Ways of improving Innovation - Booth School of Business Study

Hello and welcome!

This is the first of my five blog posts on the topic of encouraging innovation in the workplace. I found five reputably sourced articles and videos discussing the topic and summarized them.

To begin the discussion on encouraging innovation, what is even innovation? As per the Webster Dictionary it is defined as a new idea, method, or device: novelty; the introduction of something new (Innovation Definition & Meaning - Merriam-Webster). That means innovation is not necessarily a new invention, but a better way to do something, change a process or improving a product. 

The article from the University of Chicago discusses four approaches that companies can use to encourage innovation based on a study conducted by Michael Gibbs, a clinical professor of economics at the U of Chicago's Booth School of Business, and his co-researchers. The team analyzed data from an  IT-services firm with over 70,000 employees.

These are the four key points of the article:

1.     The company in the study had an idea portal, which is an intranet-based tool that allows employees to submit and track new ideas. The portal encourages transparency and collaboration among employees, leading to a host of new product ideas and operational suggestions. These idea portals can help create a culture of innovation where employees of every level are encouraged to share ideas, leading to creative and better solutions.

2.    The study found that rewards can bring in good ideas which is contrary to the belief that incentives do not and cannot spur innovation. In the study conducted, employees were awarded points and prizes for their ideas, which in turn motivated them to generate even more and higher-quality suggestions. Even after the experiment of rewards ended, the effect of good quality ideas persisted. It is important to note though to be cautious with the design of a reward system to ensure it promotes the right behaviour.

3.    The third point brought forward in the article to encourage innovation is to “court longtime employees”. The study revealed that while younger employees may offer more ideas, the quality of their suggestions is often lower than those of experienced employees who might bring fewer but still have the lead with better quality ideas. Innovation benefits from experience within the same company and with the same clients.

4.    Using data and analytics can help track and analyze employee innovation effectively, which is helpful if not necessary to build a successful idea pipeline. Companies need to show employees that their ideas have the potential to improve the company. Analytics allow companies to test and refine policies before implementing the on a larger scale, ensuring that each suggestion can be taken seriously and provide a clear path to execution. This response encourages employees to keep making suggestions and ensures that innovation is rewarded.

All four of these approaches, when used together, proved feasible for the company in the study and can also help other companies foster a culture of innovation and harness the creative potential of their employees.

This is the article from Booth School of Business in Chicago:

Four Ways Companies Can Encourage Innovation | Chicago Booth Review

I hope that in my career I will be able to implement at least a few of these ideas. They seem almost too good to be true, but when thinking about innovation, it makes sense how getting ideas from employees in conjunction with rewards can make a company grow and embrace new ideas from new and young employees but even more so from experienced, senior employees. It may seem like there would be too much information to process with ideas coming in but with proper data management and analytics it could actually be possible for this change to happen in any company.