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Why Idea Management Programs Fail- The 7 Worst Mistakes in Innovation
Employee suggestion schemes can be a powerful engine for new product growth, for cost savings and for improvements in all areas of the company. So why do all companies not do it? Why do so many ideas initiatives fail?...
Written for Innovbook by Paul Sloane of Destination Innovation (http://www.destination-
Employee suggestion schemes can be a powerful engine for new product growth, for cost savings and for improvements in all areas of the company. Your staff can see all sorts of ways that things could be made better for the customer and the company. They have plenty of ideas for process improvements, produce enhancements and thrifty savings. So why not put all that creativity to work? Many companies have highly effective ideas schemes that generate huge savings every year. Toyota get around 2 million suggestions a year from their 300,000 workers and the large majority of ideas are implemented. So why do all companies not do it? Why do so many ideas initiatives fail? Here are the most egregious mistakes that companies make:
1. No Clear Goals. If you just ask for ideas you will get a lot of "Wouldn't it be nice to have a summer picnic" type suggestions. You have to clearly articulate would a good idea looks like e.g. it will increase customer satisfaction, reduce process times or save costs. Be specific about what you want and people will respond.
2. Too few Evaluators. If you under-resource the evaluation side of the process then people have to wait a long time for a response to their suggestion and this kills motivation. One successful company makes every line manager an initial idea evaluator and they have to respond to a new idea they receive within 4 working days.
3. Complicated Approval Processes. A common mistake is to set up an idea committee which meets once a month and reviews all suggestions. They argue over a few ideas and never get through the backlog. A handful of proposals get sent on to department heads where they wait in an in-tray for weeks. You need a much slicker approach with individual evaluators empowered to make fast decisions – especially on smaller value suggestions.
4. No Commitment from the Executive Team. The leaders have to show their commitment to the scheme by backing it with resources – money and people. It is important that the best ideas are implemented and their success broadcast across the company. People believe actions not words and they need to see ideas turning into real innovations.
5. Too much Emphasis on ROI and Reward. Some schemes offer big financial rewards for big ideas but this is not necessary and may be harmful. A long financial examination is made of the idea and the total first year savings are estimated. Eventually some lucky initiator may get a big reward but this can upset the people around him who contributed to the initial idea. Recognition and fast response are better than big reward and slow response. Many companies give a small award to any idea that gets initial approval whether it reaches final implementation or not. The really big successful ideas lead to recognition for the originator with enrollment in the ‘innovators club’ and lunch with the CEO.
6. No Campaigns. Many schemes start with a fanfare of publicity, a burst of initial ideas and then they lose momentum and energy. The best way to overcome this problem is with a rolling set of campaigns through the year. One month you ask for ideas for recruiting staff. The next you ask for cost savings; the next for ways to delight customers and so on. Each campaign is supported with posters and messages emphasizing the importance of the request for ideas.
7. Trying to Do it Yourself. There are many great software packages to help with idea collection and evaluation. There are also self-help groups around the world where you can get help and advice from companies large and small, public and private, who are running suggestions scheme. Try IdeasWorldWide.Net (http://ideasworldwide.net/
An Energy company in the UK received a suggestion from an employee that all the printers should be set to print double sided not single sided. The idea was implemented and saved $400,000 in the first year. A telecoms company received a suggestion that it should auction off its old and redundant stock to staff. It did this with an internal auction that raised $100,000 but it led to savings in storage and insurance costs of over $1m in the next three years.
If you avoid the mistakes listed above and get some help from those who do it well then there is every reason for your suggestions scheme to yield big results for your business.
Allow Innovbook (http://www.innovbook.com/