Innovation: do not forget to pay employees for their ideas!
The latest issue of Harvard Business Review has a cool forethought on innovation titled “$152,000 for your thought” (not online yet and requires subscription).
What the authors found is that the average employee reward to savings or increased revenue from innovation ratio is about .001% or $100 for a $10 million idea. The result is a very broken idea generation process in most companies. The authors suggest that companies raise the bar and require employees to prove and document the viability of their ideas in return for much richer rewards - as much as 50% of the first year’s savings or increased revenue. Doing so can significantly increase the number of workable innovations - they found by as much as 20-40%.
The story that led to the title of the article is that of a $38,000 executive assistant at a consulting company who came up with an idea that saved the company $304,000 and walked away with a $152,000 bonus.
[Tags: innovation idea management]
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