If you have done any reading about innovation, you have probably heard of hack days, or hackathons. The concept has gained popularity in the last few years, and is now a staple event at many tech companies.

The hack day concept actually started at Yahoo back in 2005, when Chad Dickerson (now CEO of Etsy) was working in the Search division. "One of the things I noticed when I was at Yahoo was a website inside Yahoo called the Idea Factory," explains Dickerson. "The idea behind the Idea Factory was to have a suggestion box for ideas. If you worked at Yahoo and you thought you had the solution to world peace, you could go to the Idea Factory and say, 'If the world just worked this way then this would happen'."

Dickerson noticed that the Idea Factory was never short of ideas. Indeed, everyone in the company had lots of ideas but unfortunately, ideas don’t really mean anything unless they are implemented. When Dickerson started Hack Day at Yahoo, it was with the idea that a team of people could take an idea and, within a compressed period of time, actually build it into something tangible.

Great Ideas Come Out on Hack Day

A critical factor of Dickerson’s hack days was that people were given free rein. "Inside a corporation that’s difficult, because a corporation has its objectives and you’re actually paying people, but I had really great support from the management at Yahoo," says Dickerson. He added:

I came up with the concept through hearing about what was happening with start-ups of five or eight people. I wanted to see if you could do it with 3,000 people."

We basically set a 24-hour period and got management buy-in to allow the engineers to do whatever they wanted for that day. The only rules were: take 24 hours; come up with something; build a prototype; and present it at the end of the day. There were no assigned teams and no assigned work spaces.

The premise of Hack Day was that developers had great ideas and they could execute them. If you didn’t tell them what to do, they would do amazing things. And that’s exactly what happened."

Dickerson’s Search division at Yahoo had 3,000 people, and several hundred participated in the first Hack Day.

I didn’t even ask people to sign up, I just said, “Today’s the day for people to do whatever they want and we’re going to have a sheet for you to sign up to present your demo at the end of the day.” At the end of the day I didn’t know who had built what, as there was really no central authority. We had 70 teams and they each had something to show."

Hack Weeks Tell Employees, "I Trust the Team"

Yahoo ended up running Hack Days in the United States, the UK and Asia. "People just did creative work," Dickerson recalls. "And the theory that I had was actually proven — that if you have smart people and give them room, they’ll do amazing things. It was proven over and over again. The only thing different, really, in the different places was the food the people ate. We had samosas in Bangalore, and we had pizza in California."

When Dickerson moved to Etsy he took the concept of hack days a step further and created Hack Week. During this week, literally the entire company is invited to stop working on "business as usual' and to build prototypes, with the aim of having production-ready code at the end of the week. Instead of receiving Participation 151 a prize for the best prototype, the reward a prize for the best prototype, the reward is actually pushing the changes out to the site.

One of the winning teams from an Etsy Hack Week built a system where users would be able to "favorite" an item that appeared in search results, rather than having to click on the item first. It was a very small idea that had a big impact — after the idea was implemented, "favoring" activity went up by 30 percent.

Reflecting on what hack days and hack weeks do for an organization’s culture, Dickerson says,

Having hack weeks implicitly says, “I trust the team.” It says “I know that when I give you freedom you’re going to do great work.” That’s a really powerful dynamic because, in my mind, companies that don’t do things like that, or say “We could never do that,” are saying they don’t trust their employees. When you have trusted employees and the employees trust you, they do better work, they’re happy, and they do more innovative work."

Excerpted with permission of the publisher Wiley, from The Innovation Formula: The 14 Science-Based Keys for Creating a Culture Where Innovation Thrives by Amantha Imber. Copyright (c) Inventium Pty Ltd ATF Inventium Trust 2016. All rights reserved. This book is available at all booksellers.