Strategy. Innovation. Brand.

factors promoting innovation

Extrinsic, Intrinsic Creativity

I love my work.

I love my work.

When I think about motivating people, I often think about extrinsic factors. What can I do to provide incentives to guide another person’s behavior? This usually involves rewards of one type or another – perhaps money or praise or recognition.

If we want to stimulate creativity, however, Teresa Amabile argues that we need to pay more attention to intrinsic motivation. As Amabile writes, “When people are intrinsically motivated, they engage in their work for the challenge and enjoyment of it. The work itself is motivating.” (Amabile’s article, “How to Kill Creativity” is a classic).

So how do you improve intrinsic motivation? Basically, it’s about leadership, culture, and values. I used to think that intrinsic motivation – being internal – was not subject to external factors. But Amabile’s research leads her to conclude that, “…intrinsic motivation can be increased considerably by even subtle changes in an organization’s environment.” Amabile outlines six factors to consider.

Challenge – this is management’s ability to match the right job to the right person. The ideal job stretches a person but not to the breaking point. To do this successfully, managers need to understand their employees quite well.

Freedom – there are many ways to develop a road map of where we’re going. Whether employees are included in the process is not crucial to creativity. What is crucial is giving employees a lot of latitude in determining how they’re going to get there.

Resources – the big ones are time and money. Setting unrealistic deadlines can derail creativity. (For more about time as a resource, click here). Money can also affect creativity. As Amabile points out, keeping resources too tight, “…pushes people to channel their creativity into finding additional resources, not in actually developing new products or services.” On the other hand, beyond a certain “threshold of sufficiency”, more money doesn’t help.

Work group features – designing a diverse team is critical. If everyone on the team thinks alike, you won’t get creativity. If people from different disciplines collaborate, they may just mash up ideas in very innovative ways. You need diversity, but you also need someone who can help diverse people collaborate – not always an easy task. As Amabile points out, homogenous teams often have high morale but low creativity. Managing morale on a diverse team may be more difficult, but the dividend is creativity.

Supervisory encouragement – we all need encouragement from time to time even if we’re intrinsically motivated by our work. A crucial factor is what happens to a new idea when it’s first proposed. Is it a positive experience? Or is the proposer raked over the coals? Do staff members show how “smart” they are by being critical? Does the idea become a political football? (The concept of Innovation Free Ports addresses this).

Organizational support – individual supervisors can be encouraging, but the entire organization needs to support creativity. This is all about leadership, culture, and values. For instance, information sharing is critical to creativity. If your company culture creates a competitive internal environment where information is hoarded rather than shared, you won’t get creativity. If your culture emphasizes “go along to get along”, you won’t get the diverse ideas that stimulate discussion and creativity (and discord, on occasion).

As you’ve probably guessed, it’s all about people. Take the time to understand people – and their desires and motivations – and you’ll be well rewarded.


The Most Innovative Companies of 2012

many small light bulbs equal big oneBoston Consulting Group just published its annual (since 2004) ranking of the 50 most innovative companies in the world. BCG polled 1,500 executives and asked them to rank companies by innovation. More importantly (from my perspective), BCG asked the executives about their company’s plans, strategies, and tactics regarding innovation. You can find the entire report here. I’ll summarize some of the key findings below.

Perhaps the most important finding is that investment in innovation has recovered from the turmoil of the recession. Seventy-six percent of executives said that innovation is a “top three” priority — the highest level in the survey’s history. And they’re putting their money where their mouth is — 69% said they plan to increase spending on innovation in 2013, the highest level in six years. Further, companies that emphasize innovation tend to generate superior total shareholder returns (TSR). The most innovative companies of 2012 generated TSR premiums (compared to less innovative companies in the same sector) of 6.3% over three years and 3.5% over ten years.

How did these companies become so innovative? BCG identifies six key factors:

Get customers involved early — innovative companies get customers involved to generate new ideas and to separate the wheat from the chaff. One of the key reasons to involve customers is to ensure that weaker projects “fail fast and fail cheap”.

Use data to drive tough decision making — it’s hard to make tradeoffs among promising projects. Which ones will succeed? Which ones will simply be distractions? The most innovative companies allow executives to make firm decisions for “the right reasons on the basis of the right data”.

Think strategically about tradeoffs — “Best practice companies do not make [tradeoff] decisions in reference to last year’s budget but rather on the basis of the size of future opportunities.”

Ensure senior leadership commitment — “The most commonly cited force driving innovation was the CEO.”  I don’t mean to brag but this is exactly what I found in my dissertation, a study of innovation in colleges and universities in 1984. It’s the person at the top who sets the innovation culture.

Envision innovation as a holistic system — don’t just try to optimize one piece of the puzzle. Create a strong vision for the need for innovation throughout the company and then build the enablers, including culture, processes, and organization.

Optimize intellectual property to create value — lots of companies have bright people. The most innovative companies also have collaborative processes and decision rules to create and capitalize on intellectual property.

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