Small Ideas Key To Big-Company Growth

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The New York Sun

It’s time to hear from the little people: That’s not a line from an Irish movie, but rather the gist of a presentation made by Alan Robinson at a recent forum on innovation.

Mr. Robinson addressed a group of executives, convened by the Fashion Institute of Technology, in New York on what separates the best-managed and most creative companies in the world from the also-rans.

Mr. Robinson is in a good position to know. In his career, he has consulted with more than 100 of the world’s top companies, including Volkswagen, UBS, Toyota, Bose, the Washington Post, and organizations such as Blue Shield of California and the Federal Reserve Bank. He has co-authored (with Dean Schroeder) award-winning books such as “Corporate Creativity” and “Ideas Are Free.” He is currently on the faculty of the Isenberg School of Management at the University of Massachusetts.

Mr. Robinson’s message is of great importance for two reasons. First, American companies in many sectors are struggling to remain competitive. They need all the help they can get in unlocking the creative juices of their employees.

Second, it appears to be true. In writing their most recent book, Messrs. Robinson and Schroeder analyzed the performance of more than 300 companies in 17 countries. Their findings might surprise you.

Mr. Robinson quotes management guru Peter Drucker as highlighting innovation as “the one core competency that matters.” Yet, according to Mr. Robinson, most organizations do a very poor job of managing innovation. Few corporate leaders respect the discipline of innovation management, and fewer yet educate their troops on the subject.

Instead, management tends to be caught up in top-down cost-cutting and efficiency moves driven by programs such as Six Sigma. This approach, first developed at Motorola and then made famous at GE, was designed to cut down on production problems and streamline operations. According to Mr. Robinson, Six Sigma can’t hold a candle to a top-drawer “idea system.”

He cites his work with Coca-Cola’s most productive bottling company, which happens to be in Sweden. In analyzing the plant, Mr. Robinson found that 17% of the techniques that led to the facility’s efficiency had come through a Six Sigma program, while 83% had derived from the company’s highly nourished idea system.

The results were not surprising. Studies have shown that 80% of the ideas needed to move a company forward will come from the very bottom of the organization. It’s all about the little people, or, really, those employees on the front line that engage daily with customers and suppliers. These folks can be counted on to most reliably diagnose problems and offer solutions that in some cases can save a company millions of dollars.

Mr. Robinson relates the case of the Dana Corporation, a large manufacturing firm in the Midwest. An investigation into the source of the company’s innovative ideas disclosed that 800 constructive suggestions in one year had come from the receptionist. How could that be? The receptionist explained: “People call in with complaints and yell at me. I ask them, ‘What would you do about it?'”

In order to harness the power of employees, companies must establish a culture of ideas. One of the most successful of these efforts has been responsible for the extraordinary success of newsletter publisher Boardroom Inc., which boasts revenue per employee five times that of the average Fortune 500 firm.

The founder and head of Boardroom, Marty Edelston, has established an “I-Power” program. Each week he requires employees to put forth two ideas that could boost the performance of his business unit. Employees who do not proffer suggestions lose their eligibility for a quarterly bonus. (Interestingly, no employees fail to meet this request.) He has established a culture of respecting and rewarding the ideas of all employees, not just his top executives.

Of course, in addition to extracting ideas from employees, management also needs to implement a good number of them. Mr. Robinson says that if implementation runs below 80%, something is wrong.

A company that shines on this front is Milliken, an American textile company, which, as Mr. Robinson points out, is an oxymoron. “Here’s a company that shouldn’t be able to compete. That has to outperform its internationally based competitors by a factor of 20.” How does it do it? By taking advantage of an especially rich employee idea stream. Not only does the company encourage the development of ideas, it acknowledges suggestions within 24 hours and addresses them within 72 hours, according to Mr. Robinson. On average, it implements 115 ideas for each employee a year.

This achievement compares favorably with the experience at another Fortune 500 company, which had a 10-year backlog of employee suggestions that had gone unaddressed.

It is not just American companies that have embraced their employee suggestions. Mr. Robinson points out that Toyota, arguably one of the most impressive organizations in the world, has as one of its seven guiding principles “Foster a corporate culture that enhances individual creativity.”

So, how does a company set about to extract its employees’ best ideas? First, Mr. Robinson suggests going after small ideas. He says companies “will find it impossible to improve beyond a certain point without getting the little things right … Small ideas are the best source of big ideas.”

Although many such suggestions might seem inconsequential, Mr. Robinson says “you need big ideas to stay in the game, but small ideas will put you ahead.”

Next, companies need to put in place idea cultures. He does not mean suggestion boxes. “When I see a suggestion box, I know the company is dead,” he says. Rather, they have to implement systems that make idea generation part of everyone’s job. The systems should include processes for documenting ideas and then tracking them. Supervisors must be evaluated on their ability to solicit and implement ideas.

The reward for putting such a system in place is “a better world for managers” Mr. Robinson says. “The workplace is more natural, there’s less stress and so on. The biggest fear I see is the thought that ‘we’re going to get a lot of bad ideas.’ One important principle is — there’s no such thing as a bad idea.”

peek10021@aol.com


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