Idea Generation, Creativity, and Incentives

Abstract

Idea generation (ideation) is critical to the design and marketing of new products, to marketing strategy, and to the creation of effective advertising copy. However, there has been relatively little formal research on the underlying incentives with which to encourage participants to focus their energies on relevant and novel ideas. Several problems have been identified with traditional ideation methods. For example, participants often free ride on other participants' efforts because rewards are typically based on the group-level output of ideation sessions. This paper examines whether carefully tailored ideation incentives can improve creative output. I begin by studying the influence of incentives on idea generation using a formal model of the ideation process. This model illustrates the effect of rewarding participants for their impact on the group and identifies a parameter that mediates this effect. I then develop a practical, web-based asynchronous “ideation game,” which allows the implementation and test of various incentive schemes. Using this system, I run two experiments that demonstrate that incentives do have the capability to improve idea generation, confirm the predictions from the theoretical analysis, and provide additional insight on the mechanisms of ideation.idea generation, new product research, product development, marketing research, agency theory, experimental economics, game theory

Improving Open Innovation: Challenges for Managing Communication and Creative Ideation

“…There is a significant lack of theory and theoretical perspectives from which the 'user-innovation literature' draws, especially in the management literature (Bogers et al, 2010): proposed explanations such as expected benefits, information stickiness, intrinsic benefits, career concerns or user's knowledge and expertise fail to add up to a coherent theoretical explanation. Some anecdotal research results concentrate on internal, subjective motivators (Daniels et al, 2011;Jung, Lee, & Karsten, 2011;Obschonka, Silbereisen, & Schmitt-Rodermund, 2012), while others may point to external, financial factors (Toubia, 2006); some research even suggest that creative thinking can and should be taught, and reinforced through positive feedback channels, rather than just motivated (Daley, 2005).…”

The role of employee participation in generating and commercialising innovations: insights from Chinese high-tech firms

“…In this line, research suggests incentives to be conducive to greater effort and participation in idea generation, such as number of proposed ideas, frequency of participation, and response to other members (Toubia, 2006), thus having indirect effects on innovation through participation and EDI. In this sense, the success of EDI depends on the existence of underlying incentives such as bonuses, performance pay, promotion, training and development, job security programmes, or communication in enhancing organisational performance and innovation effort (Strauss, 2006;Tausky and Chelte, 1988).…”

Deadlines in Product Development

“…Previous research has investigated how firms' new product strategies interact with, for example, buyer self-selection (Moorthy 1984), product obsolescence (Levinthal and Purohit 1989), R&D and Engineering metrics (Hauser 1998), distribution channel relationship (Villas-Boas 1998), demand uncertainty (Desai 2000), dynamic competition (Ofek and Sarvary 2003), network effects (Sun, Xie, and Cao 2004), firm alliances (Amaldoss and Rapoport 2005), idea generation (Toubia 2006), channel acceptance (Luo, Kannan, and Ratchford 2007), subjective characteristics (Luo, Kannan, and Ratchford 2008), sequential entry (Ofek and Turut 2008), reference group effects (Amaldoss and Jain 2010), innovation incentives (Manso 2011), and consumer deliberation (Guo and Zhang 2012). The incentive design aspect of this paper is also related to the literature on sales force compensation (e.g., Basu et al 1985;Lal and Staelin 1986;Rao 1990;Coughlan and Narasimhan 1992;Raju and Srinivasan 1996;Kalra, Shi, and Srinivasan 2003;Lim, Ahearne, and Ham 2009;Simester and Zhang 2014).…”