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We Are Family - Managing Innovators

How do you manage a team of innovators?

No that’s not the start of a joke. It’s a serious question. Do you take a command-and-control approach? Do you try to motivate innovation with financial incentives?

If only it were that easy.

Research from various fields adds up to suggest that effective management of innovators requires a different approach. In the Journal of Product Innovation Management, researchers show that of three managerial control mechanisms – market (financial control), bureaucracy (command control), and clan (social control) – the one that is significantly more correlated with effective innovation is clan control.

Yet social control mechanisms are not often consciously employed by managers trying to drive innovation in their organizations. Why not? Because social control is inherently intangible. It’s fuzzy, difficult to measure, gray. The cause-and-effect relationships are difficult to know, and are frequently not rational.

So managers will often employ market and bureaucratic control systems instead, due to their clear metrics and enforcement mechanisms.

The Innovative Brain on Money

What’s the problem with using money to motivate innovators? Don’t they want to be rewarded for their efforts? Isn’t it appropriate to reward those who create value for the organization?

Of course it is appropriate to reward those who deliver value. The danger, though, comes when they are focused on such rewards. Behavioral research shows that money has a powerful impact on the way we human beings think. That impact is surprisingly detrimental to innovation teams.

In the research, test subjects were given challenging tasks to do – some of which were even impossible. They were allowed to collaborate with each other, and to ask for help from the testing staff. The control group simply worked on the tasks. The test groups, however, were “primed” with references to money, with some told to think about smaller amounts, others told to think about larger amounts.

This mere reference to money “led to reduced requests for help and reduced helpfulness toward others.” The subjects primed with thoughts of money “preferred to play alone, work alone, and put more physical distance between themselves and a new acquaintance.” Such behavior was made worse when the greater the amount of money involved in the priming.Team collaboration is critical for innovation efforts.

Innovation Requires Collaboration

Working effectively across different organizational functions and interacting within extended networks are critical for innovation outcomes. Focusing teams on financial rewards actually makes them less likely to succeed with innovation efforts.

This is compounded by the issue shared in an earlier blog, that once social norms are replaced by market norms, it can take a long, long time for the social norms to regain any potency. Clearly, managerial reliance on monetary or bureaucratic control systems has potential to adversely impact an organization’s ability to innovate effectively, and the negative impact can be enduring.

How, then, do managers implement social controls effectively? We'll address that in the next blog post.

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