I'm at my company's annual kickoff this week. One of the things we do that is always interesting is Science Fair. Everyone has the opportunity to build a project, something they think our software can do that currently isn't in the roadmap. There have been some projects from past years that have made their way into the product. It's a good way to take advantage of people's intrinsic motivation.
I just finished the book Drive, by Daniel Pink. The book focuses on motivation. In the book, the author talks about other companies that do something similar. At Google, people get to spend 20% of their time on projects they want to. Many of these have made it to products. Atlasian software has "FedEx Day" where people are given 24 hours to come up with something, so called because people must deliver overnight (Side note - Atlasian's Jira tool came out as one of the top agile tools in VersionOne's 2009 State of Agile Development survey).
People get intrinsic motivation through autonomy, mastery, and purpose according to Daniel Pink. Autonomy is getting to choose what, when, and with whom they work with. In our science fair, people get to work on teams if they chose. Mastery is getting good at what you do, through such things as "Goldilocks tasks" that are hard enough to challenge but not so hard as to seem impossible. The purpose is why the company exists, something that everyone should relate to.
These intrinsic motivators will drive people and organizations much more effectively than the old carrot and stick approach, which we're all used to...if I hit my utilization target, I get a bonus. The carrot and stick can backfire in a number of ways, including stifling creativity. Things like FedEx Days or Science fair, on the other hand, will bring out creativity in a group of knowledge workers, leading to new products or services. So what's your organization doing to promote creativity?