Pursuing innovation and motivating engineers
A few years ago, I was asked to review a chapter for an upcoming business textbook on innovation management. I thought it odd that, in general, we don’t know much about innovation (where does it come from? how to do it well? how to do it regularly?), and yet here we are writing books on how to manage it. So in a fit of hubris I replied that I would rather write a chapter than review a chapter.
And then the editor called my bluff.
So I wrote the chapter, and the book just came out. The chapter, “Reward: How to foster a technology-innovation culture within a large organization (What you can learn from startup companies)” can be found in Bidgoli’s Handbook of Technology Management: Core Concepts, Financial Tools and Techniques, Operations and Innovation Management (vol. 1 of the set). The article’s storyline:
- Companies say that they desire top performance from their executives, and so they tend to pay their executives well.
- Companies say that they want to be innovative, and yet they tend to pay their innovators (engineers) less than just about everyone else in the company.
- Um, hello?
That’s pretty much the gist of it. You can argue about pay scales and so forth, but the truth is that engineers get the short end of the stick. Here’s why smart kids choose the medical profession over engineering:
Median Salary: Electrical Engineer
Median Salary: Anesthesiologist
Note: electrical engineers are among the highest-paid engineers out there (software engineers are a bit lower according to payscale.com). So this is a really depressing realization. I mentioned this in a post a while back, in opposition to Bill Gate’s assertions that money has nothing to do with why people opt out of STEM careers (science, technology, engineering, math). I mean, come on.
I came face-to-face with this again over the weekend, when my neighbor asked me what her high-school-aged son should do for a living (he seems to “get” computers). I mentioned software design and web design, but she described a conversation she had with her company’s computer analyst, who had laughed at her and said “programmers don’t make any money; the analysts do.” Which is, of course right … I remember during my stint in industry the admins were always paid better than the developers, though they had a much harder time of it (you have to pay someone a lot of money if they’re on call to keep a system up 24x7). So my neighbor is adamant against the idea of her son going into engineering if this analyst guy, who hadn’t gone to college, was making more money than her son would ever make if he became an engineer.
But wait, there’s more
Recently one of my grad students pointed me at the brilliant TED talk by Dan Pink. What he says is that, when your job depends upon creativity and thinking outside the box (i.e., engineering at its best), then attaching bonuses to performance is actually a hindrance—it makes you do your job worse by narrowing your focus (making you look more inside the box than out, I guess).
So the immediate conclusion is thank goodness we’re underpaying our engineers, because otherwise they would never be able to innovate.
Which, of course, I think is a gross misinterpretation of what Pink is saying. He says that financial incentives are a bad idea, not high salaries. In fact, I think that having a bunch of engineers running around worried that they aren’t making enough money (and maybe should have become anesthesiologists instead) probably has the same net effect as giving them financial incentives. So, no wonder we have such an innovation shortfall.
I think the right answer is the following: if you want innovation, overpay your engineers. Give them a stable environment, the right tools, and plenty of cash … and innovation will most assuredly come. Xerox PARC comes to mind, one of the last times anybody tried that recipe.
