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CHAPTER 5
PUTTING THE PROCESS IN PLACE

This chapter lays out the characteristics of a good idea system. Without some kind of systematic approach, it would be impossible, even with the best of intentions, to deal with large numbers of ideas. What we mean by an “idea system” is a set of procedures—whether for a small group or an entire organization—that ensures that employee ideas are handled smoothly and fairly.

In our experience, many managers believe that structure and formality hamper the free flow of ideas. When they are shown the data from high-performing idea systems, a typical reaction goes something like this:

Perhaps in an ideal world or on a small entrepreneurial team, ideas could be managed this way. Tellingly, however, these same managers are not as casual about other things. Take travel expenses, for example. Would these managers leave a big barrel of cash in the corner and tell employees who are traveling to take whatever they need, spend it wisely, and put back whatever they don’t use? No need for receipts or a report, because they just get in the way, and “we’re just one big happy family?”

No organization manages its money this way, because it would soon be out of business. It has to ensure that what is supposed to be happening is actually happening. And, of course, managers who claim—in the absence of any measurement or control mechanisms—that large numbers of ideas in their organizations are naturally flowing to welcoming supervisors and being quickly implemented, are deluding themselves.

For one thing, the absence of a system makes employee ideas more of a nuisance than a help. Every idea that comes up has to be handled in an ad hoc manner. Not only does the employee involved have to figure out who to take it to, but that person also has to figure out what to do with it. Because every idea is handled differently, ideas require more time and effort to deal with. Managers who advocate completely informal idea processes often do not realize how these actually discourage people from bringing up ideas. A smoothly running system that is well integrated into the organization’s daily routine takes the hassle out of dealing with ideas and makes it feasible and reasonable for ideas to become central to everyone’s work.121

While every organization should design its process according to its unique needs, certain characteristics are common to all high-performing idea systems:

1. Ideas are encouraged and welcomed.
2. Submitting ideas is simple.
3. Evaluation of ideas is quick and effective.
4. Feedback is timely, constructive, and informative.
5. Implementation is rapid and smooth.
6. Ideas are reviewed for additional potential.
7. People are recognized, and success is celebrated.
8. Idea system performance is measured, reviewed, and improved.

CHARACTERISTIC 1: IDEAS ARE ENCOURAGED AND WELCOMED

The most effective encouragement an organization can give its employees to step forward with ideas is a track record of using ideas and giving people credit for them. Building this record can be a challenge, particularly if management has a long history of being unresponsive. Employees may have learned from experience that despite management rhetoric, in reality their ideas are far more likely to get them in trouble than to win them praise. To get people participating, managers may have to make special efforts to encourage ideas and demonstrate that they will be taken seriously. In particular, they must treat the first tentative suggestions of every employee very carefully.122

Consider what happened at Milliken Denmark when a janitor came up with an idea that put management in an awkward position. One of his jobs was to maintain the area in front of the entrance to the main building. He had noticed that visitors would often arrive late and flustered because they had had trouble finding the facility. (We had the same difficulty—our taxi driver took several wrong turns, had to stop a number of times to look at the map and we, too, arrived late.) The janitor’s idea was this: Buy a huge balloon and float it high above the facility to make it easy for people to find.

It didn’t take long for management to realize that this idea was quite impractical, given the expense and the strong winds along the northern Danish coast. But there was a problem: The janitor had just joined the company. This was his first idea, and management wanted to bend over backward to accept it. No one could find a way to make it work, but no one wanted to let the employee down, either. After wrestling with it for several weeks, senior management finally hit on a way out: Tell him a white lie. It was a wonderful idea, the employee was told. The management team had really liked it. Unfortunately, the Danish aviation authorities (who, in truth, had never been contacted) had told the company that the balloon would be illegal for safety reasons. The facility was too close to the Aarhus International Airport (it was in fact over thirty kilometers away), and if the balloon were ever to break loose, it might meander into the path of an airliner. The ploy worked, and the employee never found out about the fib. Over the years that followed, he went on to suggest a great many good ideas.123

However managers do it, they have to make it clear to everyone that each idea will be taken seriously. One effective tactic is to make a tangible commitment of personal involvement. For example, at a national marketing company, a single department manager decided to implement an idea system in his area. He personally chaired the biweekly meeting to discuss ideas and took responsibility for following through on many of them. This sent a strong signal to his staff. When Boardroom CEO Martin Edelston launched his company’s idea initiative, for more than a year, every idea from his approximately fifty employees went directly to him. He personally evaluated each one, gave his reaction to it, and followed through when necessary to see that it was implemented. When American Airlines started up its idea system, CEO Robert Crandall put in place a tough policy. Every idea that was not acted on within 150 days—an appropriate time for the airline industry—was automatically forwarded to him. Word quickly spread among managers that it was not pleasant to be called to his office and be asked to explain why they had been sitting on a potentially valuable idea.

Such unambiguous and visible management commitment makes it clear to employees that their ideas will be welcomed and that managers who don’t welcome them are out of step with their leaders. But even with this commitment, sometimes a more direct and personal nudge is needed to get a person to step forward with ideas. In the early years of American’s system, one suggestion came in to improve the system itself. Since it was generally perceived as a “headquarters” program, the suggester pointed out, why not put representatives out at the field stations who could actively promote the system to employees? The idea was adopted, and the “IdeAAdvocates” program was created. Every year, each station would nominate a person as its IdeAAdvocate. He or she would attend a day-long training session in Dallas, to learn about the program and how to encourage fellow employees to submit ideas. Within a year of the start of this company-wide program of personal encouragement, the number of employee ideas doubled.124

Top managers can also give impetus to an idea system indirectly. A few years before the janitor’s balloon suggestion, Milliken Denmark’s idea program had been languishing, and the company had decided to revitalize it. The managing director came up with a subtle and imaginative approach to break the ice and get things started. He sent his administrative assistant around to ask people individually whether they had any thoughts on how to improve things. She was a good choice of emissary. She was generally liked and respected, and she was threatening to no one. Nevertheless, her status as the boss’s assistant made people take her seriously. As employees gave her their ideas, she filled out slips for them and put them into the system. Soon employees began getting thank-you notes and seeing their ideas acted on. Over time, she began asking people with suggestions to fill the slips out themselves. Ultimately, the system became one of the benchmark idea systems in Europe.

CHARACTERISTIC 2: SUBMITTING IDEAS IS SIMPLE

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Many organizations that want employee ideas unwittingly make it difficult for people to submit them. They gear their processes for the biggest and most complex ideas that might come along. The suggestion forms ask for reams of information, copies of the forms are distributed to everyone who might possibly need to engage with the idea, and numerous signatures are required for approval. But the vast majority of front-line ideas are modest and straightforward to implement. A long and complicated form sends a not-very-subtle message that the only ideas of interest are significant ones. Who would send in an idea to lower the wattage of a light bulb in a particular supply closet (as one Milliken employee did) on a multipage form destined for review by several layers of management? At one large German company we advised, we estimated that three-quarters of the information requested on the form was superfluous for most ideas, and two of the copies were never used. The key is to design the submission process to match the kinds of ideas that employees will come up with—that is, mostly small ones. Should more information be needed, the employee can always be asked for it.

With this in mind, the process of submitting an idea can be made extremely simple. At Boardroom, all ideas are submitted on pieces of paper the size of a business card. Wainwright Industries uses three-by-five yellow slips of paper. Milliken and Idemitsu Kosan use full-size sheets of paper designed for multiple ideas. Some divisions of Dana and Dresser Industries ask employees to write their suggestions on special cards and post them on idea boards. LaSalle Bank and units of ABB collect ideas online with all suggester contact information filled in automatically by the computer. The few ideas that are too big or complex to capture this way are handled as exceptions and bumped into more elaborate processes.126

Another aspect of making it simple to submit ideas is to provide people with the support and access to information they need to develop more complex ideas. Think back to Art Sampson’s idea at the Defense Finance and Accounting Service (discussed in chapter 3). After conceiving the idea, he had to quantify how much time his organization was wasting dealing with missing checks. He had to learn about the Treasury’s system for tracking cashed checks, find out how his department might get permission to use this system, and figure out the details of the improved missing check procedure. Finally, he had to make the case for his proposal to management. In other words, he needed access to appropriate information and expertise, time to work on his idea, and the ability to test its feasibility.

Supervisors have tremendous leverage over the quantity and quality of employee ideas through the role they play in getting their people the support needed to develop ideas. In the late 1990s, an assembly line worker at Volvo’s Gothenberg plant stunned engineers with the largest idea in the history of the company’s suggestion system. His idea was to use advances in computerized fuel injection systems to control the fuel-air mix precisely enough so that certain pollution control equipment in each car’s exhaust system could be eliminated. With his supervisor’s help, the worker borrowed a vehicle to experiment with and got permission to use the maintenance shop and equipment on evenings and weekends. When he submitted his idea, engineers rejected it as laughably impossible. Imagine their surprise when he rolled out a fully functioning test vehicle! The idea saved Volvo millions of dollars.127

CHARACTERISTIC 3: EVALUATION OF IDEAS IS QUICK AND EFFECTIVE

As mentioned earlier, when Boardroom’s Martin Edelston started his company’s idea system, he evaluated every employee idea personally. With fifty employees turning in two ideas per week, this meant he had to make decisions about a hundred ideas each week. His routine was to do this on the weekend while riding his exercise bike. (The resulting long workouts made him fitter than he had been in a long time, he told us.) One Sunday, he read a proposal from a programmer for a software improvement that he couldn’t understand. On Monday, he stopped by the man’s office and asked him to explain it. After half an hour, Edelston still didn’t understand it. And then came an epiphany.

Edelston had hired this employee—a professional programmer—for his expertise. He understood far more about the company’s computer system than Edelston ever would. Why, then, was Edelston the one trying to decide whether the software change made sense or not? He realized that decisions about ideas were best made by those most familiar with the situation involved. His personal involvement with every idea might have been needed to get his system started, but now he was only getting in the way.128

Today, most decisions about ideas at Boardroom are made on the spot in the weekly department meetings. Relatively few are passed up the chain of command. Edelston had discovered a key principle: Making decisions about ideas at the lowest possible level in the organization leads to better decisions and faster implementation, and frees managers to focus on what they should be focusing on.

Most ideas are relatively small, and to appreciate them a person must have specific knowledge of the local circumstances. This knowledge usually resides in the same place that the ideas were formulated. The more managers remove routine decision making about ideas from employees, the more it slows things down, and the higher the probability that the decisions will be poor ones.

Although it is not uncommon for remote decision making to cause bad ideas to be approved, it generally skews the evaluation process in the opposite direction, making it overly cautious and prone to rejection. The less knowledge a person has of the context of an idea, the more information he or she needs to approve it. Approving an idea means taking some responsibility for the change involved. Rejecting it, on the other hand, merely maintains the status quo, and few people ever get in trouble for that. And the more distant a person is from the problem or opportunity that prompted the idea, the less urgently he or she feels the need for the proposed change. All this explains why the further away decisions are made from their point of impact, the longer they take, the more paperwork they generate, the costlier they are to make, and the worse they tend to be.129

Evaluating ideas at the lowest possible level is what underlies the astonishing speed with which some organizations can respond to them. Milliken, for example, has a “24/72” policy: Every idea is acknowledged within twenty-four hours, and a decision about it is made within seventy-two hours. (The decision might be to initiate further study.)

Ideally, the suggesters themselves should make as many decisions as possible about their own ideas. At Dana, for example, it is corporate policy that every employee is the company’s top expert in the twenty-five square feet he or she works in and should be the one deciding about ideas there. Employees have the authority to spend up to $50 on an improvement without the approval of management. Toyota and Wainwright also emphasize action rather than ideas. They don’t expect most ideas to be reported to the formal system until after they are implemented.

However much decision-making authority is pushed down to the front lines, some ideas will still require the attention of management or of people in other departments. Art Samson at DFAS could not have made the decision alone to change the procedure for lost checks. He needed to interact with several other functions and the Treasury Department and required the active support of upper management. And sometimes cross-functional ideas, or those requiring significant investment, may justify special ad hoc teams to work them through. But all these types of ideas are exceptions, and should be treated as such, when determining what the process for handling ideas will be.130

CHARACTERISTIC 4: FEEDBACK IS TIMELY, CONSTRUCTIVE, AND INFORMATIVE

When people know the status of their ideas and get timely and informative feedback, it helps maintain their ownership and interest in the ideas as well as their trust in the process. Good feedback demonstrates that an idea was taken seriously, even if it was rejected. Perhaps it was unworkable because the employee didn’t understand something or lacked a critical piece of information. Or maybe the idea was not fully understood by those considering it, because either it was poorly presented or they didn’t understand the issues involved. Good feedback gives the employee a chance to refine the idea or champion it better.

Feedback need not be extensive, nor does it have to take much time. For most ideas, it can be given on the spot and orally. At Boardroom and Grapevine Canyon, for example, ideas are presented by employees in their team or department meetings. Feedback is immediate as the group discusses the idea, refines or builds on it, discovers problems with it, and decides on what to do with it. Other companies, such as Dana Hopkinsville and Dresser Industries, give feedback on their idea boards, where everyone can learn from it. LaSalle Bank’s Web-based system allows employees to check on the status of their ideas at any time and read evaluators’ comments.131

In summary, feedback plays four important roles. It keeps the suggester engaged, is a targeted training tool, provides a check on the evaluators, and creates a dialogue that enables suggesters to tinker with their ideas and make them work.

CHARACTERISTIC 5: IMPLEMENTATION IS RAPID AND SMOOTH

To achieve rapid and efficient implementation of ideas, managers have to assure that the right resources are available to handle the volume and types of ideas that will come in. But until an organization has some experience with the flow of its employee ideas, it is difficult to predict what the required profile of resources will be.

To understand this point better, consider what we have come to call the “surge problem.” This phenomenon often occurs when an organization starts up an idea system after years of giving employees no place to go with the problems and opportunities they see. No matter how efficient the idea process is, in the beginning it is completely overwhelmed.

In the mid-1990s, a large New England retailer and clothes maker started up an idea system. Management was trying to get into the highly competitive business of selling military uniforms. It wanted employee ideas to help trim costs and improve quality. A pilot idea system was started in a department that had long been a poor performer.132

When the management team was warned that since the department had so many problems, it should prepare for a substantial surge in ideas, the CEO remarked, “My employees haven’t given in a single idea for more than a century. What makes you think they are suddenly going to start producing large numbers of them now?” Wanting to keep tight control over the process, the CEO assigned the vice president of operations responsibility for personally responding to every idea and making certain it was implemented.

Within two weeks, the thirty members of the department had submitted some 130 ideas. The poor vice president was hopelessly overloaded. A rule of thumb for the centralized suggestion box-type system this company had insisted on is that it takes about four hours of management or staff time to process each idea. In other words, this vice president had just been handed more than five hundred hours of extra work. Quite reasonably, he thought an organization-wide system like this involving several thousand employees would be impossible to handle. And so, after only a handful of suggestions had been implemented, he saw to it that the idea system was quietly killed.

The clothes maker’s attempt failed because it was not prepared for the overwhelming eagerness with which its employees responded. With its cumbersome process and lack of resources, its system simply collapsed.

Consider, on the other hand, what happened when BIC Corporation launched its idea system in the mid-1990s. Again, the early burst of ideas was a surprise to its management. Many of the suggestions required maintenance and engineering time, but developing and implementing employee ideas was a low priority for these two departments. A huge backlog of unimplemented ideas quickly developed. Charlie Tichy, the union coco-ordinator of the new program, came to Manufacturing Manager Dick Williams with the problem and the solution for it. Every Friday, a dedicated implementation team—which included an electrician, a millwright, and a toolmaker—was charged with implementing the suggestions.133

BIC’s response illustrates the type of creativity and flexibility that is sometimes needed to align resources to the volume and types of ideas that come in. When the bottlenecks in maintenance and engineering developed, alert managers responded rapidly. In our experience, companies that have trouble with implementation often lack the flexibility or willingness to redeploy resources to their bottlenecks. Typically, they are running lean, have tight budgeting, or are dealing with turf issues that make it difficult to share personnel. Whatever the reason, their ability to implement suffers, and employees lose trust in management’s sincerity.

As an organization gains experience with employee ideas, patterns emerge in the resources needed. At BIC, many ideas required help from the maintenance and engineering departments. In other organizations, it will be different. Information technology (IT) capacity, for example, is a frequent bottleneck. At one federal government agency we worked with, the average backlog for software change requests was three years. Despite the obvious need for more IT resources, the agency failed to provide them. The message to its seventeen thousand employees was clear: Don’t bother giving in any ideas that involve software changes.134

Contrast this with a Canadian company we evaluated for a quality award. Because many improvement ideas involved software changes, it set up a special rapid-response team. Its processing became so fast that turnaround times were tracked in minutes.

Delays in implementation cost money. But since this money is an opportunity cost, rather than a specific expense or loss of expected income, it does not show up on financial reports and often goes unnoticed. It is astonishing how many organizations in fiercely competitive situations, whose managements are desperate to find cost savings or additional revenues, overlook this obvious source of funds. Remember the New England utility from chapter 4 that was facing deregulation? Its management was under considerable pressure to find efficiencies, yet it had an eighteen-month backlog of unimplemented ideas worth almost $2 million a year in unrealized savings. But this number did not reflect the real cost of the backlog. What about all the ideas that employees didn’t submit because they didn’t think the company was serious about wanting them?

As we have already discussed, the vast majority of ideas are small, simple, and straightforward to implement. Just as the evaluation process works better when decisions are made at the lowest possible levels, the implementation process works better when the authority to act on ideas is pushed down to the front lines. We mentioned earlier that at Dana every employee is authorized to spend up to $50 to implement an idea. But some Dana divisions authorize $500, as long as the employee’s work team approves the idea. Front-line supervisors can generally make capital spending decisions up to $10,000 on their own.¹ When we asked one Dana plant manager how well such policies worked in practice—that is, were these policies ever abused, or was there ever a problem with unbudgeted expenditures?—he laughed. He told us that his front-line workers had proven far more conservative and resourceful with spending decisions than his managers had. And as far as unbudgeted spending was concerned, most of the ideas had such rapid paybacks that they paid for themselves within the same budget cycle. In other words, rapid implementation not only keeps the ideas coming in but delivers the savings or additional revenue from them quickly to the bottom line.135

CHARACTERISTIC 6: IDEAS ARE REVIEWED FOR ADDITIONAL POTENTIAL

In several places in this book, we discuss how ideas can lead to further ideas. The sixth characteristic of a good idea system is that it incorporates post-implementation processing to exploit these opportunities.

Organizations are integrated systems, with many interrelated components. As such, even a minor change in one place can create the need for adjustments in other places—that is, for more ideas. Take Harald’s idea at Grapevine Canyon Ranch that we described in chapter 2: “I can translate ride and brochure information into German.” Once this is done, still more changes will have to be made. How will the German guests learn about the translations? Perhaps the brochure rack in the reception area will need additional pockets, or the Web site might need to have a German option. Or maybe the reservations computer should alert the front desk when German guests are coming, so that when they check in, the documents can be waiting for them.136

It is important that every idea be looked at to see whether it creates further problems or opportunities. While the idea system itself should ultimately pick up most of these, many can be discovered more rapidly by considering the broader impact of ideas as they come in.

In chapter 2, we also discussed how small ideas can often lead to much bigger ones, if the right questions are asked. The obvious first question is “Where else can this idea be used?” If it can be used elsewhere, then the next move is to get it to those places. If employees are generally aware of the principle of replication, ideas will naturally spread inside the immediate work units to wherever they can be used, as employees learn of each other’s ideas. But an extra step in the process is often needed to move ideas outside the work unit, to other units, functions, or locations. The simpler this process, the more effective it is. There are two strategies for replicating ideas. To use an analogy from manufacturing, one is a push process, in which ideas are sent to people elsewhere in the organization who may be able to use them. The other is a pull process, which helps people to find ideas that might be useful to them. Here are some of the different approaches companies have used:

• Determine who can use the idea, and send it to that person. At Abela, the multinational catering company headquartered in the United Arab Emirates, whenever an idea comes in at one site that might be useful at others, its director is expected to write to his or her counterparts about it.
• Use the company newsletter. At Idemitsu Kosan, broadly replicable ideas are published in a special column in the monthly Kaizen newsletter.137
• Create a database of replicable ideas. Under the Adopt an IdeAA program, an American Airlines employee who found an idea in the airline’s idea database that could be used at his or her station got a reward of $50 for implementing it there.
• Give people credit for replicating ideas. At some Dana facilities, copying an idea is as good as originating one, as far as the company’s two-ideas-per-month expectation is concerned.
• Create forums to share replicable ideas. At Milliken, facility managers meet regularly, and one of the standing items on the agenda is to share replicable employee ideas.

The final aspect of leveraging ideas for additional opportunities is to make sure that people know that a single idea, or a pattern of ideas, may be piecemeal responses to a much larger issue. The power of an idea system increases exponentially with the broad-based ability to spot the larger issues that small ideas point to. Instead of nibbling away pieces of problems with ad hoc ideas, the organization gains the ability to address their root causes systematically.

CHARACTERISTIC 7: PEOPLE ARE RECOGNIZED, AND SUCCESS IS CELEBRATED

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Few people would argue against the importance of recognizing people for their ideas. But recognition can be tricky, and there is considerable controversy about the best way to do it. Hundreds of books and thousands of articles have been written on the topic, and consultants and recognition professionals abound. Nevertheless, a great many recognition schemes end up inspiring more cynicism than motivation. Recognition is so situation-and person-specific that it is hard to run controlled experiments to find out what really works and what doesn’t. Lunch with the CEO may be a real pleasure for one person but torture for someone else. Should recognition be based on extrinsic or intrinsic motivation? Is it more effective to give it to individuals or to groups? Experts disagree.

Fortunately, when it comes to recognizing ideas, the picture is much clearer. As discussed in chapter 3, the reason people offer ideas is that they want to see them used. They feel pride in their work and enjoy contributing to the organization’s success. This means that the single most effective form of recognition for ideas is to use them. Every implemented idea shows employees that their contributions are appreciated and that they themselves matter to the organization. And when the idea is implemented, it solves the problem or takes advantage of the opportunity that prompted it in the first place.

It is also important to credit people for their ideas. At the DCM-Toyota facility near Delhi, India, for example, the only explicit form of recognition for ideas was a bright red sticker attached to a place where each idea applied. The sticker gave the name of the person who originated the idea and a brief description of it. The offices and assembly line were festooned with them. This was a clever recognition double whammy. Not only did this remind employees that their ideas were valued, but the sheer numbers of stickers reminded them on a daily basis that ideas were a real priority for their managers.139

This is not to say that additional forms of recognition cannot add something. They can make the idea process more lively, fun, and interesting, and reiterate the organization’s gratitude for each idea. This is why some companies give small gifts to people, such as T-shirts, pens, mugs, or key chains. The purpose is not to reward them but to thank them.

Other companies create opportunities to celebrate ideas. Wainwright has a weekly bagel breakfast for its suggesters. Every employee who has given in an idea during the previous week is invited and is given a ticket for a drawing with a $50 cash prize. He or she is also entered into a monthly lottery with a $250 prize and a quarterly one with a $1,000 prize. Similarly, Dana Hopkinsville holds a lottery at its monthly employee meeting, but the prizes are a little different. The winners come up on stage and spin a prize wheel—with prizes ranging from sweatshirts to preferred parking places and even paid days off. The nice thing about a lottery is that it is easy to administer, generates a lot of excitement for relatively little cost, and everyone who submits an idea participates in it.

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The more personal and sincere the recognition, the more it reminds people that they are an important part of the team and that their contributions are valued. Winnebago Industries’ Friday morning gatherings (described in chapter 4), in which CEO Bruce Hertzke listens to ideas and thanks the employees involved for them, is a good example of this approach. Because he started out at Winnebago working on the assembly lines and clearly respects front-line employees, they value his praise and attention. The same approach might not work for another CEO—especially one who lacks the same bond with his or her people. Every leader must find an approach that matches his or her situation and personality. DUBAL CEO John Boardman has designed a recognition process that fits his style. Recall that every year, his company has an annual celebration in which many employees are recognized for their involvement in the idea system. Boardman leads the team of general managers that selects the overall best ideas of the year. It visits the workplaces of nominees from some twenty departments, listens to a presentation about each idea, and sees it in operation. The personal attention that senior managers give to large numbers of employees and their supervisors during this evaluation process is a solid recognition mechanism in its own right.

Personal recognition does not have to come only from the top. Recognition from peers and immediate supervisors is just as powerful and helps build camaraderie. It, too, can be designed into the process. Boardroom’s approach—that is, the discussion of ideas at team or department meetings—provides constant reinforcement of this kind, in that it involves peers and supervisors in appreciating, evaluating, building on, and implementing ideas.

DUBAL has an interesting way to involve supervisors in the idea process. Employees give their ideas directly to their supervisors, who are allowed to give rewards up to the equivalent of about $25. To get a larger amount for an idea, the supervisor must champion it at a weekly meeting of all supervisors. This committee can approve rewards up to $125 or so. (Note that the “rewards” are kept low enough so as not to create any of the dysfunction described in chapter 3.) This process serves two purposes. First, when a supervisor publicly advocates an employee’s idea, it is a potent form of recognition. Second, it brings the more significant ideas to the attention of all supervisors, who might be able to use some of them in their own departments.141

CHARACTERISTIC 8: IDEA SYSTEM PERFORMANCE IS MEASURED, REVIEWED, AND IMPROVED

As with any core processes, managers must be able to monitor the performance of their idea system and continually identify opportunities to improve it. The metrics necessary to do this at a basic level track three things: the quantity of ideas, where they come from, and the speed at which they are processed.

Quantity metrics measure the average number of ideas per employee over a given time period, whether a week, month, quarter, or year. This number is the primary indicator of how well the company is managing ideas and, since it is the most common statistic kept by companies, provides an easy benchmark to compare performance and to guide overall improvement efforts. Tracking a quantity measure over time also helps an organization develop a deeper understanding of the causes of the ebbs and flows in idea activity. These may arise because of seasonalities in business activity or may be driven by specific events. For example, many companies experience a spike in the number of ideas immediately after major change takes place—such as a new product or service launch, a reengineering initiative, a restructuring, or the installation of a new computer system. Knowing the causes of increases and declines in the number of ideas allows managers to do better at allocating the necessary resources to handle them.142

Frequent charting of quantity metrics also acts as an excellent early warning system. Unexpected jumps or drops in idea activity usually have a cause. When ideas dry up, something may be causing morale problems or otherwise deterring employee involvement. Whatever the reason, it needs to be investigated and responded to quickly.

Source metrics measure where ideas are coming from. The most common of these metrics is the participation rate—that is, the percentage of people in a given unit, or the company as a whole, who give in ideas during a particular time period, typically a quarter or a year. This metric identifies gaps in deployment or coverage of the system. In 2000, we conducted research in a well-known Swedish company that, based on a high average number of ideas per employee, had been recognized for having one of the best suggestion systems in the country. Interestingly, 85 percent of the ideas in this six hundred-person company came from only three employees, who all reported to the same supervisor. In other words, while the quantity metrics (the criteria used in the national rankings) may have looked good for this idea system, it was hardly an example for the rest of the country to emulate. Had the company tracked participation by department, it would have identified the problem, and instead of looking at the idea system with pride, top management might have asked the question it should have been asking: What was that one supervisor doing that the others were not?143

Data on where ideas are coming from allow an organization to discover all kinds of important facts about its system. In the mid-1990s, for example, an internal study at American Airlines revealed that more than half of the cost savings from ideas came from the 11 percent of them submitted by two or more people. The reason, it turned out, was that team ideas tended to tackle more substantial issues and to be better worked out. Immediately, management initiated efforts to encourage more team ideas. As we mentioned in chapter 2, without source data, Swedish companies might never have discovered an unwitting bias in the national labor contracts’ rules governing idea systems that was causing women to give in suggestions at only 10 percent of the rate of men.

Velocity metrics track a company’s responsiveness to ideas. How long does it take to make decisions about them? How fast are people getting feedback about their suggestions? How quickly are ideas implemented? As discussed earlier, responsiveness is important for getting people to participate. Moreover, the faster a company evaluates and implements ideas, the sooner it will reap the benefits, and the lower its processing costs will be. Speed does not come from allocating massive resources to evaluation and implementation. It comes from an efficient process. Milliken would find it impossible to maintain its 24/72 response rule with a poor process. By tracking the time it takes ideas to move through each stage of the process, bottlenecks are quickly identified and targeted for improvement or elimination.

With just a handful of metrics, managers can have a good sense of how their idea system is operating, and where it can be improved.

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KEY POINTS

An effective idea process has eight key characteristics:

• Ideas are encouraged and welcomed. The best way to encourage ideas is to be responsive to them. The challenge in the beginning is to get employees to believe managers truly want their ideas.
• Submitting ideas is simple. Many processes are geared for the biggest and most complex ideas that might come along. An efficient process targets small ideas and treats the bigger proposals as exceptions.
• Evaluation of ideas is quick and effective. Pushing decision making down to the front lines for as many ideas as possible leads to better decisions, faster implementation, and lower processing costs, and frees up managers’ time.
• Feedback is timely, constructive, and informative. This keeps employees engaged in the process, demonstrates that their ideas are taken seriously, and promotes learning. If the idea was rejected or misunderstood, feedback allows people to find ways to improve it or to communicate it better.145
• Implementation is rapid and smooth. Quick implementation results in more ideas and faster realization of their benefits. To handle large numbers of small ideas efficiently, an organization has to provide resources that can be easily tapped by front-line employees.
• Ideas are reviewed for additional potential. The power of an idea system increases exponentially with the ability to spot the larger issues that small ideas point to. Instead of nibbling away at problems, the organization can now systematically address their root causes.
• People are recognized, and success is celebrated. The most effective form of recognition for ideas is to implement them rapidly and to give credit to the employees involved.
• Idea system performance is measured, reviewed, and improved.

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GUERRILLA TACTICS

Five actions you can take today (without the boss’s permission)

1. Give extra attention to that first idea. When someone steps forward with his or her first idea, treat it with extra care. If the idea cannot be immediately implemented, explain why, or work with that person to overcome its limitations.
2. Make a personal commitment. What personal commitment can you make that will send a message to your employees that you will take their ideas seriously? Can you commit to a rapid response? Do not make a commitment that you cannot keep.
3. Help people with their ideas. When employees come to you with ideas that need some work to develop, help them to get the information or assistance they require. Build a network of people and resources in your organization that you and your employees can tap for help in this regard.
4. Pass it along. If a good idea pops up in your department that could also be used elsewhere, pass it along to the appropriate people. Conversely, look for good ideas elsewhere in your organization that you can bring back to your department.147
5. Don’t be stymied by bottlenecks in implementation. If your group is short of resources or skills to implement ideas in a particular area, look for creative solutions to the problem. Call in retirees on a temporary basis, recruit outside vendors, or offer your own people overtime. Do you have any assets you can redeploy or swap? Perhaps you can trade some of your people’s time and skills to another department in return for the specialized skills you need.