Monday, June 6, 2011

BURROUGHS James E., DAHL Darren W., MOREAU C. Page, CHATTOPADHYAY Amitava, GORN Gerald J.
INSEAD Working paper 2011/71/MKT

In an effort to improve creativity in the new product development process, many firms offer incentive programs, creativity training programs, or both. Yet creativity continues to be a construct that is not well understood in marketing, and little research has examined the joint influence of such initiatives on creative outcomes. As a result there is considerable variance in the way firms approach these issues. In a qualitative study of twenty firms, it was found that fifteen offered some type of incentive program while only seven engaged in creativity training (a subset used both). Given that prior research has consistently found that extrinsic rewards offered in isolation actually undermine the creative process (by reducing intrinsic motivation) it appears many firms may be unwittingly hampering their own creative efforts. However, two experiments demonstrated that the effect of rewards can be made positive if offered in conjunction with appropriate training. Specifically, product creativity was highest when the monetary reward was paired with a dedicated creative training technique. The training alters the influence of the reward such that it reinforces (rather than undermines)intrinsic motivation. Managers can improve the effectiveness of their creative efforts by leveraging the use of incentives and training in combination.