For Bright Ideas, Ask the Staff
Companies, Striving to Cut Costs and Encourage Innovation, Seek Suggestions From Rank and File
Companies are moving beyond the suggestion box.
In an effort to cut costs and create new products and services, firms are seeking ideas from their own employees on everything from money-saving strategies to product design. To encourage participation, some are holding contests, voting and setting up “ideas kiosks.”
It’s often the employees—rather than outside consultants—who know a company’s products and processes best. According to management experts, many of the most innovative companies tend to solicit ideas from staff throughout the organization, not just the executive ranks.
But it’s often hard for rank and file workers to be heard: Research has found that the average U.S. employee’s ideas, big or small, are implemented only once every six years, says Alan G. Robinson, a professor at the Isenberg School of Management at the University of Massachusetts, Amherst.
Now though, more companies are realizing the value of their workers’ input. Spurring the process are so-called innovation-management programs such as BrainBank Inc., InnoCentive Inc. and Spigit Inc., which help companies set up online idea-submissions systems in which employees can enter, comment and vote on ideas.
Accounting and consulting firm PricewaterhouseCoopers launched an idea-management website called iPlace two years ago as a way to gather employee ideas that could help cut costs, improve customer service and increase revenues, says Mitra Best, the firm’s U.S. innovation leader.
Employees post ideas, sometimes in response to company-wide “ideas challenges,” and vote and comment on their colleagues’ submissions. The firm promises that a team of senior managers will review an idea within 30 days of its submission and notify the employee of its status.
About 60% of the firm’s 32,000 U.S. employees have either submitted, commented or voted on ideas, says Ms. Best. Of the more than 3,300 new ideas submitted—which range from mobile apps for expense reports to changing printer defaults to print double-sided—140 have been implemented.
Ms. Best says the firm doesn’t directly measure cost-savings from the ideas program, but that some suggestions, such as one that changed the way the firm collects employee expense receipts, have saved “hundreds of thousands” of dollars.
IdeasAmerica, an association for “suggestion administrators,” who manage suggestion submissions, surveyed 31 of its 125 members last year. The study found that submitted ideas saved respondents more than $110 million dollars in time, materials, labor or energy, an average of $1,256 per suggestion.
At Bruce Power LP, a nuclear energy company in Ontario, Canada, employees can submit ideas through 10 special-purpose kiosks throughout the plant dedicated to collecting employee ideas.
They look like ATMs, says Chief Executive Duncan Hawthorne. The company implemented the kiosks several years ago so that the plant’s workers, many of whom aren’t deskbound, could have an accessible way to submit proposals.
Employees vote on submissions. “It’s like the American Idol of ideas,” says Mr. Hawthorne.
Ideas submitted have ranged widely from improving efficiency by increasing stocks of tools to creating a dedicated facility for forklift maintenance.
Some 11,000 ideas have been submitted in three years among the firm’s roughly 7,500 employees and contractors, generating “millions” of dollars in cost-savings, says Mr. Hawthorne.
Some companies pay financial rewards for ideas (typically as a percentage of cost savings, which can be tough to measure) but Dr. Robinson says that isn’t usually an effective tactic for drawing submissions on a continuing basis. What drives most people to submit ideas is a real desire to make their work easier and cut through hassles, rather than monetary rewards, he says.
At Troyer Foods Inc., a Goshen, Ind., wholesale food distributor with about 280 employees, workers who submit ideas to an online system launched last spring receive points they can redeem for merchandise and other perks, such as designated parking spaces.
Becky Ball-Miller, Troyer’s CEO, says the company wants submitting ideas to be so ingrained that it becomes “part of the job expectation and part of the performance review.”
Ideas that have been implemented include adding another refrigerator to the break room and designating a section of the parking lot as “cars only” so large pickup trucks don’t block spaces; there have also been cost-saving suggestions encouraging the company to reexamine some pricey vendor contracts.
Great ideas can also come from unexpected places. When insurer Allstate Corp. held an online idea challenge to design a mobile app for its insurance products, one winning idea came from one of the firm’s Buffalo-based trial attorneys.
“I can guarantee you his boss didn’t ask him, ‘got any mobile ideas?’ ” says Matt Manzella, Allstate’s director of technology innovation.