Why listening to employee ideas will boost growth and profits.

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Why listening to employee ideas will boost growth and profits.
San Mateo Times September 15th 1955 page 2: "Ray A.
Hammerstrom, a roller at the Pittsburgh factory of the Jones
and Laughlin Steel Corporation, had an idea worth 15,000
dollars. Events leading up to his happy dream began in the
summer of 1953 when a new 10-inch bar mill was installed at
the works.
The switch that controlled the delivery of the straight bars to
the cooling bed were not functioning. Company engineers
couldn't find a solution. Hammerstrom made some rough
sketches for a new design with no success.
That was until one afternoon when he took a cat nap. His visionary catnap revealed the solution and won him a check
for 15,000 dollars, the largest award the firm ever made to an employee for an idea."
Fact is, whatever amount Jones and Laughlin paid out to Hammerstrom, the return they received for his idea was
infinitely higher. Jones and Laughlin knew they would be paid back in spades. But, in spite of the huge benefits
implementing employee ideas, few organizations invite their input. History is replete with examples where new
products, innovations and ways to improve the organization began with an employee idea.
Consider why it makes big time sense to encourage and reward employee ideas. How can it improve workforce
engagement and product innovation? Why is listening to employee ideas a smart management practice?
Bringing in the collective wisdom for the greater good is wise because it promises to produce great ideas and
increased benefits for your entire organization.
Here are some examples and what you can do to boost your profits with employee ideas.
The philosophy of innovation and welcoming employee ideas within Honda's US divisions has brought cost savings
and new products. Honda draws members for their idea groups from sales, engineering, development and different
business units.
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General Electric Co. involves its consumers and business clients alike in new-product discussions.
Food retailer Supervalu has created teams where director-level managers discuss strategic issues suggested by
executives in the different business units. The managers discuss issues outside their own areas of expertise and work
on their leadership development at the same time.
Eisai, a Japanese pharmaceutical maker, has put together more than 400 innovation communities since 2005 to
focus on health-care-related issues such as examining possible new structures and sizes of medicines. World wide,
Eisai employees participate in at least one such project, and spends time with patients as well. Eisai's philosophy is
that by connecting in person with patients it also enhances employees' ability to see beyond pure data.
Forbes reported on how Bayer brought on Makboard. Makboard has become a big player in the snowsports market.
This creation is an affordable, “high-performing” snowboard option that also helps keep waste out of landfills. As
columnist Terry Waghorn wrote.
"It took about a year for the Bayer AG, the German-based pharmaceutical giant, to decide that a see-through
snowboard would be worth bringing to market. The snowboard was one of more than 9,000 ideas Bayer employees
have generated in the four years the company has been running a program called "Triple-i: Inspiration, Ideas,
Innovation."
Triple-i uses an intranet portal to collect ideas from employees across the company. Three of those ideas, including
the snowboard, which is named Makboard, have made it to market. Another 32 ideas are being developed and
tested.
Employee David Moss of Projet Créatif, a video game developer, wouldn't wait for the company's requirement that
ideas could only be submitted after one year of employment. Moss went ahead and compiled a creative team to
start designing Ravenmark, a mythological adventure for young boys set in fourteenth century Scotland. The team's
idea was submitted to the company.
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"Everyone was kind of confused that we were pitching a television show," Moss recalls. "But by the end of the
presentation, everyone's eyes lit up and they could see the potential." Moss and his team were given time and funds
to develop Ravenmark. With Ravenmark ready to hit the market, Moss maintains ownership of his idea and will get
part of its revenue throughout his career.
One Amoco plant in Texas promoted a suggestion plan that has saved the company over 18 million dollars in only
two years. The company recognizes and rewards the employees with the winning ideas with tangible awards and
travel in front of their peers and top brass.
A management and consulting firm in New Mexico, Garrett Resources, awards for every idea submitted on how to
save money.
Urban Bianchi a machinist, became known as the "undisputed King of the suggestion box" by the Los Angeles Times
for turning in more than 800 cost cutting ideas for Parker Hannifin Corporation in Cleveland. The company also
rewarded him with over 17,000 dollars worth of merchandize. Bianchi is quoted as saying: "It meant more to me and
my family that I could share the merchandize I was awarded than if I bought it at a store."
Grumman Corporation in Bethpage NY dramatically boosted their employee suggestion strategy by rewarding gifts
for ideas. "We needed to award something tangible, but quickly. With 26,000 employees nationwide, the old
approach to obtaining employee ideas had become ineffective." noted then head of the procurement department,
Marilyn Lage. The program proved so successful that Grumman authorized its supervisors to make rewards available
within a day if an employee's idea is implemented.
In only three months American Airlines was able to engage nearly 3,500 7person teams to come up with more than
1600 ideas that were adopted, resulting in more than $20 million in cost savings and revenue generating
improvements. Employees were rewarded with $4.7 million in merchandize prizes. More importantly the employees
wholeheartedly supported the changes because they had suggested and designed them.
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'Everyone Counts' was a very successful program at Black & Decker that set up teams to brainstorm and develop
ideas about training, communication and administration. Employees from different departments were grouped into
39 teams with evaluation committees. More than 200 ideas came in and 59 approved. One $700,000 idea dealt with
the substitution of new material in one of its product lines. Benefits included, better employee engagement,
communication and higher company profits.
Your organization's great ideas won't come mostly from outside consultant groups or suggestion laboratories. They
will come from those people who are daily at the front lines, serving your customers, exploring new markets and
battling the competition. They are your engaged employees who are ready to offer their creativity. If you encourage
them to submit their ideas you will improve sales, cut your costs and boost your profits.
HOWEVER.
The sad fact is employee engagement remains at record low levels. There isn’t much mining of worker's best
thinking going on because if there was, employee engagement scores would probably be higher. Less workers would
be considering jumping your ship in search of a better job offer.
The high costs connected to re-hiring and re-training should be food for thought. Dis-engaging employees carry their
penalites. One powerful way to engage and retain employees is by welcoming your employee ideas.
How do you set up a successful idea submitting mechanism in your organization and avoid the pitfalls?
Is your company clear and committed to your suggestion program? Do you use effective communication tools to
announce and promote everyone's involvement?
You can avoid sources of trouble such as jealousy, ill will, misunderstanding, division and cynicism by remaining the
leader, having a good plan and conducting your suggestion get togethers fairly. Recognize everyone's submissions.
Consulting with the right incentive professional will greatly help you.
Look at your corporate culture. Do you have an atmosphere that supports fresh and thoughtful ideas? Getting those
great employee ideas won't be forthcoming if you don't. Depending on your workforce environment, sometimes
more informal methods for nurturing new ideas are in order.
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If you chose to go ahead with a full blown formal suggestion program, schedule, announce and promote regular
brainstorming sessions. Use the sessions to focus on the topic or challenge you want to improve. Weekly or monthly,
generate ideas from all. You can also divide up your meetings into departments first then meet with everyone later.
Recognize all ideas no matter how "out there" they may appear at first. It doesn't mean you will implement all ideas
submitted, however you need to provide a safe, creative and welcoming environment for all. That's what you want,
to keep the ideas flowing.
Some clients have reported that their suggestion programs were not successful. Upon closer review it was clear that
ideas submitted were not acknowledged in a timely fashion. Within 48 hours is timely. If your main team only
includes top management or directors it will be seen by your workforce as out of touch.
Of course it will generally be senior management that has the power to implement the ideas. What you want to
avoid is the perception that decisions to go ahead with ideas are self-serving. Make it clear from the outset that
decisions on what ideas are implemented remain with you and management.
Your CFO or financial department must be represented on the suggestion review team. Choose the members of your
ideas team based on your corporate culture.
Remember that senior management sets the agenda with a clear statement of purpose and themes for discussion.
Make sure all participants are free to discuss ideas without concerns about hierarchy and quarterly financial results.
Dr. Guran Ekvall is a professor emeritus of industrial and organizational psychology at ULS university and head
researcher with The Creative Problem Solving Group. He is well known as an academic researcher in the area of
workforce creativity as well as leadership behavior and values that encourage creative productivity. His unique
research background as an industrial psychologist started with his extensive work in employee suggestion systems in
the early 1960's. He is widely published and has worked with a variety of international organizations.
CPSG concludes: "Brainstorming may be the best-known tool for group idea generation and is widely taught in gifted
and talented programs. Many empirical studies have been conducted regarding the effectiveness of brain-storming,
and they have provided useful insights into the salient barriers facing groups who use this tool."
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Ideas are Free "is a clear and concise prescription for turning an organization into an idea machine. ...it will inspire
any manager who believes, as I do, that only the innovative thrive!"
says Jeff Taylor, Founder and Chief Monster, Monster.com
Paul Tulenko, syndicated columnist for Scripps-Howard
"The fact is, because they're the ones doing the day-to-day work, front-line employees see a great many problems
and opportunities that their managers don't. But most organizations do very poorly at tapping into this extraordinary
potential source of revenue-enhancing and savings-generating ideas."
Employee ideas are shown time and time again to be your secret weapon in achieving overall growth and boosting
profits.
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Why listening to employee ideas will boost growth and profits.

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Why listening to employee ideas will boost growth and profits.