The issue of pay-for-performance is one that is never far off the corporate compensation radar, however, a strong case for it's value can increasingly be made these days when it is purposefully woven into an organization's innovation strategy. The premise is this: you do more that is measurable for our innovation effort and we'll do more in some measurable form for you - it's a direct correlation.

This is especially  worth considering  at a time when you have senior management compensation mechanisms under heightened scrutiny and  generally perceived as lob-sided, while the time-honored practice of “Slash & Burn” cost reduction is returning for a repeat engagement to those organizations less gifted at hands-on problem solving, contingency planning and self re-invention.

Markets have changed, customers have changed, employees have changed - the world has changed dramatically in a short period. The tired approaches of old will not get most through the current imbroglio and beyond - we are living through a moment in history that is truly transformational, one which can only be met with a single approach in response: transformation of your own.

Now if you are looking to leverage the innovation effort and make it a centerpiece of your corporate, market and financial strategy going forward, you must attract, excite, engage and motivate the various members that make-up your innovation community. The goals must be clear, the engagement relevant and the quid-pro-quo equitable - any recognition and reward structure needs to be fair, certain and immediate. Driving specific results requires specific direction.

Expecting your folks to jump for joy at the sight of additional work without the recognition to go with it is utterly unrealistic - there has to be some up-side in it for them. The more cynical manager may think themselves clever by threatening their people with job loss to stoke innovation performance, but these antediluvian tactics are tantamount to inviting them start on a job search: their emotional and mental commitment to the customers, partners, position. colleagues...the organization as a whole ends the second this implication is made.

Incentive pay can work well for executives and has proven to work just as well for the rank-and-file involved in the various roles of the innovation process. In fact, according to our own benchmarks, when properly structured and executed, these incentive mechanisms increase ROI by a ratio of 6-to-1. The best part about this relationship is that the financial risks are fully mitigated by the condition of measurable innovation results coming before any incentive rewards are ever paid-out.