What if the nature of the employee's job is to be creative and innovative? This requires that an employee be willing to take risks and make mistakes. Should you still manage that employee closely? Should you still tell him what to do and how to do it? Should you still monitor, measure and document? Won't that inhibit the employee's creativity and innovation? Won't that make the employee less likely to take the necessary risks and make the necessary mistakes?
First, don't conflate reinventing the wheel with innovation. The wheel has already been invented. You do nobody any favors by keeping them in the dark about it. Real innovation builds on what has already been invented. Real innovation takes the next step. So if you want to promote innovation, you need to make sure the employee understands the state of the art. Spell out all that has already been invented, so the employee has real stepping-stones from which to launch.
Second, if the employee's job is to be creative, the biggest favor you can do for that employee is be very clear about what is not within the employee's discretion. Spell out all the guidelines and specifications. Make it clear that any creativity must occur within those parameters.
What if you want the employee to be creative in the most freeform way? You don't want to hold the employee back in any way? No guidelines. No parameters. Really? That's a very rare assignment. Like... Jackson Pollock rare.
But maybe you have that very rare assignment. OK. Is there a time limit? Or will you pay the employee to brainstorm ad infinitum? How will you know when the employee is "done"? How will you recognize a finished "result"?
Third, if you want an employee to feel free to take risks and make mistakes, then what you need to do is spell that out as a concrete assignment: "I want you to go take risks and make mistakes." Maybe you need to tell the employee how many risks to take and how many mistakes. Maybe not. But you have to find a way to create a space in which risk taking and mistakes are safe---maybe a padded room. And you have to find a way to create a timeframe. And if you want to be kind, you should find a way to define some parameters.
What some firms do, when creativity and innovation are real business drivers, is they define a percentage of time and set it aside for creativity. Let's say 20%. They tell people, "We want you to use 20% of your time on projects that are not your official tasks and responsibilities... Use that time to pursue your own creative projects." That kind of allowance usually comes with a caveat, "By the way, whatever you invent during that time is our property." Or if they are very smart, "Whatever you invent during that time is 75% our property." Of course, some people will use that time to invent. Others won't.
Fourth, there are numerous management tools designed to get employees to take risks, make mistakes, be creative, and innovate. Maybe you pose a set of questions? Or challenges? Fill a room with toys. Or finger paint. Or clay. Or music. Incense? You get the idea.
Fifth, what most managers do with "creatives" working on a creative assignment is they provide rough guidelines for a rough draft. They set a deadline for a rough draft. Then they let the creatives do their thing. Once the manager has a rough draft, the manager works with the creative employee(s) to come up with a plan for moving the rough draft to a final draft.
Here's a corollary of the managing creativity question: Sometimes a manager doesn't have clear expectations---a clear goal with clear guidelines---just yet. Sometimes a manager doesn't know, at the outset of a project exactly what success will look like. The manager doesn't know what she is looking for... yet. Maybe this is a project of first impression. Sometimes the manager needs an employee to "take a crack at it" so the manager has something to look at. Then the manager has a better idea of what the final product should be. This is a case where managers end up using employees to work out the early stages of the manager's own creative process. Sometimes this can be very frustrating for the employee because the employee works hard on a project that feels very creative only to have the manager send the employee back to the drawing board several times until the manager finally takes over the project and totally reworks it. The employee feels like all of his own work has been for nothing and/or the manager has hijacked the project. What is a manager to do in this situation?
Be very clear and very honest with the employee from the outset of the assignment. Explain to the employee that you don't have a clear goal with clear guidelines: "I don't know what success will look like. I don't know what I'm looking for. What I really need is for you to 'take a crack at it' so I have something to look at. Let me be clear. This is really my project and I'm asking you to help me jump-start my own creative process. I am really asking you to come up with a very rough draft. I will probably send you back to the drawing board several times. Then at some point I'll take over the project and totally rework it. This is still a very important project to me. This assignment is very important and very difficult. Do you think you are up for it?" By saying this, you are spelling out your expectations as best you can. If there are parameters you do know about, try to articulate them. And don't forget to attach a deadline on the first very rough draft... and every time you send the employee back to the drawing board.