6
Implementing a High-Performing Idea System
SEVERAL YEARS AGO, a vice president at a Fortune 500 financial services company approached us to help her set up a high-performing idea system. She was in a hurry and asked if it was possible to get the pilot areas started in two months and begin rolling the system out a few months later. We explained that it was certainly doable but would require the creation of a strong design and implementation team, whose members would have to be able to do a lot of work in a short period of time. The effort would also inevitably require her to champion some organization-level changes to the leadership team. She agreed and recruited the team, and we set to work.
During the initial training sessions, the design team members began to appreciate the scale and scope of what they were being asked to do. Unfortunately, the vice president skipped out on those training sessions after the first hour, so she never really understood what designing and launching the new system would involve. She soon began pushing up the launch dates, insisting on unrealistic deadlines, and dismissing the team’s advice and requests. At what turned out to be our last meeting with the design team, its members were very disheartened and felt betrayed by that VP. Shortly thereafter, the team’s leader left the company, and the effort disintegrated.
The mistake this vice president made was to assume that setting up an idea system was relatively straightforward, simply a matter of layering a collection and evaluation process on top of the existing organization. Unfortunately, this is a common assumption. But launching an idea system without properly preparing both the organization and its people usually dooms the initiative to failure.
This chapter is a step-by-step guide to implementing a high-performing idea system. It is based on what we have learned over the last two decades from studying, watching, and participating firsthand in both successful and failed launches. The implementation process we recommend has the following nine steps:
Step 1. Ensure the leadership’s long-term commitment to the new idea system.
Step 2. Form and train the team that will design and implement the system.
Step 3. Assess the organization from an idea management perspective.
Step 4. Design the idea system.
Step 5. Start correcting misalignments.
Step 6. Conduct a pilot test.
Step 7. Assess the pilot results, make adjustments, and prepare for the launch.
Step 8. Roll out the system organization-wide.
Step 9. Continue to improve the system.
How long each of these steps take depends on the size and complexity of the organization and the overall sense of urgency. A small and simple organization can get a system up and fully deployed in less than six months, whereas a large global organization may need a couple of years or more, depending on the resources committed to the initiative.
STEP 1
Ensure the Leadership’s Long-term Commitment to the New Idea System
When a leadership team sees an idea system as an important capability-building initiative, its members are more likely to have the patience and perseverance to provide the long-term leadership needed to deploy the system in a strategic manner.
Consider how the high-performing idea system at Alpha Natural Resources (“Alpha” for short), the second-largest coal-mining company in the United States, gave it a unique capability that was an important element in making a major strategic acquisition.
On April 5, 2010, an explosion at the Massey Energy Company’s Upper Big Branch coal mine resulted in the deaths of twenty-nine miners. These were not the first deaths in Massey’s mines. The company had one of the worst safety records in the industry and was constantly in conflict with the Federal Mine Safety and Health Administration (MSHA). The backlash and lawsuits from the disaster suddenly put the ongoing viability of Massey into question. In June 2011, Alpha, a mining company of approximately its same size, stepped in and acquired Massey.
Although both companies used similar equipment and technologies, the way they dealt with their employees was vastly different. Massey was highly autocratic, whereas Alpha put a great deal of emphasis on listening to its employees and getting their ideas. Since its founding in 2002, Alpha’s guiding principles were incorporated into what it called its “Running Right” philosophy, which focused on the importance of the front-line miner. The Running Right idea system had been started with a focus on safety but grew to include front-line ideas on productivity and other areas as well. Instead of having Massey’s management-dictated approach to safety, Alpha involved its miners in identifying safety problems and coming up with ideas to address them. As the system took hold, Alpha noticed that the more ideas per miner a mine got, the fewer safety problems it had.
For Alpha’s CEO Kevin Crutchfield and the members of his leadership team, running safe mines was a fundamental value and vital to the company’s long-term success. Having all been former miners themselves, they had firsthand knowledge of the inherent dangers in mining. Studies by Alpha showed that 88 percent of safety incidents were due to unsafe behavior on the part of the miners, not to deficiencies in equipment, technologies, or safety policies. And the best way to get safe behavior, Alpha’s leadership reasoned, was not through top-down edicts, but by listening to the miners’ safety concerns and rapidly acting on their ideas. After all, the miners paid a steep price for poor safety. Alpha’s leaders never questioned the time, effort, and resources needed to make their idea system successful.
Soon after Alpha acquired Massey Energy, it moved aggressively to integrate the Running Right idea system and the Alpha culture into every one of the former Massey mines. Each mine was shut down for a day of training in order to assure that the miners learned about the Running Right philosophy, why this philosophy was important to them and the company, and how the idea system worked. A member of Alpha’s leadership team attended each mine’s training day to personally commit the company to acting on the miners’ ideas. The commitment shown by Alpha’s leadership in shutting down the mines for this training was not missed by the miners. It was inconceivable that their former bosses would have stopped production for training, much less an entire day of it!
A second early move by Alpha’s leaders was to hold a two-day “Leadership Summit” for the company’s 220 top managers—roughly half of whom came from Massey. For longtime Alpha managers, the summit was a chance to work on what the Running Right philosophy meant for the future; for former Massey managers, it was an introduction to an entirely new way of managing. CEO Crutchfield framed the importance of the company’s front-line focus in a poignant way: When all the company’s top managers were attending the summit, every mine continued to operate normally; but when the miners were being trained, all production stopped. The front-line miners, not management, Crutchfield emphasized, were the people most critical to the company’s success.
The investment paid off. Within five months of the acquisition, a number of the former Massey mines had reached or exceeded Alpha’s average number of ideas per miner, and their safety performance had improved dramatically. The leadership team then proceeded to develop a five-year plan to keep improving the idea system’s performance so it could continue to deliver major strategic advantages. (Disclosure: one of the authors advised the company during this process.)
The success of Alpha’s acquisition of Massey depended on rapidly fixing Massey’s safety problems, which would have been very difficult without the Running Right idea system and Alpha’s leaders’ quick action to integrate it into the newly acquired company.
When considering whether to launch a high-performing idea system, the first question that needs to be asked is why. What are the key strategic capabilities that the organization wants from the initiative? In the case of Alpha, its leaders knew that mine safety was critical for the company’s success, and set up its idea system with this in mind. From there, it grew into providing additional strategic capabilities.
STEP 2
Form and Train the Team That Will Design and Implement the System
As we have said before, a high-performing idea system has to be designed so it can be integrated into the way the organization already works. Step 2 is to form and train a team that has the power, credibility, and collective knowledge to design such an integrated system, to address the potentially significant organizational issues that will inevitably arise, and to lead the launch organization-wide.
To see how this works, consider how Health New England (HNE), a medium-sized health care insurance company, put together its seven-member team to design and oversee the implementation of its idea system. The team comprised
the company’s well-respected IT director as its leader;
the company’s general counsel and a member of the Executive Leadership Team (ELT), who volunteered to be the executive champion;
four middle managers, one each from operations, sales, marketing, and technology; and
a front-line employee who was known for constantly proposing improvement ideas.
Note the composition of this design team. First, it had a respected upper middle manager as leader. Second, it included a member of the ELT to provide top management’s perspective, help the team navigate sensitive issues, and promote the idea system at the highest level. Some of the team’s recommendations would require modifications in corporate-level policies and practices, or commitments of corporate-level resources. The ELT member was able to provide an executive perspective and offer critical advice, such as “It might be best to say this in a different way” or “Some members of the ELT might have a problem with this for the following reasons.” He also acted as a conduit for information between the team and the ELT.
Third, the team included a cadre of middle managers, who represented an important constituency that would be critical for the success of the new system. Finally, the front-line employee brought a perspective to the team that the other members lacked. For example, during a discussion of how much time employees would be given to work on improvement ideas, and how this time would be allocated, one of the managers commented that he thought supervisors would be very supportive of freeing their people’s time to work on ideas. After all, he reasoned, these ideas would improve their units. But the front-line employee said, “With respect, the situation in the work centers is actually quite different from what you imagine. Supervisors are under a lot of pressure to service the customers in a timely fashion. Just today, my supervisor told me that we had so many claims to process that she was reluctant to let me attend this meeting. I will have to somehow make up the work later today. My biggest concern is that supervisors won’t support the system. They will see it as interfering with the work that has to get done.” This point led to a discussion of staffing issues, the need for more training and coaching support for the supervisors, and the importance of holding supervisors and managers accountable for ideas. The team also realized that CEO Peter Straley would have to communicate strongly to the supervisors that ideas were a priority, and it was now company policy that employees were to be given release time to work on them.
Once the design team is assembled, it must be provided with a thorough education in idea management. Its members will need to have a strong understanding of what high-performing idea processes look like, how they work, and how to address the challenges they will face in creating one. The initial training can involve classes taught by experts, reading relevant books, and perhaps visits to idea-driven organizations. For the HNE team, the process began with a day of training in idea systems, and then reading and studying two books on managing ideas.
Once the team began to apply its new knowledge, it began to learn by doing, starting with the assessment of HNE from an ideas perspective (see Step 3). As the team members interviewed front-line employees, supervisors, and middle and upper managers, they discovered impediments to the flow of ideas that needed to be addressed. This “action learning” continued as the team designed their system and rolled it out through their company. In the end, the members of the design team developed considerable expertise in the management of ideas, and HNE went on to successfully implement a high-performing idea system.
If you take care to choose the right people for your design team, and then provide them with the training and time they need to do their job well, you will be setting your new idea system up for success.
STEP 3
Assess the Organization from an Idea Management Perspective
The assessment has two purposes. First, it must identify misalignments and any potential challenges to implementing the idea initiative. Second, it should try to find opportunities to integrate the idea system into the organization’s existing systems. The assessment typically includes interviews with front-line workers, supervisors, and managers to discover what might hinder the flow of ideas and what might help it. Here are some typical lines of inquiry:
Have the interviewees been involved in implementing any ideas or improvements in the past in the organization? If so, what were the challenges they faced and what helped them along the way?
How easy is it for employees and supervisors to get the resources and support they need to implement their ideas?
What other mechanisms for bottom-up ideas does the organization have? How well do these work, and what, if any, are the problems with them?
Have there been any failed idea initiatives in the past? Why did they fail, and what are the implications of their failures for the new initiative?
How can existing practices and forums—such as annual evaluations, bonuses, reporting systems, newsletters, CEO e-mails, corporate videos, regular meetings—be used to support the idea initiative?
Does the culture, and the way people are evaluated and rewarded, support innovative behavior? What changes, if any, are needed in these areas?
What problems, if any, might keep the upcoming idea system from being successful?
Some of the issues that assessments uncover are relatively easy to fix, such as adding a modest budget to allow teams to make purchases to implement small ideas, retasking support departments to provide help with implementing ideas, or amending policies to increase the decision-making authority of people at lower levels. But assessments almost always flag more fundamental concerns as well. Take, for example, the issues we identified from an assessment of an international division of a Fortune 500 food and beverage company (sample supporting comments from interviewees are in italics):
Past leadership behavior was creating serious concern that top management would only support the idea initiative and not provide the active leadership it would need.
My biggest fear is that top management will pay only lip service to this [the idea system] and not realize that it will require work from them, too.
To be successful, this initiative really must come from the top and be led by the top.
Top management’s overdependence on the numbers when making decisions was creating a lot of non-value-adding work and leading to some poor decisions.
One new product was clearly terrible. All thirty members of its marketing team agreed that it was a disaster. Yet we still had to spend several months and $40,000 to prove it to top management.
Innovation can dilute margins in the short term, and if you don’t hit your quarterly numbers, you are dead here.
We focus on costs and budgets so much that it is usually much easier not to do anything new.
The company does not have a culture of innovation. “Innovations” are limited to minor line extensions and packaging changes.
This company kills anything that has a germ of innovativeness in it. We require too much analysis and make people jump through too many hoops.
We need to carve out time for innovation, and not have it be just an add-on.
We are told it’s OK to fail, but it isn’t, really.
None of these issues came as a complete surprise to anyone. But when the design team brought the documented list of them to the leadership team, the problems could no longer be ignored.
A tactic we use to elicit deeper conversations among the design team members about the issues the team needs to face is the pre-mortem: “Suppose we were to get in a time machine and go forward three years, and you were to learn that the idea initiative had failed. Why would this have happened?” This question usually surfaces some “brutal facts” that would otherwise stay buried.
Another purpose of the assessment is to identify potential opportunities to integrate the idea system into existing management systems, and how these, in turn, might be adapted to support the needs of the idea system. This is an application of the principle of “minimal intervention”; that is, whenever doing something new in an organization, it is much better, wherever possible, to take advantage of what is already being done instead of creating entirely new mechanisms. Existing systems, policies, and practices incorporate a great deal of previous learning. Building on them takes advantage of this learning while reducing the risk of introducing new problems. In addition, it is more effective and respectful of people to fit the necessary changes into their existing work routines as much as possible. The principle of minimal intervention encourages this integration, makes adapting to the new system easier, and reduces resistance to it.
Some examples of the questions we use to identify these minimally intervening opportunities are as follows:
Can idea meetings be integrated into regular department meetings?
Can idea performance be incorporated into existing review processes for both workers and managers? What about the merit, bonus, and promotion processes?
Can idea system training be incorporated into new employee orientation? Can idea activator training modules (discussed in Chapter 7) be incorporated into the organization’s existing training matrix? Are there any existing training modules that could be tweaked into idea activators?
Are there existing communication forums, such as corporate newsletters or Internet portals, that can be used to support the idea initiative?
How can the idea system help, and be helped by, existing improvement and innovation efforts—such as Six Sigma, lean, innovation centers, or new product development?
The more completely the idea system can be integrated into existing practices and procedures, and the fewer new practices and procedures are created especially for it, the more easily and quickly it will become accepted as a regular part of the way the company works, and the better it will perform.
By the end of the assessment step, you will not have a complete inventory of every misalignment and integration opportunity. However, you should have identified the major misalignments that you need to correct before you start, as well as some integration opportunities that will make the idea system easier to deploy and more readily accepted by the organization. As we have previously discussed, removing misalignments is an ongoing process that never ends. The same is true of discovering and creating new integration opportunities.
STEP 4
Design the Idea System
As Oliver Wendell Holmes once put it:
I would not give a fig for the simplicity this side of complexity, but I would give my life for the simplicity on the other side of complexity.
Many design teams begin their work thinking that it will be simple—all they will need to do is to set up a process to collect ideas from front-line employees. But by the end of their training and the assessment, almost every design team feels overwhelmed by the complexity of setting up a major new management system whose implications cut across the entire organization. The team’s goal—which can be very challenging—is to come up with a simple system that successfully addresses all this complexity. The system has to be simple in order to handle large numbers of ideas efficiently.
To push design teams to attain the necessary simplicity, we like to ask them—even in large organizations—to come up with a document of no more than five pages laying out the entire system. To do this, the team members will have to address a number of issues about the mechanics of the new system and how it will be managed and led, such as these:
Who will be responsible for overseeing the system?
What will the mechanics of the idea process look like? That is:
How will ideas be collected, processed, and implemented at the front-line level?
What levels of authority are needed to implement which kinds of ideas?
What budgets and resources will each level have access to?
What will the escalation process look like?
How will the process integrate with other problem-solving and improvement mechanisms?
How will good ideas be replicated?
What metrics will be used to measure idea performance and how will managers and employees be held accountable for them?
Will the company offer recognition to employees and/or managers? If so, how?
What is the role of middle managers and senior executives in the idea system? What will be their new “leader standard work” (discussed in Chapter 2) to support ideas?
What initial and ongoing training will be given to employees, supervisors, managers, and the leadership team?
How will the performance of the idea system itself be evaluated and improved?
STEP 5
Start Correcting Misalignments
It is impossible, and also unnecessary, to align your organization perfectly before launching your idea system. As we discussed in Chapters 3 and 4, the process of alignment takes time, and maintaining and improving it will be an ongoing effort.
The true nature and full ramifications of some misalignments will become clear only after the system launches. Others will be clear from the outset, but dealing with them will need to be deferred for practical or political reasons, or because fully correcting them will require more time than is available. But before the launch, it is important to eliminate any misalignments that are going to seriously hinder the implementation of front-line ideas.
Recall, for example, that large national retailer where front-line supervisors and managers were forwarding even the smallest decisions to their bosses. Senior executives complained to us about the number of low-level decisions requiring their approval. In one case, a straightforward request for a whiteboard marker had gone up through four levels of management until it landed on the desk of the vice president for purchasing. Such ridiculous misalignments in decision-making authorities had to be corrected before the launch, or making even the most obvious small improvements would be painful. The supervisors’ spending authority was increased significantly, and each department was given a modest budget for purchasing supplies for small improvements.
But a related, more delicate misalignment needed to be dealt with more diplomatically. Several members of the leadership team believed that while the company should move in the direction of a more empowering culture, pushing too far too fast would be imprudent. So the leadership adopted a go-slow approach. At first, the idea system would focus on small ideas at the departmental level. Cross-functional ideas would be handled at the discretion of the managers involved, using existing or informal channels. Vice presidents who wanted to move faster could encourage their managers to take more initiative on bigger or more cross-functional problems, and the vice presidents who wanted to go slower could do so.
STEP 6
Conduct a Pilot Test
A pilot test is a small-scale live test of the idea system before it is rolled out to the entire organization. For larger organizations, it typically involves running the idea system in a small set of departments or teams (typically, three to five). In small organizations—say, those with less than forty people—the pilot test may involve everyone and simply be a designated time frame of experimentation and learning after the idea system is started up, but before it is considered to be “officially” launched.
From time to time, we encounter impatient leaders who insist on launching their idea initiatives without a pilot test. While omitting or shortcutting the pilot might appear to get the idea initiative off to a faster start, doing so will dramatically slow things down later. Problems will go undiscovered that will become increasingly disruptive and difficult to correct when the system is broadly deployed. Also, opportunities to enhance the system’s performance and increase its acceptance across the organization will be lost.
For example, a few years ago, the leadership of a U.S. military base was anticipating severe budget cuts. Eager to find cost savings while also meeting increasingly demanding service requirements, the base’s leadership launched its idea system without a meaningful pilot test. Nine months later, only 25 percent of the idea teams were functioning well. A major reason for this shortfall was that the training for supervisors had been limited to a mandatory viewing of a fifteen-minute video explaining the process. This video, though well intentioned, had been rushed into production. It was uninspiring, factually incorrect about the process, and contained a great deal of bad advice. As a result, more than a hundred front-line managers had been running painfully unproductive idea meetings for months, and significant resentment toward the idea system had developed throughout the base. A well-executed pilot step would have detected and fixed the problematic training before it created the much bigger problem that required considerable leadership time and energy to correct. As it was, the system struggled for almost two years before gaining any real traction.
A pilot test should
provide a small-scale live test of the idea system to identify opportunities to make it better,
generate evidence of the value of the system that can be used to build support for it,
develop a cadre of coaches and champions experienced in managing ideas to support the new system as it rolls out across the organization, and
help replace uncertainty about the new initiative with anticipation.
Live Test. The launch of an idea system introduces many changes across the organization, the full ramifications of which are impossible to predict. The pilot provides an opportunity to identify any resulting problems and fix them before they can do much damage. It allows people to point out these problems without the risk of being viewed as complainers. The status of “pilot” also gives a license to experiment and to make even substantial changes to the initial design without anyone losing credibility or being embarrassed. In this way, the pilot is a safety zone.
Even when significant problems have been identified through the assessment (Step 3), sometimes decision makers need more evidence before being willing to tackle them. For example, at a large European insurance company, the assessment had predicted that the limited IT support for employee ideas would create a bottleneck, but management was reluctant to dedicate more IT resources prior to the pilot. However, when the CEO and CIO (chief information officer) were shown a list of the ideas from the pilot that had been put on hold as a result, along with estimates of the opportunity costs of each week’s delay in implementing them, the CIO immediately reassigned a small team to support the idea system.
Problems with training, linkages with other systems and processes, resourcing, and behavior are recurring themes in the pilot phase. But because these are often situation-specific, they can be difficult to see or solve until the ideas start coming in and the exact nature of the problems is understood.
Evidence of Value. It is always useful to develop early evidence of the value of the idea system. Almost every organization has some managers who have previously had bad experiences with suggestion box–type systems or other poorly conceived idea initiatives, and who naturally have reservations about the value of the new idea system. Our favorite method to start addressing these reservations is to provide these managers with a list of front-line ideas implemented during the pilot, as we did for the CEO of the insurance company described earlier. Such a list also helps reduce any concern or hesitation on the part of the employees, as it demonstrates that the ideas coming in are not only nonthreatening, but helpful.
Develops a Cadre of Coaches and Champions. By the end of the pilot at STCC (the community college discussed in the last chapter), the supervisors in charge of each of the three pilot teams had become very proficient at managing ideas. The counsel of this small cadre of experts proved invaluable. During the college-wide rollout of the idea system, this trio volunteered to attend meetings in the newly launched areas to provide coaching, and they invited supervisors in these areas to observe their own meetings. One issue they helped with, for example, was that some of the more recently promoted supervisors were still feeling out their roles, and their people’s ideas were frequently putting them in situations where they were unsure of their responsibilities and authority. Did they have to accept all the ideas their team voted to do, even the ones they disagreed with? Was it appropriate for their subordinates to approach other supervisors, without their being present, if they needed information or help with ideas? And what happens when a team wants to work on an idea, but the supervisor has sensitive information he or she cannot share that is relevant to how well the idea will work? The members of the cadre, who had wrestled with these kinds of issues themselves, had both the legitimacy and experience needed to help the new supervisors work through them.
Replacing Uncertainty with Anticipation. When the decision to launch an idea system is announced, typically everyone has a lot of questions and concerns: “How will it affect my job?” “How much time will it take, and how can I find that time?” “How can I come up with all the ideas expected of me?” “Is the effort really worthwhile?”
A successful pilot test turns these concerns into a positive anticipation by answering these questions and demonstrating the benefits of front-line ideas. At the national retailer we discussed in Step 5, when workers in other departments saw their colleagues in the pilot areas using their new idea systems and spending authority to eliminate long-standing annoyances, they began pestering their managers about when they could start to work on their problems, too.
Organizing the Pilot
To fulfill its purpose, a pilot has to be successful both from the technical perspective and the management-of-change perspective. That is, it has to verify that the idea system design basically works, and it has to demonstrate the advantages of the system. If the design team has done its job, technical success should be straightforward. Consequently, the overriding consideration becomes demonstrating the system’s value.
The critical design questions for the pilot are as follows:
Which areas should be selected for the pilot test?
What kind of training and support should be provided to pilot-area supervisors and employees?
How long will the pilot last?
A key consideration in selecting pilot areas is their managers’ leadership skills and enthusiasm for the initiative. The single-biggest factor in making a pilot area successful is the quality of its manager. The pilot test is not a time to work with difficult managers, troubled teams, or areas with logistical issues that would add to the challenges of starting an idea process. The time to tackle challenging areas is after the organization has developed expertise in idea management.
Once the pilot areas are selected, their managers need to receive training as well as plenty of support and coaching. The certification program we described in Chapter 2 is a good example of what this might include.
The pilot period is generally three or four months long. People need enough time to learn their new roles, enough ideas need to be processed to give the system a realistic “stress” test, and enough ideas need to be implemented to demonstrate the value of the system.
Make Corrections While the Pilot Is Still Running
It is important not to wait until the pilot test is over to review performance and make changes. The earlier that problems are identified and action is taken, the better the results of the pilot test will be.
The trick to rapid problem identification is getting good information in a timely fashion. Design team members and managers should observe idea meetings and interact with the people in the pilot areas. Everyone in these areas should be encouraged to “yell loudly” when they become aware of system-related problems. In addition, pilot area supervisors should meet regularly with the design team to discuss issues and concerns.
The insights gained through these interactions will help the design team understand what is driving the quantitative data it collects. Such data typically includes the numbers of implemented ideas in each area, how many escalated ideas have been forwarded to whom, and how many have been responded to in a timely manner. To provide quantitative data in near real time, some organizations develop highly visual “dashboards”—typically driven by web-based programs that draw information directly from the databases used to record and manage ideas. Dashboards allow managers to easily monitor how ideas are flowing, analyze patterns, and quickly identify problems. Taken together, the qualitative and quantitative information gives the design team a holistic view of the system and allows them to quickly flag areas that need help.
For example, during the three-month pilot test at the large national retail chain we discussed earlier, the pilot area supervisors were encouraged to complain whenever they experienced problems or bottlenecks, and to propose system improvements. To make this process as easy as possible, every week each pilot area supervisor and his or her manager met with a member of the idea staff to talk about opportunities to improve the system. In addition, once a month, the idea staff organized a one-hour meeting with all the pilot area supervisors and their managers so they could share experiences, discuss tactics and problems, and swap solutions. In the first meeting, several items came to light and were quickly resolved:
Supervisors reported that ideas requiring even modest purchases were getting backlogged in the procurement process. The VP of human resources, who was also the idea system’s executive champion, met with the head of purchasing, who agreed to initiate a fast-track purchasing process for front-line ideas and to staff it with an energetic purchasing agent instructed to help the pilot departments in any way she could.
It became apparent that the supervisors’ idea facilitation skills were weak. Within a week, a training/coaching program was developed and delivered to each supervisor on an individual basis.
Because the front-line teams turned out to be much more responsible with their budgets than management expected, their spending limit was raised from $25 to $250 per idea.
As we mentioned earlier, the status of “pilot” confers a license to suspend normal operating rules and to make changes to the idea system, and to the management systems, while the pilot is still underway. As evidence begins to accumulate that certain policies or procedures are hindering ideas, top managers are often willing to suspend or allow temporary workarounds to them during the pilot period. Such changes are generally low-risk given that they will automatically expire with the completion of the pilot test. But if they do prove effective, it is then much easier to make the case for a permanent change.
STEP 7
Assess the Pilot Results, Make Adjustments, and Prepare for the Launch
Once the pilot has been completed, a full review of it should be conducted with the intent to
Identify any problems with the idea-handling process, including those caused by misalignments in the organization’s management systems.
Determine whether additional resources are needed in any critical areas.
Capture “lessons learned” that will help with the organization-wide rollout.
Many of the issues identified in the review, such as training shortfalls or glitches in the mechanics of the idea process, will be solvable by the design team. But some issues will require senior management involvement. Two of the more common ones are (1) difficulties with the escalation process and (2) decision-making processes that are cumbersome, inappropriate, or flawed.
Few organizations have systems in place to effectively handle ideas escalated from the front lines. Until managers experience the challenges involved, it can be hard for them to get their minds around how their escalation process should work. Recall that ideas are escalated for three reasons: (1) they need permission from higher levels; (2) they need more resources than are available to front-line teams; or (3) they are cross-functional—that is, they require the involvement of different areas of the organization. Ideas escalated for either of the first two reasons can usually be handled through the existing chain of command. But cross-functional ideas originating from the front-lines are a different story.
While almost all organizations have experience working with cross-functional ideas, this experience is typically with ideas that come down from higher up in the organization. They usually address larger issues and are handled either through regular management meetings, by special ad hoc project teams, or with informal manager-to-manager interactions. Such approaches are impractical for handling large numbers of (generally smaller) bottom-up cross-functional ideas addressing problems on the front lines that are not so visible to management. These kinds of ideas need streamlined mechanisms capable of handling them quickly and efficiently. Because an escalation process will define how senior managers will interact with bottom-up ideas, senior managers need to be directly involved in its design.
A second issue that often requires senior management attention is when decision-making processes are too cumbersome, inappropriate, or flawed to handle large numbers of bottom-up ideas. Proposed improvements may require too many approvals, approvals at too high a level, or approvals from the wrong people. Rationalizing these kinds of decision-making problems may require some political wrangling, but conceptually they are simple to correct.
A decision-making problem that is more challenging to address is when management puts too much emphasis on the numbers and requires detailed cost-benefit analyses (CBAs) for even the most obvious ideas. As we discussed in Chapter 2, CBA is a poor decision-making tool in most situations because it is inherently inaccurate. Furthermore, insisting on CBA as the default decision-making tool merely creates a lot of non-value-adding work for front-line employees. Because this institutional mindset typically comes from the top, it typically has to be changed by the top, too. A good way to start is to present senior managers with strong evidence that too much emphasis on CBA is actually costing them money by blocking profitable ideas.
For example, during the assessment phase at a financial services company, many people warned us that the leadership’s myopic focus on the numbers was blocking the flow of ideas. For example, a secretary in accounts receivable told us that the company was printing the wrong return mail address on its invoices, causing hundreds of checks per week to go to the wrong office some twenty miles away across a major city. But she couldn’t get the problem corrected without doing a thorough CBA to prove that the money saved would justify the expense of the change. Because she didn’t know how to do this, she dropped the idea. She brought it up again during the pilot phase of the new system, when the CBA requirement had been suspended for obvious low-cost improvements. The problem took the IT department only a few minutes to correct. In its quest to build evidence for making the temporary suspension of CBA permanent for obvious small improvements, the design team went back and calculated that the delayed depositing of checks had been costing the company tens of thousands of dollars annually in lost interest.
Over the course of the pilot test, it became obvious that the company’s emphasis on CBA had indeed imposed a huge barrier to many good ideas, and the policy mandating its use was permanently dropped except for ideas where larger expenditures were involved.
The second goal of the postpilot review is to determine what additional support-function resources will be needed once the idea system is launched organization-wide. As we discussed in Chapter 4, this information is difficult to gather in advance. But the experience gained from the pilot will provide a good indication of where more support-function resources will be needed.
The third goal of a postpilot review is to identify ways to make the organization-wide launch go as smoothly as possible. For example, at the U.S. military base mentioned earlier in this chapter, a concern emerged from the short pilot that middle managers (some of whom were midranking officers) were not observing enough idea meetings and doing enough coaching of their supervisors. When the middle managers heard this, they requested help with what exactly they should be looking for when appraising a team, and how they should respond to what they saw. As a result, a list of specific things to look for was generated, along with corresponding coaching and advising tips.
STEP 8
Roll Out the System Organization-wide
The pace and nature of an idea system launch depend on the organization’s size, structure, culture, resources, and leadership team’s sense of urgency. If the unit is small, it may make sense to train everyone together, and launch the whole system at once. But even in medium-sized units, rolling the system out gradually has a number of advantages. The first involves resources. Each department will require support during its startup phase. Managers, supervisors, and employees will all need to be trained and coached. Few organizations have the resources to do this for everyone at once. Pacing the rollout to match the available resources also destresses the launch and allows support functions such as IT, maintenance, purchasing, and engineering to more gradually adjust to their added responsibilities to help with front-line ideas. Furthermore, a phased rollout gives higher-level managers more time to get involved in each area’s launch.
The second advantage of a gradual rollout is that each departmental launch benefits from the experience gained by its predecessors. The growing number of managers with deep expertise can be particularly helpful when rolling out the system to departments with special challenges—which is one reason that it is a good idea to schedule such departments later in the rollout.
A final advantage to a rollout launch is that departments with more reluctant managers can be scheduled near the end. By that time, they should have witnessed the system’s success across the organization and have heard from their colleagues how helpful front-line ideas have been to them in meeting their goals. The momentum of the system and its obvious benefits makes continued resistance foolish.
Training
For a successful launch, significant training is needed at every level. Managers need to understand the philosophy behind the new idea system, their own roles in it, and how front-line ideas can be used to help them to achieve their group’s goals. While much of the conceptual knowledge needed can be delivered through prelaunch workshops, the actual idea management skills can only be honed through practice and coaching. And the best place to get this practice and do this coaching is when managers are working with their own teams on real ideas in their own areas.
Many leaders make the mistake of throwing their supervisors into their new roles with little or no training. In idea-driven organizations, a supervisor’s job switches from making sure that the work gets done to making sure that the way the work gets done is constantly improving. Supervisors need training, practice, and coaching to develop the skills and attitudes required for this new mindset and role.
In the beginning, front-line employees will need a short training module on how to participate in the idea management process, but this is only the beginning. Most of their training will be done on an ongoing basis, and it should be primarily aimed at making them able to identify problems that were previously invisible to them. This is the focus of the next chapter.
STEP 9
Continue to Improve the System
An idea system is not a “fire and forget” initiative. Even mature idea-driven organizations are continually finding ways to improve how they manage ideas. For example:
Allianz Slovakia (which in 2009 won the award for most innovative “Operating Entity” in Allianz’s global network of 120 insurance companies) extended its idea system in 2010 to include its two-hundred-plus independent agents around Slovakia. Now, if agents have ideas or wish to report problems, a single function key on their computer opens a window that allows them to do so.
The Utah group of Autoliv, the automotive safety systems company, has long been among the most idea-driven companies in the world, consistently averaging more than fifty implemented ideas per person. Over the last few years, its managers have implemented a number of initiatives to put extra emphasis on high-leverage areas for ideas. One, for example, was to set up a “Jidoka Wall of Heroes.” Jidoka is the lean concept of stopping work to address problems or defects as they occur. The smallest problem, if not caught and corrected early, can become extremely costly later. When a worker flags a problem that could eventually become much larger, his or her picture and an explanation of the importance of that employee’s actions are posted on the Wall of Heroes.
When Pyromation discovered that most of each team’s ideas were being implemented by only one or two people, it redesigned its idea process to assure that no one could work on more than two ideas at a time, and everyone would be assigned at least one.
No matter how much care goes into the initial design of your idea system, it should be made clear to everyone that the system will need to constantly evolve and improve. A system that is designed for continuous improvement should itself be continually improving.
KEY POINTS
We recommend a process for implementing an idea system that has the following nine steps:
Step 1. Make sure the leadership understands that a high-performing idea is a long-term initiative to create a significant new strategic capability. Then the leaders will have the patience and perseverance to provide the long-term leadership needed and be able to deploy the system in a strategic manner.
Step 2. Form and train the team that will design and implement the system. The team should have the power, credibility, and knowledge to design a system that integrates well with how the organization already works, to address the potentially significant organizational issues that will arise, and to lead the launch organization-wide.
Step 3. Assess the organization from an idea management perspective to identify misalignments, potential implementation challenges, and any existing systems that can be built upon or that should be integrated with the idea system.
Step 4. Design the idea system. The better the idea system can be integrated into existing practices and procedures, and the fewer new practices and procedures are created especially for it, the more easily and quickly it will be accepted as a regular part of the way the company works, and the better it will perform.
Step 5. Start correcting misalignments. Before the launch, it is important to eliminate obvious misalignments so that front-line teams can implement most of their ideas without undue heroics.
Step 6. Conduct a pilot test. Without a good pilot, many problems that are easy to correct if caught early become disruptive and difficult to deal with when the system is broadly deployed.
Step 7. Assess the pilot results, make adjustments, and prepare for the launch.
Step 8. Roll out the system organization-wide. The pace and nature of an idea system launch depends on the organization’s size, structure, culture, resources, and leadership team’s sense of urgency. In most situations, it is better to roll the system out in a measured fashion.
Step 9. Continue to improve the system. An idea system is not a “fire and forget” initiative. Even mature idea-driven organizations are continually finding ways to improve how they manage ideas. A system that is designed for continuous improvement should itself be continually improving.