, I introduced six observations on how innovation, in any sized organization, is likely to fail before it begins. It’s been a bit longer than I would have liked to discuss these observations in detail (ironically due to a very busy schedule of innovation projects and initiatives I’ve been facilitating with my clients). A silver lining to this delay is that I’ve had even more time to observe barriers to innovation at some of the biggest and brightest product development companies in the world. What I have observed during that time has only reinforced my conclusions. Left to one’s own resources, innovation initiatives are likely to fall victim to a number of highly efficient and skilled predators. However, there is hope.

I’d like to invite you to consider a very human barrier to innovation, and explore with me the question of incentive.

What motivates a person to innovate? This is a question that I visit each week with my clients, either directly or tacitly. In the past few months, I’ve had numerous opportunities to think about the question of incentive.

When I originally started writing this article last year, I was flying from Boston to Milwaukee, making my way to the city of Racine, WI. Racine is home to an icon of architectural design and innovation. SC Johnson’s corporate headquarters is the home of Frank Lloyd Wright’s later industrial design masterpieces (and a National Historic Landmark), the Johnson Wax Administration building.

Wright’s design pushed the boundaries of engineering design in both form and function. Most notable of his design choices is in the Great Workroom, in which giant dendriform columns rise from their 9-inch diameter bases to their 18 feet diameter platforms like giant lilypads. Wright’s design contradicted or outright violated many of Wisconsin’s building codes of the day and generated significant controversy.

Why did Wright put forth such a radical design? In his own words during construction of the project, Wright felt that “Architecture is that great living creature spirit which from generation to generation, from age to age, proceeds, persists, creates, according to the nature of man and his circumstances as they change.” Wright had (as with many of his later projects) been given a platform for his expression. His design of the administration building was the ultimate work-for-hire. He had been granted a license to express his brand of original ideas which would last far beyond his lifetime and be a standard to which others would be judged. If any one of us were given such license in our works, our responses would all be some variation of “how cool is that?!?”.

Such opportunities present themselves to us far more frequently than we realize, but without the fanfare (and perhaps the expected recompense). In my experience, anyone who is put into a position to be creative (artists, scientists and engineers alike) seeks respect, validation and recognition for their ideas. Often, the personal need for idea validation is as or more important than the desire for financial reward. I find that, in product innovation, companies miss the opportunity to reward their employees’ creativity with currency other than dollars, euros, or physical tokens of exchange. An inability of a company to recognize creative innovation activity among the ranks forms the foundation for a culture of mediocrity. Where this disconnection is more pronounced, innovation often becomes a crisis response (usually with an executive mandate) to a lagging performance in the marketplace or a sudden wake-up call by a new competitor.

So what currencies can companies use to spur innovation?

From my vantage point, I’ve seen many companies' typical reward systems to “innovation on the job” translate as: job security; peer recognition; publication (including patents) and cash bonuses that are tied directly or indirectly to sales performance.

I’d like to suggest that applied psychology plays an essential role in sustainable innovation, just as much as methodology or tools. Tokens of psychology are perhaps the one form of currency where all of us can literally print money, but few of us do. Some aspects of psychology are short-lived. Others have much longer impacts and actually multiply when shared across groups of people. Successful innovation managers I have observed keep this issue top of mind. Psychological rewards affect individual, group, and corporate performance, not as some overbearing big brother culture, but as communities of practice. The financial and physical rewards frequently follow almost automatically.

One example of applied psychology to promote successful and sustainable innovation is internal publication and internal marketing of innovation activities. Ad-hoc publication of individual or group research and discovery goes a long way to inspire others to create and innovate. Simple blogging tools and the freedom to use them are ways of creating innovation spaces that take on lives of their own, and offer ways of communicating ideas that are often lost in traditional meeting settings or conventional communication channels such as e-mail and standardized project reports.

Internal marketing activities that tell the stories of innovation activities within and across a company often reinforce feelings within individual contributors that they are part of something larger than themselves, and that they have an important role to play. One company I’ve observed actually goes as far as to create an almost “Heroes”-like comic-book poster campaign that adorns the walls of their research centers, showing the current status (with regular updates) of key teams and where their ideas are in the chase of key product initiatives.

At the end of the day, we are all human, and any initiative we undertake, whether it’s fixing a widget or designing a corporate headquarters facility is met with the same question – “What’s it to me?” While there are obvious tokens we will seek in establishing the value of work we might undertake, other factors which speak at a psychological level may have significant sway.

In the pursuit of repeatable and sustainable innovation, the successful patron of ideas, for any purpose, will have more than a few psychological quatloos in his or her billfold.

1 comment:

Ging-er (n) said...

as always I enjoy your observations and the almost uncanny written representation of them. A delight to read.
Two of my own observations -
"Incentives to create" tap into a much more fundamental risk aversion that companies seem to develop at the point (as I have observed) when headcount broaches the number of people one can feasibly remember - that point of not knowing the majority of employees.

I believe there is much the corporate world can relearn from the academic one it seems to leave behind.
The generation of IP is often leveraged above the professorial or budding PhD student level with the owning institution sifting through research to understand the value of a research groups activities. Any institution worth its academic halo has independent mechanisms for realising the value of its community of diligents. I wonder at times whether this rather less streamlined approach would benefit companies who profess and push the development of leading innovation (not just fast following). Much as companies have led the way in pushing research developments at the university level, so too can learned institutions show companies the value of being flexible in the IP and creativity that their employees develop. A good idea is exactly that - whether it is inline with the current product evolution or not.

So, as far as rewarding creativity, there is an opportunity for it to move both ways.
Be creative, I will reward you.
Be creative, I will recognise you. Be creative, I will support you.
It is this support and the resulting benefits reaped on both sides that leads to many an academic spin-off (and occasional happy company spin-off). On the face of it a good deal of the largest corporations tumbled out of a well supported and academically generated "good idea". Intel, HP, Bose, Genentech, 3Com, Texas Instruments.....and those are just the ones from MIT.
I've observed it too often that a "good idea" remains only that because the reward to turn it into a "great idea" was not apparent or encouraged. How many companies prune the IP just because it lies outside their perceived portfolio of product offerings?

I wonder if anyone at Polaroid showed their boss a photodiode and suggested it could be used as "cool" electronic paper.