How to Reward Innovation

by Jacky Habib

3 min read

Having an innovative workplace can often lead to breakthroughs for a company. Whether it’s increased revenues or smoother processes, businesses are seeing the value in encouraging creativity and experimentation among employees.

Shahab Khan, a business mentor at Invest Ottawa, says startups in a growth stage are most suited to focus on innovation.

“If [a company] is in transition or reduction mode, they should be careful because they can’t look at every idea, but if they’re in growth, then they need ideas and should start pushing,” he says.

Encouraging Innovation

Companies like Google, 3M and Samsung are consistently ranked as having the world’s top innovative workplaces. Under the popular 20 per cent rule – which has since been scaled back – Google encouraged engineers and project managers to spend 20 per cent of their time, or one day a week, pursuing projects they’re passionate about, even if it’s outside the employee’s job or the company’s mission.

A strong component of fostering innovation is leadership, and encouraging a healthy attitude towards innovation should come from the top down. One Canadian company that embraces innovation and has seen incredible growth in recent years is Shopify. CEO Tobi Lütke, whom the Globe and Mail named CEO of the year in 2014, is known for eating lunch with his employees and being open to their ideas. Brittany Forsyth, VP of HR at Shopify, says the workplace environment at Shopify is conducive to promoting innovation.

“Employees are encouraged to experiment, take risks, and push the envelope,” she says. “We believe the only way to do this successfully is to do it in a safe environment where people know that it’s okay to take risks and at times fail.”

Sandy Buik, a volunteer advisor at MaRs Discovery District with a specialty in talent, agrees that creating a safe work environment is essential for making innovation part of a company’s DNA.

“My advice to startups is to create an environment where people care and their brains open up to new ideas [on a regular basis]. The second you separate innovation, it won’t work. Truly innovative companies view it as just the way they work,” she says.

Setting Up Processes

Verbally encouraging creativity and experimentation isn’t enough to truly foster an innovative workplace. Khan says companies needs to have processes in place that account for innovation.

“If you haven’t created the process to manage the innovation funnel, you will get ideas and people waiting for a response and then they will lose interest,” he says.

Khan also recommends companies establish parameters around innovation, and make them clear to their employees. He says that innovation “isn’t always two guys being creative in a garage. Some people want structure so they can know what they can do, and how it can help the organization.” This could include letting employees know if they can make suggestions to innovate outside of the scope of their job.

Rewarding Employees

Rewards for innovation can come in the forms of promotions, role expansions and having access to more company resources. It’s also become standard to financially compensate for innovative ideas. While a plaque and a bonus might work as incentives for employees in large companies, that may not be the case for those working at a startup.

“People who are in a startup are there because of the excitement of being part of the community,” says Jeffrey Dale, President of SnowyCloud. “What has the most impact in a startup is recognition. [Employees] want recognition in front of their peer groups.”

Shopify combines peer recognition and traditional rewards in a unique twist. Employees use a portal called Unicorn, which has been designed like a game with avatars and points.

“Anyone can give another employee a Unicorn for anything they want, and the rest of the company can vote on these Unicorns,” says Forsynth.

The outcome of this system includes compensation, as employees receive bonuses in accordance with the kudos they’re getting on Unicorn. In a company of more than 500 people, this system is working, but it may not be feasible for startups.

DreamQii, a robotics company in Toronto, uses peer recognition as the biggest reward. Co-founder Nikolas Trutiak says the company can’t offer perks like free vacations to their small team of employees and contractors.

“If [employees] do something really well, everyone will recognize it,” he says. “You’ll get pats on the back from your team and that’s huge – it’s like scoring a goal.”

Photo Copyright: Roobcio

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