How to determine what rewards matter to employees

In the field of enterprise innovation, rewards programs are a relatively common component. This is a response to the fact that participating in innovation often comes on top of an employee’s existing duties. Organizations want the cognitive diversity, they want novel ways of addressing needs, but they also need to satisfy customers and keep the lights on. Rewards programs are put in place to provide additional value from participating in the innovation efforts (on top of the intrinsic motivation to help solve a challenge).

Rewards programs have a well-earned bad reputation for being de-motivators. Simplistic approaches – cash, gift cards, merchandise – can inadvertently wreck employees’ motivations to participate. When done poorly, they become what Daniel Pink described as de-motivators. Which then opens the question…how to do rewards “right”?

I think what matters is the type of work. Even Pink talks about how his research about motivation relates to what he terms “creative tasks”. I want to pick that up and propose the following matrix as a way to think about what rewards matter to what types of employees:

In this matrix, two attributes are keys to understanding what types of rewards would appeal to employees. Ambition level speaks to how much responsibility the person desires to have. And how much impact on the organization’s outcomes the want wants. Cognitive complexity includes what Pink calls “creative tasks”. Work that is more cognitively complex will have a high level of uncertainty, and require learning, trial-and-error and an iterative flow. To help make these characterizations of work more tangible, I’ve added some example occupations for each square in the matrix.

Together, cognitive complexity and level of ambition determine what rewards would hold appeal. If you like tasks that follow well-known rules, rewards that allow you to gain new knowledge are less interesting. If your objective is a paycheck and a great life outside of work, opportunities to meet with the CEO hold little appeal. If one’s interests run toward ways to increase career options and take on greater responsibilities, a $25 Amazon gift card offers little motivation.

I just wrote more about this in my post, Keys to success with an innovation reward program. There, I’ve described a spectrum of rewards that run from cash/merchandise through innovation program options. I map the matrix to those, and provide specific examples where rewards were done wrongly. Learn from those mistakes.

I’m @bhc3 on Twitter and I’m a Senior Consultant with HYPE Innovation.

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Four categories of enterprise gamification

When you think of gamification, what are the common things that come to mind? Points, badges, leaderboards. These items are in the cognitive toolkit. But looking at the sheer variety of game mechanics, you can see that’s it’s a much broader field than that:

Game mechanics list

These 48 different mechanics (via SCVNGR and Badgeville) aren’t the complete list, but they provide a sense for the possibilities. However, the quantity of game mechanics makes its difficult to coherently analyze what, if any, means are relevant for an initiative. I found myself facing that in some work I was preparing for a client. My job-to-be-done? Provide an accessible way to understand the different gamification techniques relevant to crowdsourced innovation.

Having done some gamification work previously as a product manager, I called on that experience and various research on the topic. The following are the categories that made sense to me in the context of the enterprise environment:

Gamification categories

You might notice that I’ve couched the descriptive statement of each in the first person. That fits the approach to gamification, which is about motivations of individuals, what matters to each of us. Here’s a bit more about each.

Achievement: I work to attain an objective. This category calls on the desire many of us for mastery. To be well-versed and proficient in something. There is a sort of competition, but it’s against a standard, a benchmark. Not others.

Recognition: My contribution is acknowledged. Recognition is a form of feedback, an affirmation of one’s capabilities or position and a manifestation of status among peers. Recognition strikes me as the most powerful form of motivation.

Competition:  I compete for a limited number of awards. These gamification techniques appeal to the desire to compete. They can elevate people to moments of excellence in their participation (think of sports you’ve participated in previously). Powerful when used in an appropriate context.  But it’s a category that needs to be treated with care. Clumsy implementation of competition gamification can poison an initiative.

Valuables: I want to secure something of value. Valuables can address avoiding the loss of something or gaining something new. Valuables include the things you might expect: points-based rewards systems. But they can include countdowns to do something (I need to do something before I lose the opportunity), or competition to win funding for an idea, for example. Very useful, but Valuables need to be handled with care to avoid unintended consequences (e.g. high volumes of low value contributions; mindset that participation only happens when there’s a reward).

I’ve applied these different gamification categories to different innovation scenarios in my new post: The gamification framework for business innovation. I also look at the purpose of gamification there, some common misperceptions about it, and five key design principles.

I’m @bhc3 on Twitter, and I’m a Senior Consultant with HYPE Innovation.

Gmail offers surprising innovation lessons for the Fortune 500

If you’re familiar with the story of Gmail, you know – for a fact – that it was a 20% time employee project by Paul Buchheit. A little bottom-up experimentation that grew into something big.

Surprise! That story is wrong.

It was a desire by Google, the company, to offer its own email. From Harry McCracken’s great piece How Gmail Happened: The Inside Story of its Launch 10 Years Ago:

Gmail is often given as a shining example of the fruits of Google’s 20 percent time, its legendary policy of allowing engineers to divvy off part of their work hours for personal projects. Paul Buchheit, Gmail’s creator, disabused me of this notion. From the very beginning, “it was an official charge,” he says. “I was supposed to build an email thing.”

Gmail’s creation has more in common with innovation inside large enterprises than it does with the start-up world. Read on if you recognize these:

  1. Job-to-be-done thinking
  2. Reports of the death of company innovation are greatly exaggerated
  3. Corporate antibodies are everywhere
  4. Senior executive support
  5. Big Innovation takes time

Job-to-be-done thinking

Yahoo email screenshot

Image via Variable GHZ, “Why Yahoo Mail is Still an Epic Catastrophe

Anyone remember life before Gmail? We had low storage limits. ‘OK’ search. Poor spam control. Yahoo, one of the dominant players at the time, pursued the freemium strategy that required paying for more storage and better controls. Which isn’t unheard of, mind you.

It’s just…

Think of the core job-to-be-done: When I want to update others, I want to send and receive communications. Some key job tasks that define that job include:

  • Easily send pictures to others
  • Read emails from real people and organizations that I care about
  • Find old emails when I need them
  • Expand my usage of email economically

Yahoo, Hotmail, AOL were fine as far as they went, but they each were challenged on these key job tasks. Back when I had a Yahoo email, I remember the spam being awful and it seemed impossible to control.

Google looked at the offerings in the market, and recognized an opportunity to better satisfy people’s expectations for these important job tasks. Larger size limits, stellar spam control, excellent search and ongoing improvements through Gmail Labs.

Lesson: ABI (Always Be Improving) on the customers’ jobs-to-be-done. Think of the entire job flow and determine which areas are ripe for a better service and experience. Big companies can too easily focus on executing what they have rather than thinking about customers need. 

Reports of the death of company innovation are greatly exaggerated

Image via Family Life Resources

Somewhere along the line, a narrative has emerged that pretty much every big company cannot innovate its way out of a bag. Admittedly, the increasingly rapid turnover of the S&P 500 and the fast rise and decline of companies fuels this narrative. But it’s glib to say companies just don’t do it.

Google’s 20% time is espoused as the antidote to this issue. Middle management stifling innovation? Let everyone experiment on their own. But Gmail wasn’t a 20% time project. It was actually something planned and resourced for development for the organization at large.

This is an important point. If companies set their mind to innovate in an area, people will contribute and provide fantastic ways to get there. Tony Vengrove advised on a key element for success here:  “A compelling vision statement describes what the company wants to become in the future. It not only needs to inspire but ideally it should inform the innovation agenda.”

Lesson: Innovation is not dead inside companies. It does require leadership to set a vision that employees can focus on.  

Corporate antibodies are everywhere

Google is rightly perceived as one of the most innovative companies on the planet. Given that, one might assume that the innovation wheels are well greased there. But I was struck by these quotes from McCracken’s story about the birth of Gmail:

“A lot of people thought it was a very bad idea, from both a product and a strategic standpoint,” says Buchheit of his email project. “The concern was this didn’t have anything to do with web search. Some were also concerned that this would cause other companies such as Microsoft to kill us.”

Within Google, Gmail was also regarded as a huge, improbable deal. It was in the works for nearly three years before it reached consumers; during that time, skeptical Googlers ripped into the concept on multiple grounds, from the technical to the philosophical. It’s not hard to envision an alternate universe in which the effort fell apart along the way, or at least resulted in something a whole lot less interesting.

Inquisitor vs. Corporate AntibodyIn those two quotes, you see critiques that aren’t really about specific elements of Gmail, the concept.

In Four Personality Types that Determine Innovation Success or Failure, a distinction is drawn between Inquisitors, who reflect thoughtfully on issues facing an idea, and Corporate Antibodies, who just want the idea dead. Here are hypothetical responses to Gmail by the two different personality types:

Inquisitor: “Won’t we spook people when they see ads related to the email they’re reading?”

Corporate Antibody: “Email has become a commodity. There are other products we should be building.”

Lesson: Corporate antibodies will always be with us. Recognize legitimate probing for faults versus efforts to undermine the idea in total. Spend time figuring out how to get around Corporate Antibodies, not appeasing them.

Senior Executive Support

Senior executives matter in innovation

In a land of radical transparency and holacracy, the traditional top-level support needed for initiatives is a thing of the past. Alas, we are not in that land. For the 99.9% of people who live with today’s reality, top-down support continues to be the effective way things get done.

It does put pressure on top executives then. They are held accountable by the C-suite, the Board and shareholders. Already in this post, senior executives are called on to ensure innovation moves forward in two different ways.

Set the innovation course: Leadership – be it in business, community, military – has a role in establishing the objectives for people. Indeed, set objectives and get out of the way. In Gmail’s case, Larry Page and Sergey Brin saw a future that extended beyond just search. Paul Buchheit was charged to figure out what a Google email app would look like.

Remove obstacles to innovation: We saw previously that Corporate Antibodies are alive and well. But they didn’t stop Gmail’s progress. From McCracken’s article: “Fortunately, the doubters didn’t include Google’s founders. ‘Larry [Page] and Sergey [Brin] were always supportive,’ Buchheit says. ‘A lot of other people were much less supportive.’ “

Lesson: If senior management isn’t paying attention to innovation, it’s a safe bet no one in the company is either. Employees respond to the agenda set by executives. Organic growth comes from a clear focus that involves executives and employees.

Big Innovation takes time

One of my favorite perspectives on innovation comes from Jeff Bezos. In an interview on Harvard Business Review:

ADI IGNATIUS: Jeff, you’ve said that you like to plant seeds that may take seven years to bear fruit. Doesn’t that mean you’ll lose some battles along the way to companies that have a more conventional two or three-year outlook?

JEFF BEZOS: Well, maybe so, but I think some of the things that we have undertaken I think could not be done in two to three years. And so, basically if we needed to see meaningful financial results in two to three years, some of the most meaningful things we’ve done we would never have even started. Things like Kindle, things like Amazon Web Services, Amazon Prime. The list of such things is long at Amazon.

2014 2019Note that he’s referencing Big Innovation. Concepts that are market changers. There are plenty of opportunities for small-ball innovation (or improvements). But for the really big stuff, executives need to back away from the notion that it can be done in one year.

This was seen with Gmail as well. It was in the works for three years before it was launched to consumers. Continual effort was applied to the product features, the user experience, the business model and the infrastructure to support it. During this time, the project was assailed internally, but as noted previously, senior management supported its ongoing development. Similar to the way Bezos sticks with groundbreaking projects for the long term.

Lesson: Senior management must recognize the magnitude of the innovation it seeks and commit the right time horizon, resources and support to it. This applies for small ball innovation and Big Innovation.

Google, of course is now a HUGE company, on par with the biggest in the world. Its Gmail experience provides valuable lessons for Fortune 500 firms seeking to innovate.

I’m @bhc3 on Twitter, and I’m a Senior Consultant with HYPE Innovation.

Is it innovation or just an improvement? Does it matter?

On the LinkedIn Front End of Innovation group, I saw this post:

Interesting (and heated) discussions @ Unleashing Innovation Summit in Amsterdam earlier in the month: Incremental innovation is NOT innovation – it’s just marketing. REAL innovation is breakthrough/transformational… Agree or not?

I’ve seen this debate before. Attempts to finally, once-and-for-all establish just where improvement ends and innovation begins. People end up with a Maginot Line that fails to defend the sanctity of innovation. Quick: Amazon 1-click purchasing…improvement or innovation?

Does it matter that we define innovation? I once collected a bunch of people’s definitions of innovation to celebrate the multiple ways people think about it. That was a nod to the different ways people think about it. It was divergence, not convergence.

But there are times people want a clearer line between innovation and improvement. Let’s see how some smart folks have articulated the difference.

Perspectives on defining innovation

Scott Berkun: Innovation is significant positive change. This is a high bar, and it should be. What does significant mean? I’d start with the invention of the light bulb, constitutional governments, wireless radio and maybe web browsers. Perhaps you could say significant is a 30% or more improvement in something, like the speed of an engine or the power of a battery. If you know the history of your profession you know the big positive changes people made over the last 50 years, giving you perspective on the scale of brilliance you need to have to be worthy of that word. (#)

Alan Lepofsky: Both innovation and improvement are important concepts, but unfortunately the two terms are often used interchangeably. Innovation reimagines an existing process or market, or creates a brand new one. Improvement enhances an existing process or market, but does not create disruption.  (#)

Chris AndrewsI think your point highlights something important: there’s a pretty fine line between business-as-usual product improvements and real innovation, and it’s important not to confuse the two. (#)

Jon Van Volkinburg: I don’t see innovation as something that merely creates value for a customer and/or for the provider. Expanding or adding a service, feature, or function is not innovation, and these things create value. These things are growth, novelty, and invention. They are great, necessary, and can lead to innovation if the environment and timing is right. If you want, I guess you can call it incremental innovation… but I wouldn’t, to me the term “incremental innovation” is an oxymoron. (#)

What if we actually settled this debate once and for all?

Assume for a moment that we, as a society, agree on what constitutes Innovation. Then what? What is the logical flow of events and decisions that follow such a conclusion?

The reality it that doesn’t matter what something is called ex post facto. It only matters what impact it has on the consumers of the improvation.

Innovation or improvement comic

Before seeking improvation:

  • Understand the problem you’re addressing (no easy task itself)
  • Develop a sense of the magnitude of what’s required (shave a few $1,000? develop a $1 billion market?)
  • Be prepared to follow through on the ideas generated at a level commensurate with their scale

Here, it is important to understand how you define what you’re seeking. And it doesn’t matter whether you call it an improvement or an innovation. Afterwards, after the idea has become real? Again, it doesn’t matter what anyone calls it. It’s about how well it addresses the job-to-be-done. Call it what you want.

You like to-may-to,
And I like to-mah-to…

I’m @bhc3 on Twitter, and I’m a Senior Consultant with HYPE Innovation.