The following is an adapted excerpt from my newest book: Un-Kill Creativity: How Corporate America can out-innovate startups.
Corporate creativity starts with employee creativity. Employees are motivated to be creative at three levels: the corporate climate, team dynamics, and individual actions they take. My doctoral study showed that people are creative when they work in startups more than when they work for Corporate America. Here is what happens to employees in mature companies that causes them to lose their creativity, and what you can do to stop that.
1. Lack of Autonomy
Employees don't need the autonomy to decide which project to work on, but they must have the autonomy to choose how to work on it. Micro-managers that direct their employees exactly how to perform their job rob them of their creativity. Ask yourself: how do you react when your employee comes to you and tells you he tried something without your permission, and failed? If you say: "next time ask me first", or "don't ever do that again!" you are guaranteed to kill their creativity. I don't condone praising failure. However, you should recognize that they took initiative and experimented. Ask them what they learned from it. Connect them with someone elsewhere in the company who tried something similar and was successful.
2. Lack of Big Picture Visibility
To be creative, employees like to see how their part of the project fits within the bigger picture of the whole project, and how their success (or failure) would impact the company. The bigger the company is, and the bigger the project is, the more managers tend to break them apart, define clear delineation boundaries, and keep employees playing in their own sandboxes. Exposing employees to the bigger picture gives them the opportunity to share resources and ideas with other parts of the project and understand the impact their part has on overall company success, is a strong creativity motivator.
Research before mine found that challenge motivates creativity. However, in my own research I found the dichotomy of challenges. External challenges, such as technology, market, competitors, and funding motivate creativity. However, internal challenges, such as bureaucracy, strict processes, and strong formalization achieve the opposite. They discourage creativity. Employees feel that they are wasting their time and energy just to fight bureaucracy, and don't see any value from it. Don't impose arbitrary deadlines, as they cause burn-out. Reduce bureaucracy to the minimum. Make sure you can maintain company compliance and accountability, but not at the expense of employee creativity. Processes should be developed and used to help efficiency, effectiveness, productivity, and learning, and not be used as a whip for someone to gain organizational power.
4. Political Correctness in the Team
Arguments start by holding opposite positions. They evolve through a politically-correct discussion that leads nowhere. Further along is the passionate debate, that supports the highest team creativity. However, when emotions get into the argument, it becomes personal and less productive, and eventually leads to negative consequences. Not only that a personal conflict is uncomfortable, but the organization works hard at avoiding it due to the potential liability. As a result, organizations focus more on saying the right things, rather than doing the right things. Employees are encouraged to be politically correct instead of productive or creative. You must build trust within the teams that will allow them to argue passionately, freely, and with no consequences, instead of forcing them to be politically correct.
5. Lack of Recognition
Everyone needs recognition, and sometimes we forget it. Recognition should not be in the form of financial incentives, or promises of promotions. Those, in fact, reduce creativity and increase the likelihood of uncooperative competition. Recognition is most important when it comes from peers, then from the immediate team leader, and only lastly when it comes from the CEO. Especially if he remembers your name... More than all, recognition shows employees that their efforts are encouraged, and that the company values initiative, experimentation, and creativity over compliance. Make sure that message comes across.
6. Not enough Resources
Resources are important. They include funding, people, time, and other tools and materials. There need to be enough resources to do the job. Unrealistic schedules and no access to the minimum level of resources would hurt creativity. On the other hand, you can give too many resources. As one of the participants in my study said: "The more resource-constrained you are--the more creative you end up being, and I think... when you have more resources, you come up with maybe less efficient ideas, or maybe more resource-intensive ideas, whereas when you know you have a lot more finite resources, you typically tend to be more creative." You can lose employee creativity by not giving enough resources, or by giving too much.
The good news is that changing those 6 factors is feasible, and doesn't cost any more. All it requires is a change of attitude in your company.