(In the last two weeks I’ve written about the hidden inhibitors of innovation culture. First I wrote about how strategy needs to be rooted in the human experience, and my second blog was about human-centered metrics. This article addresses rewards at work.)
Although organizational culture comprises a wide variety of factors, I believe three of them – strategy, metrics, and rewards – warrant closer scrutiny when the goal is to establish a “culture of innovation”. While these three factors are regularly deliberated, discussed and decided upon by the senior leadership teams, critical blind spots remain. Therefore, it is more likely that leadership creates innovation-inhibiting conditions by agreeing to:
1. An innovation strategy that is not rooted in the human experience,
2. Irrelevant or distracting innovation metrics, and
3. A reward system that doesn’t actually reward the deeper human needs.
Having the courage to go deeper into the realm of “humanness” creates an innovation force multiplier and can dramatically improve the successful innovation culture.
Your reward system is effective only when your people feel rewarded
Innovation efforts by their nature are about experimentation without guarantees for their 
success. In the best-case scenario, innovation efforts can result in new products, services, business models, and business processes. In reality, though, innovation processes tend to produce more “wasted” time, money and effort than results. Is this waste considered a failure in your company? How you deal with this “waste”- as well as the rare successes – determines whether you are working in an innovation-positive culture or not. How people’s efforts are being noticed, penalized or recognized impact people in deeply different ways emotionally.
Just like my own research, various surveys (by Conference Board, CNBC, Deloitte, McKinsey) about the critical issues for CEOs have consistently pointed to the need for innovation and talent – as they go hand in hand. The challenge is how to create a culture that attracts and retains the best talent, fosters creativity and results in innovation. Benefits like foosball and free Coke won’t keep the best people working for you for long. Your rewards for good work results probably include things like bonuses, cash rewards, shares, options, time off, promotions, job rotation, involvement in special projects in other teams, or international assignments. The rewards repertoire is only limited by our imagination. Adding personalization to the standard industry rewards is a way to differentiate.
In any case, I’d argue that the fundamentally best rewards satisfy us emotionally. When we feel seen, heard and known – we also feel we have value and we are appreciated. Sensing that there is value in my personal contributions is at the root of being human. “Without a stable sense of value, we don’t know who we are and we don’t feel safe in the world” (Schwartz, HBR 6/2011). This is not only psychology, but it’s also in our physiology: the cortisol levels rise to “fight or flight” response when prompted by threats to one’s social acceptance, esteem, and status.
In high-stress work environments, it can be challenging to keep up respect for others. Knowing, not assuming, what makes people feel valued and respected can only be found out by slowing down and inquiring with an intent to connect. Creating a feeling of connection requires presence – through eye contact, curiosity, conversation and listening. Time stops – even if only for a minute or two – and that’s when you experience a moment of value creation.
Rewards instill pride, satisfaction, and recognition; however, they are often periodic, and there is time-lapse in between the achievement and the awards. Plaques and award certificates for a job well done recognize something that has been accomplished in the past. Since they point to the past, they also mark an ending in the subconscious mind. The subconscious mind can interpret the recognition of a past achievement as a “tombstone”. Rather than appreciate a person for a job well done in the past, it is crucial to use the recognition pointing to the future: “your accomplishment developed the path to …/ made it possible to move forward with…”
While external awards are nice, creating a work environment where an innovative spirit is encouraged is even better. Nothing beats a rewarding environment which fuels the key intrinsic motivators to support people to do their best. Daniel Pink (author of Drive, 2009), suggests there are three motivators that make our work feel a “rewarding” experience: autonomy, mastery, and purpose. It’s worth testing how your team members feel about these.
• Autonomy: People desire and need to direct their own lives – and how they do their work. Do you allow them flexibility over how, when, where they do their projects?
• Mastery: People want to get better at things that matter. Are you making sure people feel their work matters and that they have opportunities to grow?
• Purpose: It is intrinsically human to need to be connected to something bigger than themselves. Do you regularly help your team members see the link between their job or contribution to the overall purpose and make their work feel meaningful?
If you are asking, listening – and responding – to how people really want to be acknowledged, they will genuinely feel that they are appreciated. As soon as they don’t feel appreciated, you have lost the most powerful innovation force in your organization: the innovativeness of your team.
Human-centric innovation matters
Yes, adopting this human-centric way of thinking into “the way we do things around here” is challenging. Being human – and especially leading and managing people – is infinitely complicated. Emotions play a role at all levels. But people in organizations everywhere yearn for more humanistic leadership. Even at a recent conference on artificial intelligence and machine learning, experts in Seattle were calling for the inclusion of humanities and social sciences in the development of AI to ensure that the human is at the center for new advanced technologies.
The investment in humanity at work is free. Recognizing and accepting that we are emotional beings even at work is the simplest first step. A former CEO of Campbell Soup has held to a mantra: “Toughness with issues, tenderness with people.” Developing cultures where the human experience is at the center results in a higher level of collective human consciousness. When people enjoy emotional wellbeing at work, the ROI of the billions of dollars spent on innovation worldwide improves.
I’d love to hear about your experiences with more human-focused, emotions-accepting innovation cultures. There is no doubt in my mind that addressing all three parts of culture in more human-centered ways becomes a powerful multiplier for a culture of innovation.
What propels me to think and write about innovation leadership is the existential crisis of our life on Earth. My hope is to see as many organizations as possible to be successful in innovating solutions to the world’s most wicked problems. I want every team who has the will, to be innovative and turn that will into life-enhancing solutions for the benefit of all.
I work with companies who care about maximizing their positive impact on the planet and recognize that innovation is the main driver to maintain growth and profitable relevance.
I help leaders expand their approach to innovation from focusing on just technological solutions to creating an environment that unleashes an organization’s capacity and human potential to innovate.
I do this by assessing and applying leadership psychology, interpersonal dynamics, and skills that deepen the innovation process.