Guest Column - September/October 2014

Innovation Rewards

By Ira Ozer, CPIM, CRP

Thanks to the fast pace of change in technology, media and information, all companies must continually innovate and create new products and services to serve their customers' needs and outpace their competition, or risk the threat of dying within a few short years. Most companies rely on their product development departments to innovate, but the smart ones create a "culture of innovation," which involves all of their employees. Those using best practices include their channel partners and customers, as well. But even smart companies can be dumb if they expect their employees and external constituents to provide their best ideas and collaborate with others to move ideas to profitable new realities without the proper use of incentives and rewards.

According to Gallup, Hay Group and virtually all of the engagement research companies, the majority of employees feel "disengaged" from their companies due to the perception that management doesn't respect them or value their ideas, and due to a lack of recognition. So when chief innovation officers believe that just by giving people the tools to propose ideas, collaborate and innovate on new product and service development, that it will be profitable for the company and that they will do so for a sustained period of time driven by "intrinsic motivation" alone, they are usually disappointed.

As is true for almost any performance improvement initiative, intrinsic motivation is the desired behavioral outcome—in which people are motivated and engaged by the opportunity to participate and collaborate on an ongoing basis with their peers. However, the reality is that people still need tangible rewards and recognition to keep their attention, energy and engagement going. The use of tangible rewards is ideal for these purposes:

  • Enrollment: to gain attention and incent people to register for the program.
  • Fast Start: for participants to take innovation training and initial action steps. This gets the momentum started. It is estimated that 50 percent of innovation, CRM and other initiatives fail because people don't get started using the system.
  • Idea Submission: as a reward for submitting qualified ideas in accordance with program rules and guidelines.
  • Collaboration: for collaborating with others to fully develop ideas.
  • Results: for achieving results upon idea implementation.
  • Cost Reduction: for cost reduction and process/efficiency improvement.
  • Teamwork: for being part of a successful innovation team.

There is a unique merchandising opportunity for innovation programs vs. traditional employee recognition, sales incentive and customer loyalty programs. That is to include merchandise and recognition items that are inherently innovative. In other words, not the same old catalog items, but products that demonstrate the power of innovation, from innovative companies. The obvious examples are iPads, iPhones and other products from Apple, but there are many others, such as experiential resort packages at beautiful and inspirational locations. Beatriz Kasusky, regional sales manager of Meetings and Events for Melia International explained that in addition to using all-inclusive packages for individual innovation incentives, it is ideal to hold innovation training meetings and group recognition trips at all-inclusive resorts. Saro Hartounian, CEO of Harco Incentives explained that his company has created an innovation rewards catalog that is full of innovative items from top brands of consumer electronics and many other merchandise categories.

Just as with any engagement program, the components for designing and implementing an innovation system include:

  • Assessing the current innovation situation and challenges facing the company.
  • Performing participant and/or competitive research as necessary.
  • Designing the best innovation system to fit the company culture and processes.
  • Creating a communications campaign that will engage people throughout the program.
  • Implementing an innovation software technology platform that is designed for "bottom-up" suggestions and "top-down" challenges (problems that need to be solved.)
  • Measurement and analysis to calculate return on investment (ROI).
  • Rewards and recognition that will motivate and engage people to participate, in conjunction with the power of intrinsic motivation.