Innovation, KM, collaboration and other knowledge-intensive programs depend on people contributing ideas, helping others improve ideas and generally, sharing their knowledge. There’s a general belief that incentives can improve outcomes of these programs but no clear guidelines on how or what to reward. It occurs to me that incentives must consider the employee investment in these initiatives (not just the organization’s investment and expected return).
From the employee’s perspective, participating in these programs presents several personal dilemmas.
A “power” dilemma: In contributing ideas and knowledge, an employee sacrifices some personal power within their organization. The knowledge and skills they’ve gained from education, work experience and personal effort is their means to compete for job positions, financial and non-financial rewards and career advancement. It is also the means to gain acceptance into the enterprise’s power centers (social entry and inclusion in important work and with important people).
A “market value” dilemma: An employee’s experience, skills and knowledge are the source of their value in the talent market (within their own organization and in external job and resource markets). Sharing ideas and know-how and more importantly, capturing this in rich explicit form, may dilute or diminish an employee’s market value, rendering him or her less-competitive in the overall talent market. Capturing ideas and knowledge may also diminish the contributor’s role or value as a collaborator within communities or one to one situations.
A “creative freedom” dilemma: By participating in group or team endeavors, individual employees give up some creative freedom. If they reuse others’ ideas and practices, for example, it negates the need for them to create new solutions. While reuse raises the organization’s productivity and intellectual assets, it lowers the reuser’s perceived level of contribution and creativity.
The organizational implications of these dilemmas are not easily addressed. For example, simple activity measures, such as the number of ideas contributed by each employee, are not enough – instead, we need to measure the quality and relevance of ideas and knowledge. Further, if contributed ideas and solutions are reused by others, then credit for increasing returns and ongoing recognition must accrue to the original contributor. Also, organizations must determine the value of active collaboration and helping others improve their ideas. These are just a few examples and digging deeper into the three dilemmas will reveal others.
My conclusion? Organizations must understand the investment expected from employees in innovation, KM and collaboration programs. And, Incentives must reward the current and future value of ideas, knowledge and skills.
6 responses so far ↓
1 Chris Townsend // Mar 18, 2009 at 2:01 pm
Kathy, I think you’ve got it right, but only for an innovation system/app/program that’s being managed poorly (or insufficiently, or not at all). This is the mistake that sooooo many of today’s orgs make. They assume that innovation is a plug-and-chug type of corporate program.
The truth is that although good innovation programs *do* have the ability to scale powerfully, they are NOT programs that simply run on autopilot. Instead, they require oversight, supervision, and ongoing course corrections. In short, they require *management*. This is why I belief that it’s important to refer to the discipline first and foremost as “innovation MANAGEMENT.” The key to success is in exploring that crucial second word — management.
In this sense, the best innovation mgmt programs (already! today!) avoid the dilemmas you raise because they manage the endeavor in a way that avoids a race-to-the-bottom. How to do this is complicated and depends heavily on the rhythm and “DNA” of the org in question. Structurally, the task is similar to being mayor of a town or the head of a mid-size govt agency. Regardless, the point is that best-practice innovation mgmt *cannot* create purely transaction-based economies of scale.
The crux is in designing the innovation program based on relatively illiquid “social assets” — such as people’s professional reputations, their ability to explore new and interesting work, etc. Spigit, for one vendor example, has already made some really successful strides in this direction with their ReputationRank algorithm. The impressive market success speaks for itself — cashflow positive within their first two years, and still growing fast. And Spigit is far from alone (although they work particularly well as an illustrative example of the concept).
In short, there is already significant real-world evidence that social incentives are most effective for designing real-world innovation programs (unfortunately, much of my specific case-study knowledge is locked under NDA and strict confidentiality covenants). When managed skillfully, “fuzzy” social parameters — personal reputation; the ability to work on more interesting projects going forward; greater visibility and professional connectivity with other creative types; etc. — are far more effective at structuring innovation than the commoditized transactional parameters that serve as the fundamental assumptions driving your comments. I strongly recommend exploring such issues more deeply in subsequent posts and in your future research work.
2 Frank Hood // Mar 18, 2009 at 4:12 pm
Kathy,
The dilemmas you mention are real, but can’t be solved by a technological fix. My company prides itself as working as a company of the whole rather than individual teams responding to individual clients. Our organizational DNA (a term coined by my company) is such that we reward sharing and innovation. Sharing and mentoring are required parts of our daily work and rewarded as such.
Many web 2.0 initiatives rely on Dan Bricklin’s Cornucopia of the Commons effect (http://www.bricklin.com/cornucopia.htm), and companies where the culture runs counter to sharing are going to have a hard time competing in those arenas. Unfortunately it’s not a simple fix. It has to be built in to the whole way the company does business.
3 Kathy Harris // Mar 18, 2009 at 6:21 pm
To Chris Townsend. Thanks for your thoughtful comments and contribution to this topic. I agree that the best innovation programs have managed these dilemmas well.
Just to clarify, this post (and all the prior ones) are meant to be relevant to managing innovation. I guess I assumed this was clear so I’ll think more about my titles and introduction in the future!
And I have a breifing scheduled with Spigit in early April so I’ll let you know what we discuss in the briefing.
4 Kathy Harris // Mar 18, 2009 at 6:40 pm
To Frank Hood.
So glad you commented — very thoughtful. I especially like your comment “my company prides itself on working as a company of the whole”. That kind of synergy and a culture of sharing are indeed requirements to succeed in the future business environment. Companies must become much more aware of their DNA and how to reshape it when required.
5 Doug Brockbank // Mar 19, 2009 at 11:21 am
On my blog, entitled, “Why Knowledge Management”, I wrote about internet trends which may offer insights into recognition and reward programs which can incentivize the knowledge worker to share their knowledge-
“Fortunately, leading edge practices on the Internet today give insight into value propositions that give incentive for the knowledge worker to engage. And these technology best practices are likely to become common practices in our organizations tomorrow.
For example, I can download a program off of Downloads.com, write a review and become a “top contributor” if enough people appreciate my review…T
The knowledge worker says, “Why should I share my knowledge if you can lay me off and then replace me with an unskilled worker?”
On the other hand, the organization can’t really guarantee anyone a job. The key then is to identify those who are sharing their knowledge so that decision makers can identify the knowledge contributors. Companies who create a knowledge sharing culture, derive the benefits of this shared knowledge as less skilled workers are empowered with know how.
The value proposition for the knowledge worker must then change to say, “It’s not what you know, but what you share that counts.” Only then will the knowledge worker buy into the idea that collective knowledge is better than knowledge you hoard. And he or she will change from one who hoards knowledge to someone who champions or markets it to others….”
6 Kathy Harris // Mar 20, 2009 at 11:30 am
Doug — thanks for your comments. I agree that the internet gives us clear insight into the incentive and reward systems of sharing and contributing — whether in the context of KM or innovation or customer service or whatever.
Also, from my recent experience and discussions with Gartner clients, there is renewed interest in KM. This is probably the third discernable wave of interest in the twelve or so years I’ve covered this topic. The difference this time is the opportunity you described Doug for better understanding of the social and behavioral aspects of KM.
For many organizations, this third wave can move their KM efforts past the singular focus on content management and into true knowledge sharing and creation. Organizations can follow (and easily replicate) the inherent practices of many web applications. For this reason, there is an opportunity for far more progress than in past KM efforts.
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