Google deeply believes in innovation and in handsomely rewarding people for amazing innovations. So, in 2004 it created a special Founders' Award. Since innovation is a team sport, the Founders' Award was given to teams who did something that created tremendous value for the company. And Google put real money on the line: The award could be up several million dollars. It all made sense, now it was just a matter of implementation.
One of the first challenges was deciding, each year, which projects deserved the award. That's a judgment call, the type of call management can legitimately make. However, it revealed three challenges.
1. There were large parts of the company where the work, crucial though it was, could never produce a result eligible for the award. There were even cases where people, having worked on a team that won the award, wanted to shift to a different project since they knew the same project couldn't win twice.
2. Another challenge was deciding who counted as being a member of a winning team. On any multi-year project team members will change over time. Does someone who worked for a year on the project count as a member? What about someone who worked three months? That ambiguity generated dissatisfaction.
3. Although the award could be up to several million dollars, often an individual team member would get much less, even as a little as $5,000 dollars. Having someone hand you several thousand dollars shouldn't be a bad thing, but it can be perceived that way by employees expecting much more.
In the end, Google came to realize that that the incentive was making a lot of people unhappy. Good intentions were there all along and you can imagine a CEO digging in their heels and insisting that the Founders' Award symbolized a core value of the organization and hence must be continued. But Google calmly accepted the facts and phased out the incentive.
The value in making good business decisions
I set up the story as being one about an idea followed by implementation. It would be easy to argue that the idea was good and it just wasn't implemented well. If Google was deeply wedded to the belief that the idea itself was good, then they would have mucked around endlessly with the details of how it was awarded.
We all know about Google's success as a company - companies don't reach that level of success hanging onto ideas that don't produce good results for its people or its business.
It took courage simply to phase out the incentive rather than blame ‘poor implementation'. That courage is admirable.
The takeaway is not to let good intent be a substitute for good outcomes. If the data shows something isn't working, then it needs to be changed or dropped no matter how noble the intent.
PS: To learn more about Google's innovative people practices, check out the book 'Work Rules!' by its SVP of People Operations, Laszlo Bock.