HBR stats : Rich Incentives for Innovation Yield a Flood of Mediocre Ideas !

February 24, 2014

Research Finding : 

Rich Incentives for Innovation Yield a Flood of Mediocre Ideas ! 
Researched Fact : 
Offering employees equity stakes and other lucrative incentives to spur innovation raises their output of MEDIOCRE ideas but does nothing to stimulate real breakthroughs ,  which are stubbornly rare ! 

 For example, a policy increasing employees’ share of innovations’ profit from 10% to 90% would more than double the flow of incremental suggestions, creating a torrent of mostly UN-USABLE ideas, while the number of radical innovations would rise by virtually zero ! 
 Companies would do better to offer low-powered incentives for innovation, the researchers say.

Lesson : Reconginze, reward fairly . But do not appeal to greed in people . It backfires ! 
Research Conducted by :  Oliver Baumann of the University of Southern Denmark and Nils Stieglitz of the Frankfurt School of Finance and Management in Germany

SOURCE: Rewarding Value-Creating Ideas in Organizations: The Power of Low-Powered Incentives
Courtesy : Harvard Business Review