To be clear, I’m not saying financial incentives lack impact. Indeed, the evidence from economics makes clear: People do respond to incentives (even if they are not the primary source of motivation for the best people). To ignore the influence of incentives is to ignore human nature. And that leads me to a key point: The wrong incentives are not merely benign; they can be outright dangerous. If you’re trying to build a great company guided by a deeply held set of values, you simply cannot afford to have incentives that reinforce behavior incompatible with your core values, or worse, that reinforce the behavior of the wrong people and drive away the right people. Indeed, the wrong incentive system can encourage people to do the wrong things and perhaps even throw a company into crisis.

This returns us again to the central point of this section; the primary challenge you face is not in increasing creativity per se, but in making your company receptive to the vast amounts of creativity that already exist. The point is not to build a company that depends on you for its innovation, but to continually work towards an organization that is as receptive to new ideas as if those ideas had come from you.

These days, I’m wary of seemingly simple incentive rules that promise amazing results. They are rarely simple, and often leave collateral damage. Usually, a better option is to have a frank discussion about what we should value and why. Why should we care about exploring more designs early on? Why should we aim to speed up engineering velocity? Once people understand and buy into those values, they can make the best decisions on how to apply them.

But people are less creative when they don’t know whether or not they’ll get paid extra. Big salaries, not merit bonuses, are good for innovation.

I went to our board’s compensation committee and explained the dilemma. When you innovate, everything needs to change, not just the way you make or deliver a product. Many of the practices and structures within the company need to adapt, too, including, in this case, how the board rewards our executives. I proposed a radical idea— essentially, that I would determine compensation, based on how much they contributed to this new strategy, even though, without easily measured financial results, this was going to be far more subjective than our typical compensation practices.