Here’s how to cultivate a work environment that produces great ideas

In the days before Apple, an engineer pitched the idea for a personal computer five times to his employer, Hewlett Packard. Each time, they rejected his idea. That engineer, Steve Wozniak, went on to found Apple with fellow innovator Steve Jobs.

Wozniak wasn’t the first person to have his brilliant idea rejected, and he certainly won’t be the last. The thing is, companies often lack the right infrastructure or approach to recognize the actual merits of their employees’ ideas.

There are, however, things you can do to create workplaces that reward your employees’ creative efforts. But first: what causes companies to overlook smart innovations in the first place?

Why we sometimes overlook great ideas

For starters, many organizations don’t have a system for employees to submit their proposals. A study by Accenture found that a whopping 72 percent of companies have no formalized process to review and evaluate their employees’ ideas.

Then, there’s the fact that many decision-makers are risk-averse. As Nobel Prize-winning psychologist Daniel Kahneman has written, “For most people, the fear of losing $100 is more intense than the hope of gaining $150.”

In short, losses loom larger than gains. People would rather maintain the status quo than risk betting on a losing horse. When it comes to companies and innovation, there’s an emphasis on demonstrable results and profitability. This means that leaders often don’t green-light unusual ideas, and this kind of culture often stifles innovation.

And in some cases, great ideas are swallowed up by company politics. According to Northwestern professor Brian Uzzi, meaningful innovations will inevitably cause politics to enter the picture, as various players vie for a limited amount of resources, often without being able to demonstrate future returns. Uzzi explains:

“[W]hen early-stage innovations or those that need to be implemented to collect performance data lack hard performance evidence, politics tend to preserve the current state of power and control over physical and social resources.”

As a result, the most innovative ideas lose out.

But as some companies have figured out, that doesn’t have to be the case. If you’re a manager, here’s a guide to ensuring that your company’s next million-dollar idea comes to fruition.

1. Implement a clear system

First, you need to make sure that employees know how to submit their ideas for review.

Micah Johnson of GoFanbase, Inc., shared with Small Business Trends that his company created a Slack channel where employees can submit their ideas. Tomer Bar-Zeev of IronSource said that 24-hour hackathons enable his innovation team to break from their usual projects and work on entirely different, new projects. At my company, JotForm, we hold weekly Demo Days to give employees a forum to explore their ideas, no matter how far-fetched.

Even a system as simple as a suggestion box can be highly effective. Just ask Charlie Ward, the engineer who used Amazon’s digital suggestion box to submit his idea for free shipping, which eventually formed the basis of Amazon Prime. As journalist Brad Stone wrote in his book The Everything Store: Jeff Bezos and the Age of Amazon, CEO Jeff Bezos was reportedly “immediately enchanted by the idea.”

Regardless of which system you implement, make sure it’s known and accessible to all employees.

2. Eliminate the politics

You can also encourage great ideas by making the selection process transparent and more democratic.

Rite-Solutions, a Rhode Island-based IT company, developed a smart way to generate new ideas while eliminating some of the politics of decision-making: an “idea market,” where employees can post an idea, which is then listed as “stock” on the market, Harvard Business Review.

The company gives employees $10,000 in virtual currency, which they can “invest” in their colleagues’ ideas. Those that garner enough support are greenlit, and the respective investors get a share of the profits. I love this system because it encourages employees to collaborate and to support each other’s ideas.

3. Make failures okay

What do Apple’s MobileMe, Amazon’s Fire Phone, and Google Glass have in common? They’re all unsuccessful products introduced by the world’s most successful and innovative companies.

The most forward-thinking companies embrace risk-taking and the possibility of failure. And for every MobileMe, there’s a handful of products or services that did gain traction. Plus, every failure can offer a teachable moment.

Before I launched JotForm, my entrepreneurial track record included more than one failed product. And I mean total busts. For example, I created a membership site for university alumni—at about the same time that a little company called Facebook was taking off. I’m sure you can guess how that story ended. But rather than giving up on starting my own business, I continued to gain experience working for other companies while looking for another problem I could solve and one that no one else was solving.

Now, I’m not saying you should encourage lax work ethic and sloppy skills (which often leads to failure). But letting employees know that failures are okay can go a long way toward fostering their most creative ideas.

Next time you want your employees to come up with a great idea, don’t focus on how it will make a profit; focus on how it will solve a problem. With this approach, I’ve found that employees will rise to the task of coming up with innovative solutions.

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Aytekin Tank is the founder of JotForm, a popular online form builder. Established in 2006, JotForm allows customizable data collection for enhanced lead generation, survey distribution, payment collections, and more.