Does Your Incentive Program Reward Results or Behaviors?

by Stefan Lindegaard

Does Your Incentive Program Reward Results or Behaviors?Who gets rewarded for innovating in your organization? Is it only those teams that manage to successfully carry an idea all the way through to a lucrative reality? What happens to teams that work on ideas that did not pan out? Are they heckled for their failure or do they also get some positive recognition when (if) they come away with valuable lessons that will help them (and other teams) do better next time around?

As Scott D. Anthony once noted in a blog post, “getting world-class at innovation requires moving beyond rewarding results to rewarding behaviors.” The thing is that when you reward only positive outcomes, people quickly learn to become risk-averse. By only rewarding success, you are apt to end up with a portfolio full of incremental (i.e., safe) innovations. In such a climate, breakthrough innovations, which inherently involve a high degree of risk and oft-repeated failure before success is finally achieved, will fall by the wayside.

Obviously, I’m not saying that those who achieve incremental innovation success should not be rewarded. Clearly, they should. But teams that accept greater risk and then learn from the inevitable stumbling blocks along the way should also be recognized in a positive light. It is the learning behaviors they are exhibiting that are the true drivers of a culture of innovation. They are building innovation muscle that will serve your company far into the future.

What are you ideas on how incentive programs can provides reasons to learn from failure? In other words, how can a culture in which “fail…learn…succeed” is an acknowledged and accepted part of the drive for breakthrough innovation be encouraged?

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Stefan LindegaardStefan Lindegaard is an author, speaker and strategic advisor who focus on the topics of open innovation, social media and intrapreneurship.

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