Turn Your Organization into an Idea Factory: Part I- Valutrics
Up to 80 percent of an organization’s improvement potential could come from frontline employee ideas. However, the average employee suggestion box or idea program gets less than 10 percent adoption, has fewer than .5 ideas per employee per year and can hurt employee engagement. High performing employee idea management programs, on the other hand, have over 50 percent adoption, many ideas per employee, and make a significant contribution to the bottom line. Even more, it results in increased productivity and employee engagement.
To capitalize on this potential, we pulled together the findings from over 20 academic research papers on suggestion systems and idea programs. Our biggest finding is that organizations need to shift their paradigm from the old suggestion box system to that of a modern idea and innovation management program. By managing it as an overall program and thinking through key factors that lead to or inhibit success, you significantly increase the odds that you’ll have a program that has an impact on bottom line results. Here are some of the key factors that were highlighted in the research we reviewed.
Make it easy to submit ideas
Not surprisingly, online suggestion systems receive more ideas than paper or form-based systems because it makes the submission process much easier.
The amount of information requested up front also plays a role in the number of ideas submitted. There is an inverse relationship between the amount of information requested and the quantity of ideas. Most organizations that request more information do so to try and improve the quality of the idea and to make it easier to evaluate. However, there are other ways to accomplish this without making the submission process too lengthy. With idea and innovation management systems like SoapBox, the initial submission requires minimal input, but it’s shared with peers for voting and commenting. The idea gets validated by peers before it’s flagged for evaluation.
Another consideration is making sure the submission tool or process is readily accessible where work takes place and does not pose a significant break from the work being done. This is especially important where the ideas are coming from employees that are not desk or computer based. Mobile technology and apps present a great opportunity to provide this capability to more individuals in more situations.
Trust and feedback
Lack of feedback on ideas submitted is the single biggest reason that employees stop submitting them. If there is a perception that the employee suggestion box is a black hole and a waste of time, employees will quickly stop submitting new ideas. I say perception because sometimes ideas are being looked at and evaluated, but communication and transparency around this process is missing or takes too long.
The interesting thing about feedback is that it does not need to be positive. It just has to exist. For example, one study of 1,800 ideas submitted over the course of 12 years at a Dutch energy company found that declining an idea didn’t deter additional submissions. Instead, it took 27 failed suggestions before an employee’s submissions started to drop. Even when a suggestion is turned down, the feedback is seen as positive if there is a proper explanation provided.
Another important element of trust is the participation of leadership within the program. There is considerably more success with programs when leaders are active in commenting and responding to ideas, and reinforcing the usage of the program and celebrating success in communications. While participation from the senior leadership team helps, it’s really the business unit lead or department lead that has the biggest influence. Part of this is that the focus becomes that much more relevant to the day-to-day work of the employees submitting the ideas.
Rewarding idea submission
There’s a significant range of financial compensation that different organizations provide for ideas that are submitted, or ideas that go on to be implemented, or both. For example, one study of manufacturing organizations provided a range of financial compensation from 15 percent of the value of an idea up to a cap (maximum found was $25,000) to a points system that individuals could use to claim rewards. Typical bonuses ranged from $500 to $10,000. In the same study, 80 percent of the organizations also placed great importance on non-financial rewards and promoting “idea generators” internally through honour roles and other internal communications.
Despite the popularity of providing rewards for ideas however, offering rewards hasn’t been known to increase the number of ideas or improve the value of the ideas to the organization. In fact, there is research to suggest that financial rewards may actually hinder creativity. Intrinsic motivation appears to be a much bigger motivator in submitting ideas. Regardless of whether you chose to financially reward ideas or not, non-financial rewards are very important. Recognition of individuals and ideas should be a core component of a communication plan.
Timely evaluation
If you focus on only one thing to get right, focus on feedback. Nothing stands in the way of a successful idea program more than a lack of timely feedback on ideas submitted. Feedback means a timely response to an idea, remarking on its merits and potential feasibility, and updating submitters as the idea progresses towards a completed state.
An idea does not need to be approved in order to keep its submitter happy. Declined ideas will be taken constructively by submitters, and not sour them on the idea system when an explanation of why it was declined is provided. One example are ideas submitted that are already being worked on, but weren’t well communicated to employees. In this way, an idea program can also be a valuable way to communicate existing projects or initiatives.
To remedy this issue, find ways to remove bottlenecks in the flow of ideas. Central review groups limit the quantity of idea flow. This is not for lack of effort or competence, in fact most review groups see themselves as big promoters of the idea generation processes. The problem is simply one of capacity. In a group with 200 people, 20 ideas per person would produce 4,000 ideas annually. A review group that meets once per week or month cannot review that many ideas. Thus the system is self limiting. This is why suggestion systems of this type are often plagued by backlogs, delays in response and implementation, lost interest, skepticism, and ultimately bad feelings on the part of the idea generators.
One way to improve timeliness of feedback is to introduce peer review of ideas immediately after an idea is submitted. It also relates to another important factor in the production of good ideas, which is the dynamic between individual and group idea generation. Software handles the feedback challenge by sharing the idea for peer review prior to moving to an administrator or a central group. Ideas are shared instantly for colleagues to comment and vote on. This provides immediate feedback and also improves the quality of the idea.