How to get ideas from your front-line people

HOW TO GET IDEAS FROM YOUR FRONT-LINE PEOPLE Dr. Alan G. Robinson Isenberg School of Management University of Massachusetts Amherst, MA 01003 Email: agr@som.umass.edu Tel: (413) 545-5640 University of Toledo February 3, 2009 ©Alan Robinson, 2009 1

THE PROBLEM Front-line workers see a great many problems and opportunities that their managers don’t. Today, most managers either don’t realize the full power of employee ideas or have never learned how to tap them effectively. To be truly excellent, lean, innovative or good at execution, you have to be able to capture and implement large numbers of employee ideas. ©Alan Robinson, 2009 2

THE TIP OF THE ICEBERG Black Belt €1.5 Million Green Belt Project €1 Million in Savings Idea System €8 Million in Savings ©Alan Robinson, 2009 3

EXAMPLES OF GOOD IDEA SYSTEMS Boardroom Inc. 104 ideas per person per year Wainwright Industries 87 ideas per person per year 90 percent implemented Clarion Hotels – Sweden 50 ideas per employee per year Autoliv 123 ideas per employee per year Milliken Corporation 115 ideas per employee per year Toyota ©Alan Robinson, 2009 100 ideas per employee per 4 year

WHY IS CREATIVITY IMPORTANT? The greatest source of competitive advantage is not really cost or quality, but creativity. John Micklethwait and Adrian Wooldridge Business editors of the Economist ©Alan Robinson, 2009 5

YOUR GOAL Learn how to set up and run a good idea system, to enable your employees to act all on the problems and opportunities they see. Goal: 12 implemented ideas per employee per year by end of first year. ©Alan Robinson, 2009 6

HOW TO RUN A GOOD IDEA SYSTEM ©Alan Robinson, 2009 7

POINT 1: GO AFTER SMALL IDEAS • It is impossible to improve performance past a certain point without getting the little things right. • Small ideas are much easier to implement than big ideas: • Much less resistance • Easier to do • Lower risk • Better for learning • If you could choose between 1 big idea and 10 small ideas to do the same thing, which would you choose? • Unlike major innovations, most small ideas stay proprietary and create sustainable competitive advantage. ©Alan Robinson, 2009 8

POINT 1: SMALL IDEAS (Continued) • Small ideas are the best source of big ideas. If you don’t go after small ideas, you won’t get many big ones either: x What other ideas does this one suggest? x Where else might this idea be used? x Are there any patterns in the ideas that have come in? ©Alan Robinson, 2009 9

BEFORE PRESENTING POINT 2: LET’S THINK ABOUT... What Makes Employees Step Forward With Ideas? Team exercise. Think about: ² Ideas that you yourself have stepped forward with; ² Ideas that someone you know has stepped forward with. What made you, or the people involved, step forward? ©Alan Robinson, 2009 10

POINT 2: STAY AWAY FROM TRYING TO REWARD INDIVIDUAL IDEAS Quantity & quality of ideas Money paid for individual ideas ©Alan Robinson, 2009 11

THE MOST POPULAR REWARD SCHEME DOESN’T WORK • Quantifying the effects of ideas is time-consuming and non- value-adding work. It creates unnecessary bureaucracy. • Rewards cause employees to focus on obvious cost-saving ideas. It is difficult or impossible to quantify the effect of most ideas. Easily quantifiable ideas g • Plus many more problems... ©Alan Robinson, 2009 12

POINT 3: MAKE IDEAS PART OF EVERYONE’S JOB • Document ideas and track them. • Require or expect ideas from your front-line employees: Evaluate them on the quantity and quality of their ideas. • Teach your supervisors the value of ideas and their own four roles: encouraging, mentoring, championing and looking for larger implications of ideas. Evaluate them on how well they promote ideas. • Important principle: There is no such thing as a bad idea. ©Alan Robinson, 2009 13

POINT 5: FOCUS YOUR PEOPLE ON THE KINDS OF IDEAS YOU NEED • Translate strategic goals into front-line goals that your people can affect with their ideas, and that give them fresh perspective on their work. • Be process-oriented rather than results-oriented. • Beware of heavy-handed CBA – you will drastically limit the quantity and quality of ideas that come in. ©Alan Robinson, 2009 17

SOME THINGS TO KNOW • How to set up and lead a good idea system • How to get managers and employees truly involved in the idea process • What a good idea process looks like • How to help your people come up with more and better ideas • How your idea process integrates with other improvement methods, such as Six Sigma and Kaizen Blitzes • How to navigate the issue of rewards • How to focus your people on the kinds of ideas you need © Alan G. Robinson, 2009 18

HOW FAR CAN CBA SEE? Benefits Costs Aspects easy Aspects hard Non-quantifiable Unknown aspects to quantify to quantify aspects

How to get ideas from your front-line people

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