Does your organisation have an effective employee suggestions scheme? An increasing number of organisations in the both private and public sectors are finding that they can drive innovation and reduce cost by moving their suggestion box from the office wall to the intranet.
Siemens Automation and Drives is a good example. They employ 400 people in Congleton, Cheshire making electric motor drives. Their scheme is called Ideas Unlimited and it generates over 4000 suggestions per year of which some 3000 are implemented. The total savings are around $1.5m per year. Howard Ball administers the scheme part-time. The key is simplicity he explained when he addressed the national conference of ideasUK, a non-commercial association dedicated to employee suggestion schemes and recognition processes.
There are no forms and no paperwork. The intranet application has just four screens – entering the idea, evaluating, accepting or rejecting and implementing. Every manager acts as an evaluator. Payments are made in the form of vouchers to a value of around $80 on acceptance of the idea. They have found that small rewards and recognition on acceptance are a better incentive than larger rewards delayed until implementation.
Another interesting aspect of the Siemens scheme is that they publish league tables of ideas implemented by department with awards for the most successful departments. Managers are incentivised to accept and implement ideas.
Emma Akerman at Siemens suggested that a component be made out of galvanised steel instead of stainless steel. The idea was accepted and will save around £60,000 a year. She says, ‘The fact that you can put in suggestions on-line makes it easier, and knowing you can contribute ideas means you take more interest in your work.’
The main problem that had to be overcome was getting factory workers to use computers. They were not regular PC users so a training and help programme was put in place. Another thing to watch out for is evaluator overload – you have to give time and recognition to those who assess the suggestions. Ideas Unlimited has been a big success with thousands of employee ideas implemented each year. It is a powerhouse of innovation.
Paul Sloane
Could this be a classic case of optimistic reporting? After all, having gone to the trouble of implementing their idea management system Siemens are hardly going to want to report that the results are not what they might have hoped. In our consultancy we see this ‘happy lighting’, as we call it, many times. There are a number of flaws in the analysis (though not the post, I hasten to add). The first is that the benefits are ‘self-reported’, the second is that there is no objective test of the benefit of the ideas. For example, it should not be possible to report on a savings of £60,000 a year without identifying at the same time the cost of achieving those savings since nothing takes no time and costs no money. Most Idea Management systems that are detached from a proper accounting model are an economists nightmare and they should worry the business greatly because they are wide open to abuse.
An Idea Management system is a valuable tool but when the ideas are collected they need to be evaluated in true opportunity cost terms. Organizations are not really interested in ideas, they are interested in good commercial initiatives. Every initiative, whether it comes from the workforce or the executive, should be gathered into a single pot and the emerging initiatives are then based on objective ROI calculations.