Motivate and inspire employees: innovation through incentives

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Text comes from: Lean Startup: Schnell, risikolos und erfolgreich Unternehmen gründen (2014) from Eric Ries, published by Münchener Verlagsgruppe (MVG), Reprints by friendly permission of the publisher.
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So far, it was about the freedom of choice of innovators. However, this presupposes one thing in advance: that the innovator or innovationTeam also feels personally responsible for the innovation and considers this as his work. In addition, the corporate structure can not only provide financial incentives. Best of HR –®

Here writes for you:


Eric Ries 80Eric Ries has established the lean start-up method and made it popular.


From the author:


Start-up teams must act autonomously

When it comes to creating innovations, have great ones Company one major disadvantage: their sluggish structures and long communication channels. Lean start-ups offer decisive advantages here.

However, StartUp teams need to be fully autonomous in order to develop and launch new products within their limited mandate. You must be able to design and execute experiments without having to seek approval from different parts of the organization.

StartUps should be cross-functional, that is, composed of full-time representatives of all functional departments of the company involved in the development or launch of the first products.

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The brakes of the long way

They must be empowered to develop and introduce market-ready products and services, not just prototypes.

A long journey through the licensing institutes slows down the construction-measurement-learning feedback loop and affects both the learning process and the self-responsibility. Such obstacles should be kept to a minimum during start-ups.

Curb fears in the parent company

Understandably, the extent of this power of action can trigger fears in the parent company. To curb these fears is one of the important goal of the third requirement, which should be given in a start-up.

However, autonomy presupposes self-responsibility. For this reason, entrepreneurs should have a personal interest in the outcome of their creative activities.

It depends on personal commitment

In the case of autonomous new projects, this integration is usually achieved through stock options or other forms of capital participation. But personal interest does not always have to be financial.

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This is especially true for non-profit or governmental organizations with no primary profit-oriented objectives. And that is exactly what the next and last part of our series is all about.

"I had more to lose than others"

An entrepreneur, who led his own division in a large media group, once told me:

“Apart from the financial incentive mechanisms, I always felt that I had to lose and prove more than others because my name was on the office door. This feeling of personal responsibility should not be underestimated. ”

Are bonus systems useful?

For this reason, it has been proven in many companies to create incentive systems for innovating, through which innovators and innovation teams develop a personal interest in the company's success

If a bonus system, for example through shares, is used for this purpose, the greatest incentive mechanisms should be linked to the long-term performance of the new innovation.

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The Toyota system

For example, the parent organization can clarify who is the originator of the innovation and ensure that it has the merit of having launched a new product - if successful.

This success recipe has also proven itself in profit-oriented companies. At Toyota, the manager responsible for the development of the new car models carries the title shusa or chief engineer:

The vehicle is the work of the chief engineer

With Shusa being referred to as weighty project managers in US literature, this designation does not do justice to its role as the leader of the design team.

At the Toyota employees, he is chief engineer and the vehicle under development is considered to be his work. As we were assured, the Shusa has the final word in deciding on every aspect of automotive development.

Unclear reward systems do not help

There is a well-known technology company that is credited with an innovative culture, but on closer inspection the list of innovative products is disappointing.

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The company proudly displays an internal reward system that relies on substantial financial and status gains for employees with outstanding performance; Nobody knows who might be considered by the management.

Little desire for risk

There are no objective criteria on which the teams can assess whether they have won the lottery in this lottery, which has great influx. There is little hope that they will be recognized in the long term as the originator of an innovation.

As a result, they are rarely motivated to take risks, and they prefer to focus their energy on projects that can be in the hands of management.

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  1. Albrecht

    After a short break again a very interesting contribution to the topic Lean StartUp. Keep it up!

  2. Elizabeth Birnbaum

    What form of advice do you offer?

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