Last week, Google announced that it would do away with its "20% time" policy, a passion project nurturer that enabled employees to develop innovations like Gmail and AdSense during the workweek.
Google may have decided it needed that 20% back from its employees, but other companies that adopted similar policies are finding that they still work for them. LinkedIn has InCubator, a program that gives engineers time away from their regular work to work on their own product ideas; Apple has Blue Sky, which allows some workers to spend a few weeks on pet projects; and Microsoft created The Garage, a space for employees to build their own products using Microsoft resources.
Some programs (like Google’s) were about soliciting new ideas for the company; others (like Microsoft’s) were simply about letting employees roam free. Either way, they grew out of an era when engineers were in high demand, and it was simpler to start a tech company with a small amount of easy-to-acquire seed capital. The logic went that it was better to have a talented engineer, even if you had only 80% of their attention.
This sort of thinking is no longer only about technology companies. MTV recently surveyed Millennials on their work habits, and found that 78% believe it’s important to have a side project that could become a different career. And companies of all types, from investment banks to ad firms, are now known to be explicitly tolerant of side-entrepreneurship.
Now these companies are seeing what that openness sows: Many startups’ origin stories involve founders who launched their company while working elsewhere, then quit to pursue their passion full-time. In part that’s because "trying to amass slivers of slack time into something meaningful is hard to do," says Chris Trimble, professor at Tuck School of Business at Dartmouth College. The policies gave employees a taste of freedom, as well as the frustration of not being able to fully embrace it.
Some companies may decide, as Google did, that letting employees explore side projects can be too much of a distraction. "There’s the potential you may lose some of your employee’s focus because of the entrepreneurial venture, and for the ones that really take off, there’s the potential to lose the employee," says Bruce Tulgan, founder of the management training firm RainmakerThinking. But some companies are finding that they can harness all that creativity without losing their people—or their people's good ideas.
"Once employees do come up with something, there needs to be a place in the company to take any next steps. That’s where we are today with corporate innovation," says Indiana University business professor Donald F. Kuratko.
How can a company profit off an employee whose ambitions are elsewhere? These three companies represent three potential models:
At the ad agency Huge, workers pitch startup ideas before a panel of judges; winners receive funding and office space, and the firm retains an ownership stake. "It’s also a way to test ideas that could be good for clients," says Huge CEO Aaron Shapiro. The first to launch is a book promotion company called Togather.
Employees of product design firm Adaptive Path are given contractual ownership over any idea they come up with on their job. "We want to have incentives to bring maximum create energy to bear on solving problems for clients," says Jesse James Garrett, the company’s chief creative officer. "People are naturally more creative if they’re not compartmentalizing their lives."
Design firm Ideo regularly puts out calls for "white space projects"—tasks as varied as event planning or data visualization, which employees from any department can join in on. "They’re meant to get people involved in what they’re passionate about, not necessary their core competency," says Ideo partner Duane Bray. "If they have a hobby on the side, it’s a way to bring that skill to work."
[Ed. Note: Due to an editing error, a previous version of this story identified Chris Trimble as a professor at Dartmouth University. The current version reflects the proper name of the institution.]
[Image: Flickr user Hannah G]