Practical steps to incentivise and fuel innovation in your business

We all see innovation as the Holy Grail for driving a business forward: but what real world steps can be take to ensure this happens?

Ideas and innovation turbo charge business growth. More than 70 percent of senior executives believe innovation will be at least one of the top three drivers of growth for their companies in the next three to five years *(1).

Senior executives almost unanimously —94 percent— say that people and corporate culture are the most important drivers of innovation. Organisations are constantly on the lookout for more creative ways to improve workforce productivity and customer service while offering new and better products and services. But how do you create a workforce that can come up with innovative solutions to improve organisational performance?

Many SMEs are failing to foster a culture of innovation and neglecting to encourage staff to think out of the box. A survey *(2) conducted across 52 different organisations indicates that 42 percent of staff did not know whom to contact within their organisation if they had an idea or suggestion on how to improve the business, while 8 out of 10 employees were not rewarded for good ideas.

Too often employees run ideas past managers who may not have the authority to progress the idea – and good ideas quickly wither on the vine.

Formalise idea generation

Businesses that are not seeing the benefits of many of their employees’ good ideas would do well to formalise a system for submitting ideas. This doesn’t need to be a complex or costly process but it should enable businesses to demonstrate that they are acting on staff ideas and rewarding individuals whose ideas lead to improvements.

>See also: Driving growth through employee engagement

As a result entrepreneurial businesses will benefit both from innovation driving the business and a more motivated and engaged workforce, with employees who feel listened to and valued.

Ideas, no matter how small, can make a big difference and it is important that staff know that all ideas are welcome and innovation is not just limited to the product development team. An idea for streamlining the invoicing process, for example, could lead to big savings of time and money that translate to the bottom line.

An online portal can provide a transparent mechanism for sharing employee ideas that breaks down barriers and takes away the fear that some staff may have of walking into a director’s office to suggest an idea.

At the same time a portal helps meet the expectation of younger millennial staff of having the ear of senior management and being able to make a real contribution to the business from day one. Once a month senior management can review every idea submitted so all staff know their voices will be heard.

It is important to provide feedback on any ideas submitted – where have ideas been sent, what is the progress on considering new ideas, if the idea has been accepted, what happens next and if the idea has been rejected, why? If this feedback is not provided it is unlikely staff will use the system a second time.

Rewarding good ideas

Every idea submitted should receive some recognition; whether the idea is implemented or not, with rewards tailored to the employees who are providing the best ideas that go on to benefit the business.

Rewards do not need to be high value – a gift card or experience days are all memorable and cost effective rewards. The key is to reward people publicly for good ideas. Of course many ideas will save the business time and money and will provide good return on investment on any resource spent on implementing them.

There are a few simple steps organisations can take to encourage a culture of idea generation and these include:

  1. Set up a formal process for submitting and evaluating ideas and make sure every employee knows how it works. Use technology to automate, record and report on the process.
  2. Make it easy for staff to register their suggestions either through an online recognition portal, company intranet or email. Allow staff to submit as many ideas as they wish.
  3. Acknowledge receipt of ideas and keep staff up to date about whether their idea is being implemented and if not, why not.
  4. Allow peers to recognise each other’s good ideas and innovations as well as managers recognising staff. This should be part of a shift in culture from reward to recognition.
  5. Build regular tactical communications into annual communication plans to prompt people to go to an ideas portal.

Creative companies tend to succeed – Google is widely reported to encourage employees to spend 20% of their time working on anything they think will most benefit Google, empowering employees ‘to be more creative and innovative’, according to founders Larry Page and Sergey Brin.

>Related: SME identity crisis increases exposure to global risks

Most entrepreneurial businesses do not have the resources to emulate Google’s commitment to creativity but many can justify setting up a portal to provide a structured means of growing the business through innovation.

In most instances the ideas generated will save time or costs or generate increased income from better products or services. Commonly it is difficult to measure ROI from staff engagement and retention initiatives but investment in an ideas portal has a concrete, measurable return on sales totals or cost savings, while at the same time improving both staff retention and engagement.

About author

John Sylvester is Director at P&MM, an award winning performance improvement company specialising in employee recognition, incentives, benefits and customer promotions. Head of the Education Committee at the Institute of Promotional Marketing, John has over 30 years’ experience delivering employee and customer rewards. For further information please visit or follow John on Twitter – @johnsylvester


1 McKinsey Insights

2 The Voucher Shop Staff Suggestion Survey 2015 was completed by 1,387 respondents employed by 52 organisations based in the UK, across a wide variety of industry sectors.

Praseeda Nair

Praseeda Nair

Praseeda was Editor for from 2016 to 2018.