In today’s world of exponential change and technological disruption, encouraging innovation on an organization-wide scale is key to helping your organization leverage Hard Trends and use them to anticipate what’s to come. To help achieve that, there are various ways to adequately nurture and ultimately sustain an innovative culture. These ways are included, but not limited to, financial rewards, time off, and the flexibility to work remotely from a place that’s inspiring, oftentimes easily from home in today’s connected world.
But, no matter if it’s a question of innovation or really any organizational goal a company may have, a salient principle holds true: Reward the behavior you want to spread throughout your company or department.
In working with all sorts of organizations, I’m often surprised how often this relatively simple yet powerful idea is overlooked. But understanding it and applying it on a consistent basis can and will help boost the organizational goals that you wish to achieve, especially innovation, being one of the most fundamental pieces of anticipating change and turning disruption into opportunity.
Changing a Sales Direction
Here’s a scenario of inadvertently overlooking the essential value of rewarding desired behavior. Let’s say a real estate brokerage has traditionally emphasized selling newly built single-family homes, where every realtor working for the brokerage is hungry to sell these larger homes to first-time home buyers that have the money.
However, let’s now say that the brokerage wants to focus just as much if not more energy on selling real estate to individuals looking for moderately priced yet newly remodeled and flipped homes to those first-time home buyers instead, which many first-time home buyers tend to look for, as the younger generations now seek affordable and new, rather than new, large, and far outside of their price range.
Despite management’s direction to move toward renovated instead of new builds, relatively few realtors from the brokerage add the service to their existing client base within the first few months, leaving management puzzled and circling back to see what the issue might be. As it turns out, the brokerage’s commission formula is still heavily tilted toward selling smaller numbers of larger family homes as opposed to larger numbers of smaller, renovated homes or even fixer-uppers—the very focus the owners wanted to change. Thus, there is no concrete incentive for realtors to change gears when they’re still treading water in the shallow end.
The ultimate solution is simple and quite obvious: The brokerage decides to make selling a flipped home more lucrative for its realtors in the way of commission structure. In turn, the realtors are incentivized and see a much greater importance on selling flipped houses rather than selling a few new builds to a generation that can afford them but is generally downsizing.
Innovate First, Reward After
In a sense, the real estate brokerage was asking its employees to innovate—by shifting their sales focus to newer, more innovative products and solutions. But rewarding desired behavior can prove very powerful and, in all honesty, essential when building a culture that encourages innovation at all levels of an organization.
It has been noted in past articles that, when hard-pressed for an answer, many individuals working within an organization to this day feel that they should be part of the innovation process and unfortunately are not involved in it whatsoever.
The reason for this is often due to the fact that the value of organization-wide innovation is halted by the company’s failure to provide employees with the necessary means to pursue innovation. This includes funding, personnel, and other practical means of support in order to take innovation from the drawing board and manifest it into something real. Recently, a shift has occurred, where there is funding and support, but what is missing are incentives and rewards.
Therefore, rewarding desired behavior of employees at all levels within an organization is an absolute necessity. Keep in mind that if you wish to nurture innovation at all levels of your organization, make certain that suitable support, rewards, and benefits are in place to effectively encourage it and allow it to spread company wide.
The same holds true for whatever behavior or results you wish to foster outside of innovation, be it a newly introduced product or service you want your sales force to promote or a pervasive culture where innovation is everyone’s responsibility: Encouraging the behavior you desire mandates a suitable reward structure. Yet keep in mind that you must put these concepts into action and not let them simmer too long, as word will spread fast that it may just be mere lip service and not taken seriously.
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Originally published here.