The Power of Small Ideas

Business leaders are always looking for the next breakthrough idea — the “home run” that will put them well ahead of the competition with one swing. Because of this, the systems and policies they put in place are aimed at big ideas. Few managers realize how severely limiting this is.

It is much smarter to go after the small ideas. On one hand, the bigger an idea, the more likely that competitors will discover and counter it. If it affects the company’s products and services, it is directly visible. In fact, it may well be advertised. If the idea involves a major process change behind the scenes, it is often copied even more rapidly. Significant internal initiatives usually require outside suppliers, contractors or consultants, people whose jobs are to sell their expertise and knowledge.

These same customers might well share the exciting new development with other suppliers.

Small ideas, on the other hand, are much less likely to migrate to competitors. They are often site and situation-specific, and therefore of little use outside the company anyway.

The Pitfalls of Rewards

Whenever managers start to think about how to promote ideas, the question of rewards almost always pops up. On the surface, offering rewards for ideas commensurate with their value seems a smart thing to do. The more generous the rewards, the more ideas will come in.
It is an easy conceptual trap to fall into. A great many managers have unwittingly sabotaged their efforts to promote employee ideas by making exactly the same mistake.

The problem is not in sharing the benefits of ideas with employees — this can be done very effectively — but in doing so with rewards for individual ideas based on their value. Not only do such rewards substantially increase the cost, time and effort needed to evaluate and implement
ideas, but they create a host of unanticipated problems that end up acting as disincentives for people to offer ideas.

It is ironic that so many managers have such faith in a motivational tool that actually works against them. The first set of problems has to do with calculating the value of an idea. It can be very time-consuming to quantify the effect of even the simplest idea.

People offer ideas because they want to see them used. Either they see a way to make their jobs easier or less frustrating, or they find an opportunity to improve the organization in some way. Employees also have a natural pride in their work; they like to feel valued and to know they are having an impact. Employees will willingly offer large numbers of ideas without the prospect of monetary rewards. The most important rewards they get are seeing their ideas used and
being recognized for them. This does not mean that organizations should avoid rewarding their people with substantial money for their ideas. Rewards can be given, provided they are properly
structured.

Making Ideas Everyone’s Job

Any system, no matter how well conceived, works only if people are held accountable for the roles they have to play in it. Organizations that are successful at getting ideas monitor which employees are turning them in, which managers are getting them, and how rapidly they are acted on.

Employees and managers are given appropriate training and support, and then held accountable for their roles in the idea process. Coming up with ideas is made a central part of the employees’ work.

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

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. Make it clear to everyone that each idea will be taken seriously. 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 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 by managers.

Submitting ideas is simple.

The key is to design the submission process to match the kinds of ideas that employees will come up with.
Should more information be needed, the employee can always be asked for it.

Evaluation of ideas is quick and effective.

Evaluating ideas at the lowest possible level is what underlies the astonishing speed with which some organizations can respond to them. The global fabric and specialty chemicals company Milliken, for example, has a “24/72” policy: Every idea is acknowledged within 24 hours, and a decision about it is made within 72 hours.

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.

Implementation is rapid and smooth.

To achieve rapid and efficient implementation of ideas, managers have to ensure 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.

Ideas are reviewed for additional potential.

A good idea system incorporates post-implementation processing to see whether a new idea creates further problems or opportunities. The process should involve a step that moves ideas outside the work unit, to other units, functions or locations. The simpler this process, the more effective.

People are recognized, and success is celebrated.

The most effective form of recognition for ideas is to use them and give people credit for them. 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.

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 track three things: the quantity of ideas, where they come from, and the speed at which they are processed.

CONCLUSION

Simple ideas can save time, effort and money. They can also lead to entirely new ways of doing business. Even though front-line employees see many opportunities in their daily work that managers do not, most organizations are better at suppressing employee ideas than promoting them.

As a result, huge amounts of money are wasted and customers are lost and disappointed.
Opportunities are missed and front-line employees are often powerless to act. Alan G. Robinson, an award-winning author, educator and consultant, and Dean M. Schroeder, the founder of two companies and a business professor, have written “Ideas Are Free” to show managers how to access the many ideas of their employees and turn them into competitive advantage. Through extensive research and work with more than 300 companies in dozens of industries, the authors explore the key factors that influence the quality and quantity of employee ideas. They also describe how ideas and idea management can be fully integrated into an organization’s structure and operations to create excellence and sustainable competitive advantage in every area from productivity to responsiveness, keeping costs low, quality, and service delivery.