Research about motivation, performance and creativity of employees typically provides fascinating and sometimes conflicting results. Value-creating ideas are very important to companies and managers alike. So, what can you do to increase these ideas in your company? The general answer is to raise the degree of autonomy and to stimulate innovation. The former is generally accepted; the latter not so much.
“people will be most creative when they are primarily intrinsically motivated, rather than extrinsically motivated by [...] the promise of rewards” — Amabile, 1997
High-powered rewards are often thought to “crowd out” intrinsic motivation.
But is this true?
Baumann and Stieglitz (p. 359) provide some good thinking and creative research on this:
“While prospects of higher rewards translate into higher search efforts among employees, higher-powered incentives also fuel the rivalry for complementary resources, as more projects compete for selection. More intense competition, in turn, has a dampening effect on search efforts, as it decreases the individual prospects of securing a reward.”
Using a computational model, Baumann and Stieglitz show the following:
- Companies can increase the number of good ideas (and a few exceptional ones) by providing low-powered rewards to employees for ideas;
- Providing high-powered rewards increase the potential number of good ideas (not exceptional ideas), but due to increased competition there is also a decreased likelihood of acceptance of ideas and this will lead to reduced search behaviour.
Research on strategy peaks my interest. Even more so when this research has been conducted by researchers from my country of residence (Switzerland)!
In a recent issue of the Strategic Management Journal, Markus Menz and Christine Scheef discuss the upcoming role in the executive suite: the Chief Strategy Officer (CSO).
This relatively new phenomenon has been exploratively studied in qualitative fieldwork from 2007 onwards. The incidence of the Chief Strategy Officer in S&P 500 companies is evidence for its quickly rising popularity.
But why do company’s have CSOs and what is it that CSOs do? The presence of CSOs increases with a company’s total diversification, acquisition level and the role interdependence of the top management team. A company’s size and alliance does not affect the presence of CSOs. Also, the presence of CSOs cannot be linked a company’s financial performance.
Chief Strategy Officers typically manage a company’s strategy process (competitive and market analyses, long range planning, monitoring of strategy implementation). Moreover, CSOs are responsible for strategy execution of business and corporate development activities, such as mergers and acquisitions and alliances.
The question whether a CSO is a fad remains open. What this research contributes to practitioners is a reasoning for when – and when not – to consider a CSO. The key questions should be about the level of structural and strategic complexity and about the frequency and complexity of business and corporate development. High level of complexity and frequency could legitimate a specific CSO role – If not, the CSO role remains with the CEO.
So, what is the first thing you do when you enter a hotel room? Most will check the bathroom… or the bed sheets. And when these are nice and clean do we make a little dance and are over the moon?
No, this is what we expect. These are the hygiene factors. However nice and fancy your hotel room might be, if there is a cockroach in the bathroom or the bed sheets dirty we will turn around to never return. However, once the hygiene factors are in place we are ready to enjoy the advantages of the product or service on offer.
In all product and service offerings there are hygiene factors and motivators. The latter are what customers truly enjoy, while the former provide the foundation of this enjoyment. How do your customers experience your product or service? In a recent Harvard Business Review issue there is an article titled: “an Anthropologist walks into a bar…” If you want to understand what is truly happening to your customers you need to observe them in their natural habitats as an anthropologist would, and define the problem you face with your product or service as a phenomenon (e.g. From “how can we create a premium offering in coffee” to “what is a good coffee experience” .
Typically, this way of observing the customer will provide surprising insights and can point to the proverbial cockroach in your bathroom. Most of the time what dissatisfies your customer is not the opposite of what makes them happy and satisfied. And, the hygiene factors are typically not as obvious as a cockroach in a bathroom or dirty bed sheets.
If you feel powerful in your team setting chances are you will not only resist your fellow team members’ ideas… your team’s performance will really suffer (59% vs. 76% of goals achieved). And… this power effect already happens when you merely think about a time when you had power over someone…
The antidote? Think about times you accomplished huge challenges with the help of others. Good luck.
Source: Daily Stat
In a recent issue of the Harvard Business Review you will find a list of 36 effective methods for innovation based on the work of the Luma Institute. These 36 methods fall into three broad categories each breaking down into three subcategories:
- LOOKING: observing human experience through ethnographic, participatory or evaluative research;
- UNDERSTANDING: Analysing challenges and opportunities through people & systems, patterns & priorities and problem framing;
- MAKING: Envisioning future possibilities through concept ideation, modelling & prototyping and design rationale.
Together these different categories and subcategories can make up your path of innovation.
What’s your preferred path?