Offering big rewards for innovation can produce a flood of ideas – but that isn’t necessarily a good thing. Too many projects can overwhelm the pipeline, leaving you unable to execute and demoralizing employees who keep walking away empty-handed. Try using low-powered incentives (e.g., 10% of an idea’s value) because they produce a healthy number of small ideas, which are easier for a company to act on. Because true breakthrough ideas are so rare, the best approach is to focus on increasing the variety of ideas – and to weave smaller-scale incentives into a culture that encourages experimentation and doesn’t punish failure.
Some companies even reward failures that are informative. Steps like these help employees get over the fear of failure and think beyond the “acceptable” innovations that they think management wants to hear.