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March 10, 2009

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Fostering new ideas goes beyond hanging a suggestion box on the wall. In fact, says consultant Jim Collison, what employees are likely to drop into such a box are "orange peelings, paper clips, gum wrappers, scribbled complaints, and dead mice."

Collison, who is also president of Employers of America, based in Mason City, Iowa, explains why good business ideas are so rarely found in boxes: "That traditional method is part of what I call a closed workplace environment. The box itself is closed. Ideas are submitted anonymously, the review process isn't visible to employees, and even if an idea is implemented, the person who suggested it isn't likely to be involved."

Make it up close and personal

The reason suggestion boxes persist, Collison believes, is that they're easy for managers to deal with. In a traditional workplace, managers want to retain control over nearly all functions and operations, and boxes don't interfere with that control.

But it takes a very different company culture to nurture good ideas effectively-a culture in which managers cede most of their control. Ideas are submitted in person, usually to the suggester's immediate supervisor, who can review them on the spot and make a decision. Some of the best ideas have to do with what individual employees know best-their own work and their own daily responsibilities.

As Collison describes it, many employees have a 25-square-foot sphere of influence-the space in which they do their work each day. Knowing this space and the work as well as they do, they are in the best position to suggest changes that will help them perform more efficiently. In a hierarchical and authoritarian work environment, they will do their jobs as they've been instructed to do them and avoid asking "why" or suggesting faster or easier methods. That is, they will act according to habit rather than choice. But in an open environment, they are free to offer better ways, have their suggestions approved, and put them into action.

Such small-scope changes are especially important in manufacturing firms and other businesses that involve lots of repetitious tasks. Collison offers a number of examples:

  • Following an employee's suggestion, a hospital begins distributing printed material instead of conducting annual classroom training in safety and health procedures. The goal of training by either method is for employees to complete a post-test accurately, so using printed data saves $24,000 each year with no reduction in quality.
  • In a business that loads and ships liquid chemicals, a mechanic suggests adding dry ice to transport hoses, to prevent chemical residues from accumulating and hardening. His idea saves his company $250,000 a year in hose cleaning.
  • A production-line worker adapts parts of what her plant already makes to create a successful new product.
  • A printing company staffer invents a machine that repositions magazines coming off the press so they can be addressed in conformance with new U.S. Postal Service requirements.

Broaden the sphere of influence

Let's say your organization has very few repetitive tasks; perhaps your business is marketing, professional services, software design, or some other "knowledge" work. In that atmosphere, it will be more difficult for employees to suggest improvements to affect only their own jobs. How can the direct, fast-feedback approach to new ideas apply to these kinds of operations? Collison feels they are not as different as they might appear to be.

First, he suggests, add just one additional step to the process. Hence, the employee with an idea presents it to his or her immediate supervisor. Instead of voting yay or nay on the spot, the boss helps the staffer put together a small team of representatives from the functions involved in the idea. The team is then empowered to conduct further research and to decide whether the idea is a go. The sense of directness and speedy feedback has been maintained.

Or, in a small organization, it may be possible for a staffer with a new idea to take it straight to the CEO or the department head who can make a decision. In Collison's own organization, for example, an employee suggested to him that money was wasted in providing customers with postage-paid reply envelopes for subscription renewals. Renewals most often arrive by check in a window envelope from the subscriber's accounts payable group, Collison's staffer pointed out. So the postage-paid envelopes were usually used for cancellations. Why encourage those?

But suppose, instead, that you want to generate ideas throughout your workforce continually. This has been termed a continuous improvement program, but call it "All Ideas All the Time." You want to discard the limitations you see in the kinds of ideas already discussed here-that they must lend themselves to in-person presentation to a decision maker. You want to encourage a production-line employee to suggest a new marketing program or the chief financial officer to devise a new way of making widgets. Such all-encompassing programs are possible, Collison believes, even in very large companies. But you need to focus and structure employees' involvement. Without some limits, generating new ideas is an overwhelming task: No one knows where to start.

Mix your own structure

One way to get started is to focus on only one business problem at a time. Managers may be wrestling with a particular current situation, such as lagging sales in a product line, price-cutting by competitors, or a shortage of a key material or ingredient. Make that problem the theme of an employee involvement program, requesting that all new ideas address that issue. Change the focus to a different problem as often as necessary, perhaps three or four times a year.

The same method can work through focusing on specific company functions rather than problems-marketing, production, finance, and so on. The advantage of this approach is that it provides the opportunity to educate employees around the company about the workings of each major department. With either a business problem or a functional structure, it's important to share virtually all information with all employees-a strategy that Collison refers to as "open-book management." Again, the key is for top management to cede control, trading the orderliness and predictability of authority and hierarchy for the potential value of the ideas generated by creative employees.

Collison describes another variation on the focus/structure theme: A financial institution buys for each of a large group of employees a subscription to a publication that has nothing to do with his or her job or the company's business. Each month, each employee is asked to submit an idea about financial services from the publication he or she reads-that is, find an interesting non-banking concept and apply it to banking. Of such unexpected relationships is creativity born.

If you want their ideas, make it worth their while

Sure, it's easy enough to say to each new employee, "We hired you for your brain, and we expect you to use it." In other words, you can try depending on employees to generate new ideas at the same time they're taking care of the business of their particular jobs and responsibilities. But unless you reward them properly-give them incentives and motivate them-they may not contribute much beyond their jobs. What's the proper way to reward them? You may be tempted to feel that money commensurate with the value of their suggestions is necessary. For example, the mechanic who suggested adding dry ice to transport hoses saved his company $250,000 each year; wouldn't 1 percent, or $2,500, be the right reward for that? Collison suggests not. The danger is that unless an idea can generate huge revenue or save spectacularly on expenses, an employee won't bother to suggest it. But 20 or 30 ideas each year that have small to moderate impact add up to big bucks, so you want more ideas rather than fewer.

Think of rewards and incentives as operating on two levels. First, you want to encourage as many employees as possible to participate in the involvement program, so it's wise to reward people simply for contributing an idea. For example: Set a companywide goal of a certain number of suggestions for each month or quarter. If the goal is achieved, treat all employees to a day of free merchandise from vending machines, or a bagel breakfast or pizza lunch. The second rewards level is to individual employees whose suggestions are approved and implemented. Collison has found that the bigger your cash awards to the suggesters, the more likely it is that employees will suggest wild or useless ideas-as long as they're big ones. Saying, "You get what you reward," he recommends small amounts of cash to individual suggesters, combined with huge amounts of recognition throughout the workplace. At both rewards levels, small and frequent incentives, along with short-term and attainable goals, work best.

So involve and empower your employees, and revolutionize your company-or at least give it continual doses of improvement. Your workforce can be a gold mine of ideas.

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This article reprinted with permission by the publisher Business and Legal Reports, Copyright 2001, BLR.

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Filed Under: Workplace Issues

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