The Nobel Prize for economics in 2016 goes to two men whose research applies directly to innovative leadership. The key points each identified is that for a team or organization to function effectively individual self-interest much be kept under control….i.e. managed!
Oliver Hart adroitly proved how good managers offer ownership stakes to those laboring for their firm. As any good leader has learned….Those who are invested in and rewarded by your company with the profits take care of the equipment and treat customers well!
Bengt Holmstrom takes this logic to its important and essential conclusion. Money is NOT the only profit for an organization. In fact monetary compensation is not even an incentive for workers. Nor is compensation based on the corporate profits effective at improving results in individuals. You MUST tailor rewards to the needs and expectations of the individual. It is more work initially but the pay off is extraordinary!