How Do You Reward Innovators?

By Greg Holden, Business Writer & Social Media Manager, IRI

In his keynote address at an IRI Annual Meeting, Bernie Meyerson, Chief Innovation Officer at IBM, said “the talented techies are the rock stars; these are the people that make it work. If you don’t value them, you lose them.” Highlighting the focus of organizations to favor non-technical employees, Meyerson was making the point that innovation comes from the technical people. And, without an effort to make the people that innovate happy, the entire organization suffers. IRI members talk about this. It’s one of the subjects discussed frequently in our Community Forum in myriad ways.

From Big Rewards…

Rewarding and recognizing technical talent comes in many forms. When our members asked about how others in the community reward innovation, the responses focused primarily on the big annual prizes offered by their firms.

“Yes we do offer innovation awards via a trust fund a former CEO created for young technologists in R&D,” wrote Julie Strasemeier, Global R&D HR Systems Manager, Procter & Gamble. “The number of awardees varies each year (5-10) and the dividends from the trust are evenly distributed to the winners ($8-12K). We also provide a crystal plaque with the monetary award and present it in front of our R&D organizations.”

These large prizes are quite common. Jules Blake, writing at the time as an IRI Emeritus and former VP of R&D at Colgate-Palmolive, wrote that he created the “President’s Award for Technical Achievement” at Colgate, but his HR department would not let him distribute cash. The prize therefore became a free trip to any scientific conference anywhere in the world, which the R&D people loved.

Luc Adriaenssens, SVP of Technology at CommScope, wrote that his company awards patents, both at the time of filing and the time of issuance in order to incentivize the inventor(s) to be responsive to attorney reviews. According to Adriaenssens, sole inventors at CommScope can be awarded as much as $3,000 per patent ($1,500 at filing and $1,500 at issuance); two inventors can earn $2,000 each over the entire process; and, three or more inventors will receive, as a group, $2,250 at filing and the same amount at issuance, split evenly among them.

Another form of large-scale reward is issuing the title of “Fellow” to a top scientist or engineer.

“The title ‘Fellow’… is the penultimate rung on Eastman’s technical ladder,” said J. Stewart Witzeman, IRI Emeritus, and Laurie Motz of Eastman Chemical Company. “We have detailed criteria for all levels of the technical ladder, but the brief version of expectations for Fellow is that they have a sustained track record of technical accomplishments that have had significant and corporate level business impact. We expect our Fellows to lead by example as well as through influence.”

…To Small Prizes…

But innovation rewards also come in smaller packages. Not every company or R&D unit has the additional funds available to pay out large prizes for technical accomplishment. Justin French of Pepsico wrote that he implemented a “Bagel of the Month Award,” what he called “a simple and silly reward and recognition program.” He would buy a large party bagel and present it to the winner chosen by a rotating committee each month. The winner usually shared the bagel with the whole staff afterwards. Later on, he said, the program became so popular that the winner also got a small bagel attached to a plaque as part of a take-home prize.

Don Piehl, an IRI emeritus, wrote of a variety of small prizes his company offered which included breakfast recognition town halls for creative thinkers; monthly drawings for iPads, parking spaces, or vacation days for inventors who achieved a certain process milestone on a patent application; seed funding (under $25K) for crazy ideas voted on by a council of peers; and, even just the opportunity to present project updates to senior leaders. Giving technical workers that kind of exposure went a long way in helping them throughout their careers.

In her recent article on Vistage, Elisa Spain wrote about her friend, someone who works at a large, R&D product firm that churns out new products regularly. Her friend said that simply presenting an idea to an innovation team is worthy of a $200 bonus, which becomes $2,000 if the idea is selected to move forward. Not every idea is chosen, obviously, but the rewards program does its job of soliciting ideas from the creative people staffing the R&D department.

…Innovation Excels When Incentives Are Present

All of these aforementioned rewards and prizes are part of a bigger picture. As Spain mentioned in her article, “Innovative companies, like my friend’s company, take creativity very seriously. Innovation isn’t an end result (for example, a successful product), it’s a plan of action, a series of concrete activities — including false starts — just enough of which lead to successful products.”

A common mistake when trying to understand innovation is to view it as a lone inventor having an a-ha moment that leads to a breakthrough. This is the exception, not the rule. Most innovations are incremental or even simple improvements to how things get made (i.e. process improvements). Breakthroughs are relatively rare, but an organization that does not solicit ideas from its people, or effectively take those ideas and act on them, will experience breakthroughs even less frequently.

Studies show that large rewards may not be necessary since smaller, low-scale rewards are just as effective. Other studies show that monetary rewards are less important than rewards that grant recognition or status. However, what none of these studies show is an organization that does better without rewards than one that uses them.

Rewards, in whatever form they take—be they cash prizes, parking spaces, trips to conferences, or even a large party bagel to share with the office—are essential in incentivizing people to open up about what they’re thinking. Maybe their idea is groundbreaking and they want to keep it to themselves so they can one day form their own company around the idea. Maybe their idea is simply a recommended material to use in place of the one already being used in order to save money while making product molds. Either way, without a system in place to entice them into sharing that idea, there’s a chance they never will.

What does your organization do to solicit ideas from its staff? Are you satisfied with the amount and quality of ideas produced by your existing rewards programs?

Let us know in the comments!

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