Motivation: Hiring and Rewards

Learning Objectives:

• Identify the characteristics of good candidates for innovation teams
• Reflect on organizational retention and rewards for innovation

The other innovation inhibitors described by Teresa Amabile are related to how teams are assembled and maintained over time:

• Hiring based on functional rather than creative skills
• Lack of opportunity, recognition, and rewards

One seemingly simple solution is hiring the right people, but organizations may need to alter their hiring practices for innovation projects. If you don’t attempt to evaluate the creative skills of new hires, it is harder to find the right talent.

Organizations everywhere are hiring to support innovation initiatives. But how many have designed their interview process to test for creativity and problem-solving?

You often need interviews with many people to assess these qualities, and questions designed to bring out the creativity of potential hires. For example, you might say, can you discuss a time when you didn't have the skills to complete a task? What did you do?

While some organizations use puzzles to test for creativity, it is better to assess workplace-relevant problem-solving skills. Group activities are often a great way to get a sense of how people work with others to solve problems.

One final reason to reassess your interviewing practices is this–many mature companies are highly hierarchical and fixed. Innovative individuals sometimes find it difficult to fit in, become difficult to manage, and often get sidelined. Their skills can therefore be difficult to see on a resume.

If you test for creativity in your interviews, you may find an underappreciated, creative thinker who will work well with others if they are placed in an environment better suited to innovation.

When you are building a team, keep in mind that you are selecting individuals who will excel in the environment outlined in the previous article on culture and motivation. These people are not only empathetic but also self-driven—they respond well when given autonomy.

• Consider Google’s famous embrace of side projects. Employees were encouraged to spend 20% of their time on whatever they believed might benefit Google the most.
• The goal of the 20% Project was to encourage creativity and innovation.
• However, keep in mind the characteristics of a sustainable innovation environment: People also need time to reflect and think. It would be easy, without careful management, for that extra 20% to result in people working 120%, which would be counterproductive.
• Although the 20% Project did lead to some time-management difficulties, it also allowed an innovative culture to thrive.

Hiring innovative employees is one step, but keeping them is another. In the video transcript that follows, Phil Gilbert explains how paths to leadership and performance measurement (through NPS—net promoter score) led to sustainability at IBM and elsewhere.

I can certainly tell you two things that I think very strongly.

Number one is, where are your formerly trained designers and design management people in executive ranks? Who are they? How many do you have? And are they across all BUs? So presence in the executive ranks, number one. And that's really a more tactical kind of reflection of, do you have a career path for designers or design thinking skills valued on everybody else's career path. That's number one. And that's pretty easy to figure out.

Number two, what part of your executive performance management system is dedicated to user experience? At IBM, we've made NPS the pervasive one. We have a few others that are operating at smaller scales, but NPS is now embedded into all of our executive performance.

So those two for sure. If you don't have a career path and if you don't value these skills on other people's career paths, your ability to sustain this is probably zero. If you are not compensating executives based on user experience or CX today, then you probably are not sustaining it.

Organizations can dedicate resources to innovation, shift their culture, and lay the groundwork for innovation practices. But they may overlook a crucial part of sustainability, rewarding innovation.

Most rewards are aligned to performance metrics based in the operational world. The question to ask is this: Does your business exclusively reward results, or does it have performance measures that support collaboration, sharing, and learning from failure as well?

For example, you might consider measuring performance based on shared team goals in addition to individual goals. Shared team goals are another way to shift employees' mental energy from the self to the task. They remove competition, but maintain accountability. The specific details of these goals will depend on the business in question.

It is difficult to objectively measure innovation's impact on an organization outside of its context. For example, you could track the percentage of sales from new products. But that figure might not capture whether these new products affected sales of old ones. And while that would probably not be an issue for a startup, it would be critical for a large organization.

Regardless of what you choose to measure, be sure that people are rewarded for it. Are there career paths for innovators in your organization? Without the appropriate performance measures, rewards, and career paths, it is difficult to sustain innovation in the long term.

There are also many ways, beyond compensation and promotion, to reward and recognize excellent contributions to innovation. For example, you could introduce a system for aggregating and collectively rating ideas, so the best ones move to the top and people are recognized by their peers.

So there is individual, intrinsic motivation, and also collective motivation toward the shared goal. Together, culture and motivation can guide even a large organization toward successful and sustained implementation.

In the following video transcript, Frans van Houten describes how Philips motivates its associates in ways that overlap with culture, like tenets and values.

Everybody had to collaborate towards becoming a solutions company. All the LEGO bricks needed to be cohesively a part of an overall solution. That's very hard. And it means that not only do you have to have a shared strategy and vision and North Star, but you also have to have common ways of working, common quality standards, common everything.

People then say, well, that's too complicated. This is a company that has all these requirements. Leave me alone, I'll run my own thing. That is unacceptable. You will never get to the desired result.

So the Philips Business System has six tenets: Strategy, Governance, Processes and Systems, People, Culture, and Performance Management. And we are convinced that all six need to be cohesive. They need to reinforce each other. If only one element points to a different direction, you actually confuse people.

For example, if you say, I want you to go there, but if your incentives or KPIs say something else, all right, I want to be long term, but all my KPIs are on the quarter, you actually are upsetting your own business system.

We have said there are five behaviors that we expect everybody to live up to, values or behaviors: Customer first, quality and integrity always, teaming up to excel, being eager to improve and inspire, taking ownership to deliver fast. So that's the values that apply to 81,000 associates.

Leaders need to take decisions, even if there is uncertainty. We all know that startups are very courageous. Big companies, they tend to become careful, they tend to become slow because nobody wants to take a tough decision. Well, that's what I expect from leaders.