Idea and creativity management

Idea and Creativity Management Prof. Isaac Getz ESCP-EAP European School of Management Paris-London-Berlin-Madrid-Torino getz@escp-eap.net © Isaac Getz, 2006 Idea Management 1

First example: A small idea with big benefits What is the avoided loss potential? 35 jars X 2,5 X 1000 supermarkets X 52 weeks = 4,5M € (- margins) © Isaac Getz, 2006 Idea Management 2

First question: How many useful for a company ideas does handle a world-class idea system? “40 Years, 20 Million Ideas” by Yuzo Yasuda, 1992 And more than 1 million ideas/year in the last decade: Toyota in Japan: 13 ideas/employee per year Toyota Kentucky: 21 ideas/employee per year In Boardroom, Inc. the idea system called I-Power handles: 104 ideas/employee per year Every week every employee comes up with 2 ideas: What can I do that would cause my department to improve? What can others do that would cause my department to improve? A lot of small ideas: What benefits? © Isaac Getz, 2006 Idea Management 3

A lot of small ideas in one GKN BU: strong growth excellent product quality steady increase in productivity Annual 5% increase in productivity © Isaac Getz, 2006 Idea Management 4

Example: USA, France, Customer Belgium, Service & Denmark,… Retention A lot of small ideas: Milliken France: 54 ideas/employee/year Milliken USA : 110 ideas/employee/year Study : 68 % of customers are lost due to an indifferent attitude by employees Chartered Insitute of Marketing Other benefits : Quality: EFQM, Baldrige Awards Safety : 0 accidents in 7 years © Isaac Getz, 2006 Idea Management 5

Example in : Cost reduction One idea : 9 million € in savings/year Studies : A 40-50% difference in profit margins occurred based upon whether employees are engaged or not in their job Circon Group of Chicago On the average, 29% of employees are engaged, 54% are not and 17% are actively disengaged Gallup Other benefits of • Stronger involvement • Higher profits © Isaac Getz, 2006 Idea Management 6

Some « How » questions: How many hundreds of “bureaucrats” run such a system? How huge are the rewards a company have to pay in order to motivate its employees to produce so many ideas? Can any company or organization reach so many ideas? … © Isaac Getz, 2006 Idea Management 7

How many raw ideas are needed to develop one product/service that sells ? Study: Some 80% of innovations come from people at least three levels below the top management team Dauphinais & Price, Straight from the CEO © Isaac Getz, 2006 Idea Management 9

Why the front-line employee’s spot is so unique for producing ideas for so many benefits? Because it is on the organization’s boundaries —the regions where it interacts with its clients, suppliers, partners, and competitors — where the change and problems first happen and are first felt. Getz & Robinson, De innovatiekracht van ideeën, Kluwer, 2004 Study: 83% of innovations originate with a client or a user. E. von Hippel, The sources of innovation 1 point for a patent, 10 points for articulating the idea, 100 for getting your venture funded but 1000 for landing your first customer. Kenny Tang, investor and author of Taking research to market What is the system that enables all employees to produce and act on their useful ideas? © Isaac Getz, 2006 Idea Management 10

An extremely rapid idea handling process Idea = Problem/opportunity + Solution/action plan Simple and rapid process handled by the direct supervisor – Document every idea once it is implemented or its implementation started Track every manager’s/department’s idea performance with a few key measures : – number of ideas – participation rate – implementation rate © Isaac Getz, 2006 Idea Management 11

Performance of the world-class idea systems according to the key measures • # ideas/employee • % of participation • % of implementation Milliken France 54 ideas per person per year 88 percent participation 98 percent implemented Dana Corporation 26 ideas per employee per year (including DCC) 95 percent implemented Opel Eisenach 24 ideas per employee per year 90 percent participation Toyota Kentucky 21 ideas per employee per year 99 percent implemented $4500 in cost reduction per employee/year Best practices = > 20 ideas per employee per year > 4000 of savings per employee/year Average EU Practices ± 300 > 90% of savings are wasted © Isaac Getz, 2006 Idea Management 12

Even the most sophisticated process is not enough Attention: A System for Managing Ideas is not a tool! A fool with a tool is still a fool ! What are other components of a world class organization? © Isaac Getz, 2006 Idea Management 13

Conclusion: It’s not really about freeing people ideas — It’s about freeing people talent and their action to improve business My N°1 job is helping others learn and grow. Most leaders think people ought not depend on a boss to build them up. Most of us grow up with tremendous negativity. School teachers and parents spend too much time critiquing us rather than praising us. So, by the time we get into the workforce, we are insecure and have low self-esteem. I work to convince my employees that they truly are talented and together we can do anything. Every person has an endless supply of ideas and those ideas are needed to improve the business. Marty Edelston, Boardroom, Inc. founder and CEO © Isaac Getz, 2006 Idea Management 16

Idea and creativity management

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