You’re Getting a Bonus! So Why Aren’t You Motivated?

An interesting article from HBR You’re Getting a Bonus! So Why Aren’t You Motivated? lays out two factors that reduce effectiveness of bonuses as a motivator in R&D teams. R&D managers must keep both in mind while determining the best way to motivate teams into improving performance – especially when teams are virtual.

1.The connection between values and behavior. Typically, bonuses are tied to financial achievement —they’re paid out when a certain benchmark is hit such as yearly company revenue, earnings per share, or department revenue targets. But the connection between the outcomes you truly value and the behaviors you want to see from employees can be far from obvious.

This is very true in large R&D organizations. I have worked with many companies were even large bonuses did not encourage right behavior because there was no direct link between individual performance and bonuses. Several companies attempted to address this using a flow down of corporate performance requirements into individual goals. However, this is extremely difficult to do – how does one link a success of a research project that may enable a new subsystem which in turn might have an impact on several future products to bonuses? Even when the bonuses were tied to behaviors, the second problem prevented good outcome:

2.The connection between a worker and his/her direct supervisor. Plenty of research has shown that the most important influencer of workers’ performance, for better or worse, is the dynamic between them and their bosses. For example, research into workplace deviance by Lance Ferris of Singapore Management University shows a higher level of outright deviance among employees who feel they’ve been treated rudely or unfairly by their immediate supervisors. By the same token, there is nothing more motivating than recognition that comes directly from the higher-up who knows your work best: your manager. At that close range, a reward is a relationship-builder. Administered more remotely, as bonuses are, it’s only a transaction.

I would add to this factor: In several companies, the bonuses were decided at the division level and the supervisors were just handed a “decision” to communicate. This made it quite difficult for the supervisor to even explain rewards, much less guide behavior! May be it is time to consider other approaches to motivate teams?

Spurring Cross-Functional Integration

Journal of Product Innovation Management has an interesting article on Spurring Cross-Functional Integration for Higher New Product Performance: A Group Effectiveness Perspective. The article recognizes, that cross functional integration is crucial, but difficult to do:

Firms are increasingly assembling cross-functional new product development (NPD) teams for this purpose. However, integration of team members’ divergent orientations and expertise is notoriously difficult to achieve. Individuals from distinct functions such as design, marketing, manufacturing, and research and development (R&D) are often assigned to NPD teams but have contrasting backgrounds, priorities, and thought worlds. If not well managed, this diversity can yield unproductive conflict and chaos rather than successful new products.

The paper lays of the result of a formal study based on group theory that scientifically validates that cross-functional integration does have a positive effect on R&D effectiveness:

The model developed from this theory was then tested by conducting a survey of dual informants in 206 NPD teams in an array of U.S. high-technology companies. In answer to the first research question, the findings show that cross-functional integration indeed contributes to new product performance as long conjectured. This finding is important in that it highlights that bringing together the skills, efforts, and knowledge of differing functions in an NPD team has a clear and coveted payoff: high-performing new products.

The study finds that two types of factors impact cross-functional integration:

Specifically, social cohesion and superordinate identity as internal team factors and market-oriented reward system, planning process formalization, and managerial encouragement to take risks as external team factors foster integration.

Authors recommend that BOTH factors need to be addressed effectively to integrate teams:

These findings underscore that spurring integration requires addressing the conditions inside as well as outside NPD teams. These specialized work groups operate as organizations within organizations; recognition of this in situ arrangement is the first step toward better managing and ensuring rewards from team integration.

Clearly, internal factors are much more difficult to address in diverse teams that are dispersed across multiple locations. In fact, it is very difficult to get virtual teams to believe that they are a single organization. That is where R&D managers can help!

How To Keep Your Team Loose

As we have seen in several recent posts, R&D managers have to be increasingly effective about managing complexity, especially when the teams are scattered across geographies and organizations (e.g. co-design). Managers have to make sure that these virtual teams remain effective and focused. HBR has some hints on How To Keep Your Team Loose and performing:

Instill camaraderie. Optimal team performance depends on people pulling together for one another. Camaraderie-building can happen naturally between teammates, but managers can encourage it by creating groups or units of people whose talents complement each other. Injecting some humor into the mix through jokes and gentle teasing can speed the meshing of individuals. Camaraderie builds when people can laugh with each other, not always at each other. (That is, you can tease, but make certain you are available to be teased yourself.)

Get personal. Know your people and their capabilities. The secret to maintaining a loose atmosphere is belief in individuals’ and the team’s ability to perform. Trust that people know their stuff and will execute. Being light and loose with underperformers is not advised. You need to get people in gear before you can ease up with levity.

Coach ’em up. The art of management is putting the right people in the right places so they can succeed. Toward that end, good managers spend their time coaching their people for performance. If a manager has established good rapport with individuals through his light-hearted demeanor, he has a better ability to connect and get them to listen. (Note: too much joking will undercut a manager’s ability to be perceived as serious.)

A good reminder to any R&D managers trying to engender innovation…

Get Your Team to Stop Fighting and Start Working

Here is a quick little best practice reminder from HBR for the weekend: Get Your Team to Stop Fighting and Start Working. Skepticism and questioning are part of the R&D environment. However, they could lead to conflict – especially in virtual teams. Managers would do well to follow this advice from HBR:

Intervene early. When two or more team members are engaged in a conflict, the sooner you step in the better. Once the dispute starts, emotions can run high, making it harder to diffuse the situation. Letting conflicts fester can result in hurt feelings and lasting resentment. Boyatzis points out that a simple disagreement can turn into a serious conflict in milliseconds, so it’s critical for team managers to be aware of the team dynamics and sense when a disagreement is percolating.

Playing Well With Others

MIT Sloan Management Review had an interesting article Playing Well With Others about communication between R&D and marketing:

The Situation: Different priorities and ways of thinking often create gaps in understanding between marketing and research-and-development staff.

The Problem: Such gaps often mean that one side dominates the development of new products, giving short shrift to the other. When marketing dominates, R&D can be under too much pressure to hit on breakthrough ideas. When R&D dominates, new products can lack marketable strengths.

Effective communication is very important in R&D environment. In fact, some amount of questioning and skepticism is absolutely essential to scientific / engineering progress and to innovation. However, when two different departments like marketing and R&D are involved, effective communication becomes more difficult and essential. The article suggests:

The Solution: Companies should help both sides learn to appreciate each other’s strengths, and encourage them to work closely together at the earliest stages of product development.

I believe that R&D managers need to put in place a communication bridge that transcends jargons (both engineering and marketing) to allow a free flow of communication. The bridge could be individual dependent (like in FreeScale) or in terms of an effective process and tool-set that allows everyone to focus on what is of common interest (product specs and customer requirements) while bypassing what is not (details of engineering implementation or product surveys). The article points out the same:

Make sure everybody recognizes the value that each department brings to the process—and how one side complements the other.
If one department or the other is dominating a company’s process for developing new products, bring the two more into balance.
Have the two sides speak a common language.
Get out of your silos—up to a point.
Focus on the consumer.

Don’t have access to customers? Hire stand-ins!

I guess hints about R&D strategy are everywhere one looks. The article How Moore’s Law drove Intel into the arms of anthropologists talks about how Intel developed and evolved an innovative approach to identifying and understanding customer trends to help drive R&D (for those who do not know SoC, it means System On a Chip):

Now, the SoC business has fragmented into three main parts: 1) OEM customers, who design consumer products and put in orders for SoCs with specific kinds of capabilities, 2) fabless semiconductor shops, which work with a range of OEMs to make SoCs that fit certain market niches, and 3) the foundries, which manufacture the SoCs that are dreamed up by the first two parties.
Because Intel isn’t an OEM customer, a fabless shop, or a foundry, it ends up having to be all three at once if it wants to play the SoC game. That’s one place where the ethnographers come in.
The ethnographers essentially stand in for OEM devicemakers, in that they provide Intel with market-oriented input into the kinds of products that the company should be designing SoCs for. In other words, the user experience researchers can function as substitute “customers,” so that Intel can iterate its products internally in conversation with a kind of “market.”

I have heard of many companies hiring their customers to drive R&D. It is very common in Aerospace world to hire retiring astronauts or generals. However, what Intel has done is one step farther removed. They have hired ethnographers, sociologists and psychologists to go a step beyond their customers. These are people that their customers would hire to help them plan their products.

This might be helpful for Intel in more ways than one. First, it helps Intel become more successful by providing reference designs that its customers can use – there by leveling playing fields and driving down costs. More importantly, it helps diminish the impact of asynchronous development cycles. It normally takes much longer to design, develop and produce a processor than a system that uses that processor. By getting insights into what will drive its customer’s behavior down the road, Intel can effectively do codesign with less complex R&D management. On the flip side, Intel than has to absorb the cost of hiring a skill-set completely outside its normal business and find ways to manage and motivate them…

Selfish Profit Incentives To Win Military Challenge In A Single Day

Here is a quick article from The Guardian on how MIT Uses Selfish Profit Incentives To Win Military Challenge In A Single Day:

The Guardian: The Darpa Network Challenge, which took place on Saturday, offered a cash prize for the first group to successfully locate 10 large red weather balloons hidden at a string of secret locations across the US. Competitors were asked to use the internet and social networking sites to discover the whereabouts of the balloons, in what Darpa – the Pentagon’s Defense Advanced Research Projects Agency – said was an experiment to discover how the internet could help with rapid problem solving.

Effectively MIT used a pyramid scheme to drive behavior and get the desired result. This may not be a bad thing necessarily. In fact, Borderless Innovation talked about a Creative Bazar for innovation and the Indian conglomerate Tatas use karma points in somewhat similar fashion to identify and reward innovation.

May be this could be the answer to right Innovation Incentives?

The Secret Reason Your Employees Won’t Innovate

HBR lays out The Secret Reason Your Employees Won’t Innovate:

After surveying hundreds of employees ranging from managers to stock clerks, Feirong Yuan of the University of Kansas and Richard W. Woodman of Texas A&M found that worries about “image risks” (unfavorable social impressions) significantly diminish workers’ innovativeness. People whose roles don’t explicitly call for innovation believe that coworkers will think negatively of them if they try to come up with better ways of doing things. In some cases, they’re even afraid they’ll “provoke anger among others who are comfortable with the status quo,” Yuan says.

We have discussed some of the reasons why R&D team members are reluctant to put forward new ideas: Risk averseness and misaligned incentives. Clearly something R&D managers should be consciously changing:

But leaders can have a big impact on this problem, the researchers report in the Academy of Management Journal. Perceived organizational support for innovation significantly reduces workers’ view of the social riskiness. The key is to create a sense of psychological safety: Provide an environment in which differences are tolerated and people feel free to approach problems in new ways.

How to Manage Virtual Teams

MIT Sloan Review had an interesting article on How to Manage Virtual Teams. As we have discussed in the past, the need for effectively managing cross-cultural cross-organizational virtual teams will only increase with time.

The article measures virtuality in terms of “dispersion” of teams and finds that even small distances (different floors of the same building) have a significant impact on team cohesion. R&D managers probably need to understand that processes and tools needed for managing virtual teams may actually benefit teams that are traditionally considered collocated.

The article is a very good read. However, here are the key findings:

* The overall effect of dispersion (people working at different sites) is not necessarily detrimental but rather depends on a team’s task-related processes, including those that help coordinate work and ensure that each member is contributing fully.

* Even small levels of dispersion can substantially affect team performance.

* When assembling a virtual team, managers should carefully consider the social skills and self-sufficiency of the potential members.

I guess the main takeaway is very encouraging – virtual teams can be as effective (or probably even more effective) than collocated teams as long as tools exist to provide effective communication. The key challenge is for R&D managers is to avoid communication through large documents: they are filled with discipline-specific jargon and no one has time to either develop thorough documentation or to read someone else’s large document. More importantly, documents fail to capture rationale followed by one team member to reach decisions that impact other team members. Interesting challenge… DPSTBNMT3VHA

Questioning and Skepticism in R&D

The New Scientist had an article about questioning culture in organizations Living in denial: When a sceptic isn’t a sceptic: “

A climate denier has a position staked out in advance, and sorts through the data employing ‘confirmation bias’ – the tendency to look for and find confirmatory evidence for pre-existing beliefs and ignore or dismiss the rest. Scepticism is integral to the scientific process, because most claims turn out to be false. Weeding out the few kernels of wheat from the large pile of chaff requires extensive observation, careful experimentation and cautious inference. Science is scepticism and good scientists are sceptical.

R&D management probably is as close to science as we would get in most commercial ventures. As we saw in a recent post, one needs to encourage questioning and skepticism to drive innovation. However, managers need to strive to keep the entire process constructive and avoid “rote denial.”