Seven Common Mistakes in Suggestions Schemes

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

 

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.

Paul Sloane

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3D Printing – It is the Future

Picture by Mojo

Picture by Mojo

I spoke at an event for an Aerospace company recently and while I was there I saw an exhibition of some of the things they are doing with 3D printers.  They print in different plastics but also in Titanium, Aluminium and Stainless Steel.  They can print very complex designs which would be hard to machine or manufacture.  This is bad news for specialist engineering companies which supply parts or tools as these can now often be done quicker and cheaper by the 3D printer.  These devices can also make lighter components with hollow spaces.  Saving weight is very important in aircraft design.

I asked the engineer, ‘What can 3D printers not make?’  The answer was large items.  But this is just a matter of time.  It is possible to conceive of a huge printer on a gantry which makes the wings and fuselage of an airplane.  In terms of the important innovations in manufacturing the 3D printer might rank right up there with the assembly line, numerically controlled machines and the industrial robot.  It is a disruptive innovation which will produce winners and losers.  Maybe it is time to buy one for your company and start experimenting.

Paul Sloane

Out of Bad comes Good

The disappearance of Malaysia Airlines flight MH370 is a mystery and a tragedy. We have no plausible explanation yet.  However it seems possible that some useful innovations will emerge from this.  One is that all planes will be fitted with communications systems which cannot be turned off.

It appears that this disaster was caused deliberately by whoever was flying the plane.  Indeed far more airplane crashes are caused by pilot error than technical or other faults.  So perhaps this event will lead to another innovation – pilotless planes.  Automatic pilots already do most of the work so why do we we need humans in the cockpit?  The main reason is to reassure passengers.  Perhaps we need a campaign to overcome this obstacle to innovation.

We do not need drivers on shuttle trains at airports or on elevators – why do we need them on underground trains and airplanes?  A plane is more complicated but the evidence shows that in nearly all cases computer software can handle that complexity better than humans.  And if a crisis requires human intervention then the  plane can be flown from the ground by an expert pilot through telemetry. It is time to challenge the conventional approach.  Maybe some good will then come out of this calamity.

Paul Sloane

Innovation means Winners and Losers

uber2It seems that when it comes to innovation you can either ride with the change and benefit or oppose the change and be run over.   You are either the diner or the dinner.

Smith Corona made beautiful typewriters but word processors put them out of business.  Encyclopedia Britannia made excellent encyclopedias but Wikipedia killed that business.  Kodak were leaders in photographic film but consumers now prefer Instagram to prints.  Warner Brothers and EMI were destroyed by music downloads and iTunes. We continue to see that innovation leads to winners and losers.

A recent Reuters report describes how taxi drivers in Milan, Chicago and Paris are vigorously opposing the use of the Uber service – a mobile app that allows users to summon a chauffeured car.  It bypasses one of the best established of closed shops.  In places like Milan taxi permits are handed down from father to son or sold for six figure sums.  The unions want to jealously guard their privileges but history tells us that they are fighting a lost cause.  They would do better to develop their own mobile apps and try to beat Uber with a better service.

Paul Sloane

Innovators do not trust Experts

Mark Twain said, ‘It is not what we don’t know that gets us into trouble; it is what we think we know for sure.’  The things we are certain of are the most dangerous assumptions we hold.  That is why great innovators do not trust experts, or theories, or spreadsheets or models.  They trust experimentation and empirical results.

Video clip here Paul Sloane at the Like Minds Conference

A Lateral Idea – the Zero Rupee Bank Note

Zero is not Nothing

The ancient Greek and Roman civilizations did not employ zero.  If you think of the Roman numbering system 100 is represented by C and 1000 by M. The ancients did not use a symbol like 0 as either a number or a placeholder.  Indian mathematicians are credited with the first use of 0.  Arabs used it and introduced the concept along with the decimal numbering system into Europe during their occupation of Spain in the 12th century.   It is highly unlikely that the development of western mathematics, science and technology would have happened without the number zero.   The paradox is that zero is nothing and yet something absolutely crucial.

0rupeeNow India has contributed another (and related) lateral concept, the zero value banknote.  There are millions in circulation.  They look like other banknotes but have a value of zero.  Why would anyone do this?  The answer is that they act as a valuable weapon in the fight against bribery and corruption.  India unfortunately suffers a high level of corruption.  Officials at many levels in Indian government offices and other bureaucracies demand bribes for all sorts of permits and services.

A group called 5th Pillar set out to combat corruption by issuing the zero rupee notes which people give to officials who demand bribes.  The founder of 5th Pillar, Vijay Anand, describes the fake currency as ‘a non-violent weapon of non-co-operation.’  The bills, like others in India, carry a picture of Mahatma Gandhi.  They also bear contact details for 5th Pillar and a declaration, ‘I promise to neither accept nor give a bribe’.  They are given as a protest and in order to shame the official.  The zero rupee note makes a statement.  The person giving it is not just an individual complaining about a bribe; they are part of a wider movement that is fighting corruption across Indian society.  The notes are not always effective in deflecting the extortion but overall they are judged a success in the fight against corruption.  Many other countries have shown an interest in using them.

Paul Sloane

The Wrong Answer can be the Right Answer

A good way to start a brainstorm is to deliberately look for wrong answers.   Set the challenge and then ask people to think of crazy ideas which are just plain wrong.  Then take some of the more outrageous wrong ideas and kick them around.  People will be outside their comfort zone and they will approach the original challenge from a new perspective.  Each crazy notion can be provocative and stimulating.  What is more each wrong answer is itself the answer to a different question.  Sometimes these different questions are more interesting than the original challenge.  Consider these examples.

Christopher Columbus set out to answer the question, ‘Can we sail west around the world to reach India?’  He got the wrong answer but found America.

Trevor Bayliss

Trevor Bayliss

Trevor Bayliss invented the clockwork radio.  It was the wrong answer to the question, ‘How can we make a better radio for our customers?’  It was the right answer for the question, ‘How can we make an ideal radio for poor people in the developing world?’

Art Fry at 3M got the wrong answer to the question, ’ How can we make a glue that sticks better?’  He got the right answer by suggesting that his invention could be used in Post-it notes.

Pfizer Corporation had a new drug on trial with men.  It was designed to reduce blood pressure but Viagra proved to be the wrong answer for that question.  It became a remarkable success as the right answer for a different question.

In the 1970s Sony Corporation under its chairman Akio Morita had a strong position in the cassette recorder business.  They wanted to design new and better models.  They started with two wrong ideas – a cassette recorder that could not record and one that had no speakers.  Both were heretical notions for designers of cassette recorders but they resulted in the Sony Walkman.  It was a personal music player which used tiny headphones.  It could play music but not record it.  It was major innovation and a huge commercial success.

When you look for the right answer you will often come up with bland and predictable ideas.  So break with convention.  Start by looking for the wrong answer and see where that leads.

Paul Sloane

Why do Supervisors block Innovation?

Often we find in large organisations that the executive team is keen to improve innovation and at the same time, front-line staff are frustrated and keen to change things.  So why is change not happening?  Who is impeding innovation?  Middle managers get the blame.  They are seen as the blockers.  John Kotter in his book, Leading Change, identifies supervisors as one of the key obstacles to major change initiatives.  He points out that they do not actively oppose change but they offer passive resistance.  They are so busy doing their job that they don’t have time to implement someone else’s fancy idea.  They wait for the change initiative to lose momentum.  They focus on making the current systems work.

James Gardner takes a similar view in this blog Middle Management won’t Innovate.  He argues that middle managers do not innovate but this is not because they are not innovative.  They do not innovate because the systems and their objectives are inimical to innovation.  If we want to overcome this problem then two approaches spring to mind:

1.  Change the supervisors’ objectives to include innovation, initiative and risk-taking.  Give them targets for trying new approaches and include it as a measure in their appraisals.  One issue here is that these metrics are hard to measure objectively.  Another is that these guys often have too many objectives already.

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2.  Bypass the middle ground.  Empower front-line staff to try new things in their work and set up skunk works to operate under the corporate radar and develop new products and services without having to go through normal approval channels.  But provide an executive level sponsor to give them the political clout they will sometimes need.

The ideal approach is for innovation to be in everyone’s objectives and for every employee to feel somewhat of an entrepreneur making the whole organisation more agile.  However, many companies would find this culture change very hard to achieve.  So the second approach of bypassing the normal channels and empowering a smaller number of innovators is often a better way to kickstart innovation.

Paul Sloane

Eight Creative Resolutions for an Interesting New Year

Variety may be the spice of life but many people find themselves in a rut where there is little variety and no spice.  If you want a varied, challenging and innovative new year then try these resolutions:

1.  Set yourself a secret assignment at work. Pick a big challenge that is not in your current job objectives and make it your personal goal to achieve it.  Chose something that will surprise and impress you colleagues and work on it secretly (to start with).

2. Deliberately take a different point of view.  Get a different perspective on the world.  If you normally watch CNN or BBC News then watch Al Jazeera instead.  Read a newspaper at the opposite end of the political spectrum from your regular paper (e.g. the Guardian instead of the Telegraph).  Do not visit your regular bookmarked websites but try some entirely new ones.  Read more books.  If you normally read fiction then try non-fiction and vice-versa. Spend time with people who will disagree with you and challenge your views.

3.  Visit an old relative.  Who is your oldest living relative that you have not seen for at least a year?  Visit them in January.  You may not get many more chances.

4.  Meet an old friend.  Think of someone you have not seen for many years who was a good friend at school or college.  Invite them to lunch and chat about old times and what they are doing now.  Friends are important and good ones are hard to find.

5.  Change a habit at home.  If you sleep on the right side of the bed try sleeping on the left.  If your partner does the cooking and you do the cleaning then try swapping roles.  If you normally watch TV then trying listening to the radio or reading a book for a change.

6.  Change how you exercise.  If you normally cycle then try running. If you normally run then try walking.  If you normally walk then try cycling.  If you don’t exercise then start.

7.  Go somewhere different.  Plan to spend a day every month visiting somewhere you have never been before.

8.  Start writing that book that you have thought about.  Just write the first chapter. Nothing more.  Then review it and see how you feel about venturing further.

Try some of these and I guarantee that you will have a more creative, more successful and more interesting new year.

Paul Sloane

 

 

The Most Innovative Companies in the World – 2013

Since there is no way of absolutely measuring which companies are the most innovative we see different lists using different measurement methods.   Forbes publish a list based on a measure of how much investors have bid up the stock price of a company above the value of its existing business based on expectations of future innovative results. Their top ten companies are:

  1. Salesforce.com                       USA
  2. Alexion Pharma                       USA
  3. VMWare                                   USA
  4. Regeron Pharma                     USA
  5. ARM Holdings                         UK
  6. Baidu                                        China
  7. Amazon                                     USA
  8. Intuitive Surgical                      USA
  9. Rakuten                                    Japan
  10. Natura Cosmeticos                 Brazil

The full list of 100 international companies is worth perusing.  Notable entries are 20. Pernod Ricard, France, 27. Diageo UK, 30. Proctor and Gamble USA, 35. Reckitt Benckiser UK, 40. Tata India, 47. Google USA, 79 Apple USA.

Boston Consulting Group publish a list based on a survey of 1500 senior executives.  So it tends to consist of large companies with strong brand awareness.  Their top ten are:

  1. Apple
  2. Samsung
  3. Google
  4. Microsoft
  5. Toyota
  6. IBM
  7. Amazon
  8. Ford
  9. BMW
  10. General Electric

The magazine Fast Company publishes a list of the 100 most innovative companies based on their perception of ‘businesses whose innovations are having the greatest impacts across their industries and our culture as a whole’.  So they include many smaller high-tech companies.  Their top ten is:

  1. Nike
  2. Amazon
  3. Square
  4. Splunk
  5. Fab
  6. Uber
  7. Sproxil
  8. Pinterest
  9. Safaricom
  10. Target

There is a wide divergence between the lists reflecting their different approaches.  The only company which appears on all three top tens is Amazon so maybe they deserve the title of the most innovative company of 2013.

Paul Sloane