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Asking your staff for ideas for improvement can boost your company's bottom line. (Dean Mitchell/Thinkstock)
Asking your staff for ideas for improvement can boost your company's bottom line. (Dean Mitchell/Thinkstock)

Monday Morning Manager

Your employees’ ideas will boost profits Add to ...

Connecticut-based consultant Brian Klapper believes ideas are the lifeblood of an organization. Unfortunately, too many companies are incompetent when it comes to soliciting and implementing ideas from the best source: their own employees.

“There is a treasure trove of ideas available to you. But you don’t use it,” he said in an interview.

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To hammer that notion home, he talks of Collective Organizational IQ – the total when you add up the IQ of everyone in the organization. In his meetings with senior executives or at workshops Mr. Klapper will ask provocatively what percentage of that IQ is actually used to understand the market and make decisions. “I’ll usually hear 5 per cent, or 10 per cent, or 15 per cent. I never hear 50 per cent or 70 per cent, as you would have to fundamentally change the way the organization operates,” he said.

Front-line employees are adjusting organizational practices to the needs of customers every day – he calls it “protecting the customers from the employees.” But top executives often don’t know about these workarounds, so they can’t make the decisions that might capture the profitability inherent in the advances.

At the same time, Mr. Klapper doesn’t recommend putting out a suggestion box and sifting through the resulting missives for gems. He said well-promoted boxes draw too many suggestions, often ideas that are irrelevant or redundant. They also lack transparency and recognition, so employees don’t always know what happens to their ideas and they aren’t properly recognized for successful ones.

He recommended a more focused approach, which he called an Idea Quest, in which broad-based suggestions are part of an activist attack on an organizational challenge by a small, dedicated group. The steps:

 

Focus employees on a specific mandate

 

The most successful systems for ideation within an organization define focused business challenges and ask employees to solve specific problems in a short period of time. An organization might invite employees to suggest how it can reduce the time required to respond to a request for proposals or how to dramatically cut overtime spending – specific issues that need immediate improvement.

 

Show you care

 

Set a good example by having management take part in contributing ideas. Encourage widespread participation and creativity by giving positive feedback and ensuring that all ideas are welcome. Make it fun.

 

Create an easy and transparent way to share ideas

 

Idea Quest participants, over a defined and reasonable time frame, can work independently or collectively to respond to the challenge. “The environment should be completely transparent to the participants so everyone can see all submitted ideas, as well as ideas that are being formulated. That way, individuals and teams can build on ideas submitted by others. As a rule, there should be no negativity that can dampen the ideation process,” Mr. Klapper wrote in his recent book The Q-Loop.

 

Require that the idea be turned into a project plan

 

Ideas are fine, but you want submitters to go further, presenting a simplified project plan. That forces them to strengthen weaker ideas by dealing with the practical aspects of implementation. You’re not after a fancy, multi-page business plan, but a clear indication of objectives, competitive advantages offered, degrees of difficulty to implement, estimated time lines, costs and revenues, size of the team needed to implement, and a risk assessment.

 

Evaluate each idea and respond immediately

 

Don’t let ideas disappear into a black hole, turning off your employees. Determine what criteria you want to assess the ideas against and use that to develop a clear evaluation grid to score them.

About five years ago Mr. Klapper oversaw an Idea Quest for Priszm, which owned and operated more than 400 KFC, Pizza Hut and Taco Bell stores in Canada. His challenge was to take a middling store and within 45 days turn it into the best-performing store in the country, offering the ultimate dining experience to customers in its class. He built a team from the Ontario store that was selected and individuals from appropriate areas of the company such as customer insights, marketing, and human resources. The dozen members were withdrawn from their other responsibilities for the period so they could focus exclusively on the quest.

Ideas were broadly solicited, including through a Model Store link on the website explaining the activity. That generated hundreds of ideas, all focused on this important objective, suggesting improvements to menus, queuing processes, signage, quality standards, and a host of other relevant issues. Ideas were turned into project plans, quick experiments held where possible to test ideas – and despite the rush, everyone got a response to their ideas, so those whose suggestions couldn’t be acted on were given an explanation why.

Forty-five days after his team started, the revamped model store went into operation and it was a huge hit. Sales grew 14.98 per cent, compared with just 4.6 per cent for similar stores; store visits jumped by 6.3 per cent compared with 0.5 per cent in the control group; and the average payment at the cash register increased by 7.8 per cent compared with 4.1 per cent in the control group.

“It shows the power of employee ideas,” Mr. Klapper said.

Special to The Globe and Mail

Harvey Schachter is a Battersea, Ont.-based writer specializing in management issues. He writes Monday Morning Manager and management book reviews for the print edition of Report on Business and an online work-life column Balance. E-mail Harvey Schachter

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