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It is neither the business models nor the products that are innovative, but rather the minds behind them. Hence, nurturing a culture where people are willing to generate and execute on creative ideas is an essential skill for every innovation leader.

Many companies are wasting a lot of potential when it comes to creativity in the workplace. According to studies published by Adobe (2016) and Gallup (2018) independently, more than 50% of employees are not engaged at their workplaces, while only one-third feel assiduously and positively engaged at work. The so-called “active disengagement,” as Gallup notes in another report, costs more than half a trillion dollars per year in the U.S. economy alone (State of the American Workplace – 2013). Taking leaves of absence, delivering poor customer service and negative energy between coworkers contributes to much of this issue. However, these factors have a direct impact on the workplace culture and thus on innovation capabilities. In other words, high engagement and a creative workplace culture drive innovation and outstanding business outcomes.

In recent years, we at The Mindshift® (and at the Sonophilia® Creative Leadership Forum before establishing The Mindshift) have been informally interviewing hundreds of executives, team leads and employees in global companies. Time and again we noticed that how people defined an innovative workplace was closely linked with leadership practices and the creativity culture these leaders were able to establish. Regardless of the industry or the scope of responsibility, the leadership styles of successful innovation managers bore certain similarities to one another.

Three determinants emerged from our observations as to what motivated people most to perform at their best. We realized that, whether intuitively or consciously, great innovation leaders understand the importance of satisfying their employees’ main needs of: Self-Actualization, Recognition and Community.

Self-Actualization: Leaders must help their people locate and build upon their strengths in order to excel at what they do.

In most of today’s advanced societies, where basic human needs are fortunately covered, we seem to have arrived at the top of Maslow’s Pyramid. The 21st century is shaping up to be a time of self-actualization, in which most people prefer to work on realizing their own ideas rather than working for others’. Our interviews showed that outstanding managers are highly ambitious themselves, while acknowledging that their employees also have ambitions. To understand the intrinsic motivations of their people, these leaders regularly engage in dialogue with them and monitor team performance. In doing so, they can distill the strengths of the individual members, and accordingly, reorganize teams and assign tasks with clear accountabilities. As a result of a skillful distribution of responsibilities more people are given a chance to excel at what they do best.

If it feels positive, it feels right: Ownership and purpose are tied to successful self-actualization

One surprising aspect we encountered in our interviews was the relationship of ownership and purpose with the perception of individual success. When people could self-actualize and felt successful at what they did, they seemed to think of their work in a more positive light. Thus readiness to take ownership and find meaning in the work by inventing a purpose story for themselves was evident. In this sense, purpose was a positive justification as to why people do what they do. Consequently, these employees were much more reluctant to the idea of leaving their company.

Recommended Action: Humans thrive and grow by building on their strengths in moments of so-called optimal experience (flow). In moments of flow, we are at the height of our creative performance and can self-actualize by putting our ideas into action. Thus we experience the activity at hand as intrinsically rewarding and motivating. Observe your coworkers to determine their moments of optimal experience; what tasks do they enjoy and master quickly? What tasks do they handle most creatively? Step by step, give them slightly more challenging assignments in a similar realm. Choose your battles wisely; don’t lose time by trying to correct all of their weaknesses. Contrary to common belief, we think that if you push too hard to get your employees out of their comfort zones, they tend to panic and shut down. Meet them in their moments of optimal experience and take it from there.

Recognition: In order to motivate high performers and set an example for others, leaders need to recognize outstanding performance openly and publicly with the appropriate act of appreciation.

In one of the interviews we conducted, a mid-level manager of a major German car manufacturer told us about a significant discovery he had made in his free time, which consequently helped his department save over one million euros in one annual quarter. The recognition he received, however, was a mere pat on the back from his superior and five thousand euros on his paycheck (the company had reduced working hours to cut labour costs the previous year, thus working in a person’s free time was greatly discouraged). Quite rightly, this manager felt resentful and unsure whether he’d do the same thing again. Unfortunately, this case is one of many. Almost everyone we interviewed had encountered a similar account of poor recognition at some point in their career.

Rewards

When asked what a more substantial reward system would be, almost all of our interview partners agreed that they’d appreciate a symbolic act of recognition (intangible reward) over a monetary reward (tangible reward), especially if the monetary reward was disproportionate to the value generated (barely 0.5% in the case above as opposed to at least 5 – 15% for higher management in the same industry). More than 50% of our interviewees said they’d also appreciate being asked about their preferences.

Recommended action: Money is not a motivator, nor is a simple pat on the back. In fact, most employees think of cash rewards as the most primitive way of saying “thank you”. A study done with over 290 companies by Aberdeen Research shows organizations that provide non-cash reward/recognition perform three times better than others on average. According to our survey, some of the well-received, non-cash rewards include special employee privileges such as professional development opportunities, executive coaching, opportunities to lead projects/teams, work/life balance support programs, flexible working hours, career planning help, public recognition programs (i.e. award ceremony, employee of the month) and more job autonomy. Recognizing outstanding performance not only flatters employees, but also sets a good precedent for others to follow in their footsteps. The key lies in finding a good balance between cash and non-cash rewards depending on the three Ps: Performance, Position and Preferences of the employees.

Community: Leaders of innovation need to go the extra mile to establish not only a feeling of safety, belonging and identity, but also of inspiration, intellectual exchange and connection to an influential external network.

To our ancestors, community meant first and foremost solidarity for survival. In today’s developed world it means mainly emotional safety, a sense of belonging and identity. According to our findings however, at an innovative workplace, employees’ expectations from an auspicious community go even farther.

Networks, Inspiration and Feedback

Firstly, people want to be embedded in an internal collaborative body while also being linked to an external network of influence through a positive brand image. Secondly, high performers want to be surrounded by other high performers and inspiring peers who strive for excellence. Additionally, we found that while intellectual discourse and regular round table discussions on work-in-progress were highly appreciated, most of our interviewees didn’t want to attend daily meetings that lasted for more than 20 or 30 minutes. Moreover, less than 10% of the interviewees felt that a culture of failure, critical feedback or unsolicited advice added any value to their overall performance. On the contrary, high performers didn’t tolerate failure, especially if it they felt it was due to incompetence. Furthermore, judgemental criticism was clearly rated counterproductive. Rather, what they preferred was an independent, trusted management coach who would help them improve on their leadership and communication skills (this finding interestingly correlates to a recent Harvard Business Review article on Why Feedback Fails, where the authors cite neurological research and argue that “focusing people on their shortcomings or gaps doesn’t enable learning. It impairs it”).

Recommended action: Community is doubtlessly one of the most vital aspects of the workplace culture and has an impact on almost every aspect of the business. Without a supportive, motivated and functioning community, efforts to create an innovative business and a successful brand will fail. Therefore, we advise taking community building efforts very seriously and laying a solid foundation to support your human capital at work. Throughout this process, communication will be your most essential tool. Firstly, in today’s free information world, we recommend making little difference between internal and external communication; secondly, we suggest working hand in hand with your HR department and CEO; and thirdly, we recommend creating a positive feedback culture. In general, you will need to communicate very clearly what your expectations are to set the groundwork for behavioral value alignment for existing as well as for future employees. One simple but effective exercise is to choose up to five adjectives that constitute the core values around which people can connect and always act/communicate accordingly – especially if confronted with a problem (i.e. respectful, positive, creative, fearless, mindful). Another good practice is to organize regular community events to connect your internal as well as external networks. As one of our fellow CEOs once put aptly: “At the end of the day, all business is people’s business.”

About the author

Seda Röder, Managing Partner at The Mindshift®, is a leadership expert for innovation management and creativity culture. Ms. Röder is a specialist in scaling innovative output in organisations and provides leaders with tools to reinvent their innovation process to utilise their assets effectively. Ms. Röder is a professionally trained concert pianist and an exceptionally eloquent public speaker. Additionally, she is the founder of the Sonophilia® Network; a global think-tank for creative leadership and cross-industry collaboration with over 400 members from the international technology, arts, business and science realm.

Listen to this podcast to find out what roles curiosity and humility play in innovation.