Planning an Innovation Contest? Here’s How to Make It a Winner

The America’s Cup sailing competition is the oldest international contest still operating in any sport. The first Cup was a fleet race between the New York Yacht Club’s then-radically built America and 14 yachts of Britain’s Royal Yacht Squadron hosted at the Isle of Wight in 1851. The America won.

The regatta was then hosted in New York City between 1870 and 1920, before moving to Newport, Rhode Island from 1930 to 1983. And it has since moved around to various other global locations, including San Diego, Auckland, Valencia and most recently Barcelona in 2024.

These races represent a long-standing tradition of competition driving technological innovation within a specific field. Including in yacht design, materials and sailing techniques.

But sailing isn’t the only realm that’s seen breakthrough ideas come out of contests through the years. With Facebook’s famous annual hackathons, which have been cited as one of the company’s most important innovation drivers, serving as one of the more visible recent examples. Even leading to new features on the platform like chat and calendars.

And perhaps with good reason.

Indeed, innovation contests offer an effective way to get employees interested in sharing their creative ideas, according to Jasmijn Bol, Lisa LaViers, and Jason Sandvik. Who published an article called “The Trouble With Your Innovation Contests,” in the MIT Sloan Management Review in January 2024.

But from the start, leaders must carefully decide the organization’s ultimate goals so that they can then tailor the design of the contest to achieve those objectives, Bol, LaViers and Sandvik say.

At the time of the article’s publication, Bol was the Francis Martin Chair in Business and the PricewaterhouseCoopers Professor at Tulane University’s A.B. Freeman School of Business. LaViers was an assistant professor at the A.B. Freeman School of Business. And Sandvik was an assistant professor at the University of Arizona’s Eller College of Management.

In innovation contests, the best submissions are rewarded with a prize. And the possibility of winning motivates employees to share their brainstorms with organizational leaders, according to Bol, LaViers and Sandvik. That’s important so that valuable ideas don’t stall out with middle management.

Innovation contests also come with a clear set of rules and instructions that inform employees about what types of ideas the organization is seeking, according to the researchers. These motivating and directing elements have made contests popular methods for collecting ideas for hundreds of years.

Napoleon, for example, held contests that yielded important advances in military readiness. Including canned goods and margarine, which made food easier to transport.

Although contests are not a new idea, there are still many unknowns regarding the best ways to structure contests, according to Bol, LaViers and Sandvik. But the trio do offer a few guidelines based on their research.

First, if you want to make sure you are eliciting ideas from all of your employees—or that all voices are heard—you will want to design a contest with multiple, smaller prizes.

Offering several smaller prizes can increase participation among specific groups employees, the researchers say. Including those who are demographically underrepresented in creative endeavors. This is in part due to differences in a person’s confidence that their creativity will be recognized by others.

If you are interested in getting a lot of ideas that will lead to continual process improvements, on the other hand, you will want to use managers as judges, according to Bol, LaViers and Sandvik.

That’s because when managers are judging, participants submit more useful ideas. In part because participants estimate that managers will likely care relatively more about the practicality of the ideas, since an organization’s managers will bear the implementation costs.

Finally, if you are interested in eliciting one extremely good idea, then it is important to offer a single, large prize and have the judges be the peers of the contest participants, Bol, LaViers and Sandvik say. As this is the contest structure with the best chance to elicit extra effort in idea development and a push for out-of-the-box thinking, according to the researchers.

There are a couple different reasons for this. The winner-takes-all structure of a contest with a single larger prize tends to motivate people to spend more time on their submissions than multiple smaller ones, Bol, LaViers and Sandvik say.

And individuals submit more ideas to innovation contests when the judges are their peers—people with their same job role, whose tastes regarding creativity are easier to estimate. Especially compared to when the judges are their managers, whose tastes can be harder to predict.

Organizations don’t need to limit themselves to one contest to tap into employee creativity, Bol, LaViers and Sandvik say. Instead, leaders can run different contests, with different designs, depending on organizational priorities at the time.

The key is to first think carefully about what’s important to your organization, and then design your contests accordingly.

So go ahead and start hoisting that ideation mainsail, why don’t you?