in Management

The best innovation program isn’t a program at all

Most innovation programs are broken

Most innovation programs are broken

Despite 1000s of years of evolution and countless books and studies on human motivation, we’re still using the Innovation Program and it’s cousin, the Suggestion Box, to inspire people to create change.

These devices – and the general “let’s offer a prize!” mindset at work – are overused, demeaning, and ineffective.

If you want to improve work, there’s a better way to bring good ideas to life.

How to disappoint people 97% of the time (or more)

The problem with most innovation programs is they ask for ideas and then apply a filter to reject most of them. This week, Nick Milton posted a cogent argument on “Why the Funnel model doesn’t work for small process innovations”:

“I saw a presentation the other day from one company which included a description of their Ideas process. This process was like a suggestion scheme, based on a funnel model, with online submission, and a series of filters which refined the idea until it was accepted. The presenter describing the system said that ideas were sought on improvements at all scales, and that to date they had received 35000 ideas and implemented 1000 of them.

You can hear this statistic, and think ‘Hey, great, 1000 implemented ideas’, or you can think ‘Hmmmm – 34000 disappointed people and wasted opportunities’.”

This kind of ratio applies to most idea programs. mystarbucks, for example, is one of the most celebrated suggestion programs, recently celebrating their 5th year and the 275th idea they’ve implemented. But that was out of over 150,000 submissions.

Of course it’s nice for people to have a voice. And sometimes, like Starbucks, you need significant resources to change products or processes. But for most improvements, the act of filtering out the vast majority of ideas using a central decision-making body, typically people who are far removed from the work, does more to kill innovation than promote it.

The place for prizes

One of the motivations for people to submit a suggestion in the first place is often a prize of some sort. Perhaps an iPad or gift card or recognition on a corporate website.

And sometimes prizes do produce results. The Royal Society of the Arts, for example, produced 1000s of innovations in the 1770s from the spinning wheel to advances in naval construction. The more modern X Prize helped launch the private spaceflight industry.

But in the successful examples, the money wasn’t simply for an idea. Instead, it was to provide resources to implement the idea or to otherwise reward people who had to expend considerable resources on implementation. The real motivation comes from the ability to implement as well as the potential rewards after the idea is implemented.

At work, a small reward for simply having an idea is patronizing and perhaps worse. There’s plenty of research showing that offering monetary rewards actually limits creative thinking. And when there are successful programs – as with Toyota’s famous suggestion program seeing over 80% of the ideas implemented – it’s not because of better prizes, but because people intrinsically wanted to make their work better. And, as Nick Milton points out, because the suggestions they made were approved in a localized, distributed process by people much closer to the work.

A different approach

Want innovation? Connect people.

Want innovation? Connect people.

And so, the best innovation program isn’t a program at all. Because what firms need isn’t soliciting more ideas and waiting for managers to do something with them.

What they need are new ways of  bringing ideas to life. New ways for people who are passionate about something to find each other and experiment with implementation so they can drive change.

One of the best and cheapest ways a firm can increase innovation in this way is to connect employees with a corporate social network and encourage them to use it. Since creating such a environment, we’ve seen improvements in customer service, elimination of waste, executive communications, and other areas. The innovations with the biggest commercial and cultural value never came out of a program and there were no prizes. Instead, the spontaneous online movements were motivated by intrinsic rewards of peer recognition, learning, social connections, and making their own work better.

Want more innovation? Remember that passion and perseverance among connected individuals trumps an idea in the hands of management.

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  • http://samgambledotme.wordpress.com gamblesam

    Good headline and article John… I liked Nick Milton’s line about 34,000 disappointed people. I pretty much agree with everything except for the following:

    I would argue your assertion that one of the “One of the … cheapest ways a firm can increase innovation in this way is to connect employees with a corporate social network and encourage them to use it”. Not that you need me to tell you this :) but properly implementing a corporate social network can be quite effortful!

    It seems to follow for me that in fact doing the suggestion box / prize method is the “easy way out” for companies to say “we tried!” – even though a lot of effort can go into executing these initiatives. You identify above what is personally my biggest demotivator: “the act of filtering out the vast majority of ideas using a central decision-making body, typically people who are far removed from the work, does more to kill innovation than promote it”… and particularly where there is no feedback at all on the idea that one perhaps spent quite a bit of effort conceiving and documenting!

    • http://johnstepper.wordpress.com John Stepper

      Thanks for raising this point: If innovation programs are so ineffective, why have them?

      Perhaps the answer is in a post from a few months ago – Why smart managers do stupid things. Part of the answer is habit. Part is that’s its all they know how to do when seeking innovation. That they’ve seen other firms do it (or have read about it). And part is simply ignorance about human motivation.

  • http://samgambledotme.wordpress.com gamblesam

    HBR Blog article talking about a similar topic – http://blogs.hbr.org/cs/2013/04/the_new_kind_of_worker_every_business.html

  • http://houldsworth.wordpress.com Barry Houldsworth

    Many companies claim they want innovation and innovative employees but then punish people when their ideas don’t pan out exactly as planned. It doesn’t take long before people say “Why would I stick my neck out on something new when there’s a good chance I’ll be penalized for it?”

    Innovation requires an understanding that you can’t stumble if you’re not in motion and until companies understand that failure is an important part of long term success little progress will be made.

  • Cornelia Levy-Bencheton

    Another great post, John. And, thank you.
    I relate to the 34,000 stat and also agree with the de-motivator remarks from your prior commentator –and from personal experience. Here’s my story: worked hard with a colleague on identifying a new process/ practice and submitted it to “corporate” using a flashy platform for such things developed by Ideo (I think). It was all going to be so cool. Right? Wrong. Because, net net, we were told the process was already being used. Of course, where was never specified. Certainly not in the USA, their primary territory. Nothing much ever came from their whole exercise either.

    When things like this happen, I want to add that a company loses credibility and this bogus attempt to involve their employees in innovation and sharing only decreases the propensity for employee participation in the next go-round of solicitations. It’s too bad.

    Cornelia

  • http://www.elseinc.com Robert Drescher

    Hi John

    The problem with passing up suggestions to upper management and most being rejected is that often small fixes that improve something for just one or even two employees get ignored, but these small fixes can actually setup other opportunities for bigger gains. The reality is that all ideas other than the ridicules few should get attempted, if nothing else you learn something about what doesn’t work, but you always learn, and only from learning a lot of little things, can you finally get to those occasional big innovative ideas. When you are killing most ideas you are in fact killing learning along with motivation, so the odds of ever getting one of those great ideas actually declines.

    Also by not allowing a lot of ideas to get tested and many to get implemented, you are making it harder when inevitable major change is required. Major change is always easier in organizations experiencing minor change all the time.

  • Andy Davies

    Great blog John – thanks for sharing your thoughts

  • Danny Golding

    Totally agree about top down innovation programs. Our’s effectively got closed down after all the good ideas got bogged down in one committee or another, or languished for months in the suggestion box (well actually a spreadsheet in a locked down network folder).

    Social software can definitely foster innovation. At its best I have seen it used by employees to make their own innovations without the need for any input from management at all.

    However fostering a culture where employees are encouraged and allowed to innovate – and sometimes get it wrong – seems to be as important as having the right social software tool. There are still too many manager who complain if their staff embark on “unauthorised” initiatives – by which they really mean they want ideas to go through the same kind of decision by committee process that killed our innovation program in the first place.

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