Incentives are killing innovation


Product development is not the same as innovation. But as long as people are paid to perform to a traditional 12-month cycle, true innovation is under threat.

Attitudes to work are changing. Just this month a breakthrough company in San Antonio announced that, on top of their habitual mini-sabbatical of one week in every seven, employees will qualify for a year’s paid sabbatical after six years of service.

Effectively they’re saying, flog yourself (you’re going to anyway) for five days a week for six weeks, then take a week to recover – or start a side project or whatever, but go. When you have done that for six years, go and take a long time away. We love what you’ve done. We want you to stay. Go and live off us for a year but don’t call. Just go.

When companies try to make the staff feel loved by putting in table football or handing out Fitbits, the effect is felt for a few weeks or maybe months before people start to lose interest. Millennials aren’t bothered with jobs for life. They want a contract and after two or three years they move on, having learnt skills they can sell to somebody else. It’ll take more than table football to hang on to them.

People are starting to favour a more transient, less materialistic lifestyle. They’re tending towards different experiences and that means the most elusive and valuable commodity is time.

So how do companies attract and retain a workforce that is habitually moving on? How can you keep the best people? The San Antonio guys are tying their staff in for six years: risky? Of course. At the end of the sabbatical, the employee may just not go back. But think about it. Being in a job that gives you a year off is probably the ultimate table football ruse. Where else can you get similar benefits?

Today’s workers have new and different aspirations. We need to think differently to attract them. Graduate recruits have left companies before the end of the Leadership-Fast-Track-To-The-Stars programme because they weren’t allowed to develop an innovation. A major brand house was unable to attract a single internal application for a director-level position. The previous incumbent had had three great years but the stretch target for the fourth year was impossible to hit. She left and the rest of the company wasn’t interested. Talented people are frequently frustrated at being unable to make a dent in a rigid decision-making process.

Short-term, results-based, 12-month cycle thinking is good for employment agencies. No-one else. If annual performance incentives and a few share options are the best you can offer, you might be looking at an increase in recruitment fees.

Or you could take a look at your innovation strategy. If your culture is to do the same old, same old, your new intake won’t be able to create new and challenging customer solutions – and they will leave.

Innovation is at the root of everything in product and service industries. It’s your people that get it done.

Intelligent application of artificial intelligence. Innovation justified.

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