The Effects of Incentivizing Crazy Ideas on Group Creativity

Abstract:

Practitioners sometimes advocate incentivizing employee groups to propose ideas that deviate from existing norms (hereafter, “crazy ideas”) as a way to foster creativity. However, the effectiveness of these incentives remains unclear. We theorize that such incentives create a tradeoff. On the one hand, they expand the pool of crazy ideas, providing raw material that can be recombined or refined into highly creative ideas. On the other hand, the norm-breaking nature of these ideas can disrupt group cohesion, potentially undermining group creativity. We find support for this tradeoff across two incentivized experiments. A third scenario-based experiment demonstrates that the cohesion cost is mitigated when groups establish norms that support crazy ideas. Together, these findings highlight the competing effects of incentivizing crazy ideas on group creativity and suggest that their effectiveness depends on the social dynamics within groups.

Keywords: Incentives for Crazy Ideas; Unconventional Thinking; Group Norms; Group Cohesion; Creativity