Need for Incentives, and other Innovation Myths

April 11, 2011 · · Posted by Jordan Frank

In our own Customer Forum, Rolf Isaksen (click here for blog's main page) recently asked: "Why do we need incentives to share?" Some of the follow-on conversation converged on "we don't" with some good pointer to experience and research supporting that premise. Rather, focusing on intrinsic motivation rather than rewards can net greater benefit and long lasting E2.0 success.

Brian Tullis referred to the way in which conducting work activity in a visible E2.0 environment leads to motivation and ultimately high performance:

Activities -> Visibility -> Connections -> Purpose -> Motivation -> Engagement -> High Performance

This, and supporting research he points to by Adam Grant (which comes via Daniel Pink) are referenced in Brian's blog post "Whats the Vis." In simple terms - consider whether the motivation individuals harness by seeing the results of their work. Without "observable work" there is no way to connect one's own actions with the results (positive or negative) that they have on the organization. Sales systems may tell us who is closing business, issue management systems may tell us who closes the most customer support issues and how quickly, and observable work in collaborative social software systems may tell us who is contributing to the work process, idea flow, and problem discussion and resolution. By omission, social software systems can also tell us who is not involved.

Yes, there are all kinds of incentives built into a work process built on social software - but not the kind of "dollars for ideas" incentives that fail.

The Grant research concludes: "Three field experiments with fundraising callers and lifeguards suggest that mere exposure to task significance cues can enhance job performance by fostering a deeper understanding of the social impact and social value of one’s work." There are many ways to provide feedback about task significance in terms of sales results and customer satisfaction, but few so direct as the flow of communication when you engage in observable work patterns where you can gain a sense for your own ripple effect in an overall activity stream.

The 5 Myths of Innovation published in the December 2010 MIT Sloan Management Review by authors By Julian Birkinshaw, Cyril Bouquet and J.-L. Barsoux adds more fuel to the fire for intrinsic motivation. They identified the following 5 myths:

  1. The Eureka Moment
  2. Built it and They will Come
  3. Open Innovation is the Future
  4. Pay is Paramount
  5. Bottom-Up Innovation is Best (see our various thoughts on bottom-up approaches)

For the scope of this line of thinking on Incentives, the Pay is Paramount myth was especially revealing. The authors state:

Extrinsic rewards such as money are usually secondary, hygiene-type factors. The more powerful motivators are typically "social" factors, such as the recognition and status that is conferred on those who do well, and "personal" factors such as the intrinsic pleasure that some work affords." They add "psychology research that individuals view the offer of reward for an enjoyable task as an attempt to control their behavior, which hence undermines the intrinsic task interest and creative performance."

So, do we need incentives? Certainly not, at least if you an incentive is dollar and action/response based. Incentives are desperately needed in the form of systems where the "can-know" audience can observe the work done by individuals, where participation is appreciated in an outright way, and possible and actual outcomes are communicated to individuals during the course of work and after it's actual impact has occurred.