Guest post by Jehan Joy Tandingan Gesta.
There’s usually a natural rate at which organizations improve. It’s 2 to 2.5% per year but if you manage it – if you think of how to improve and innovate and you take action, you will have a different result. If you manage improvements consciously the rate ranges from 12% to 17% over an extended period of time. Alan Robinson and Dean Schroeder shared their new book “The Idea-Driven Organization” in a webinar – and we captured the gist for you. But how do you get that advantage? How do you boost your organization and balance the harmony between profit and employee satisfaction?
“80% of ideas are in the heads of front-line people.” – Alan G. Robinson
Front-line workers are doing the work. They see many problems and opportunities that managers don’t. They not only see what’s going wrong, but they also experience it first-hand. When given the chance to change that, they’ll surely have something to say. They’ll come with a solution to management problems.
Most companies are driven from the top — a command and control approach. How do you make a difference among companies that have the same pattern and system? It is one thing to create an idea-driven organization but it will be remarkable to get those ideas from the bottom.
In organizations with effective idea systems, roughly 80 percent of the potential for overall performance improvement comes from front-line ideas. Only 20 percent comes from management-driven initiatives. Organizations that are not set up to listen to and act on large numbers of front-line ideas are using at best only a fifth of their improvement engine.
Coca-Cola: huge savings
In 2006, Coca-Cola mandated Six Sigma in all of its operations all over the world—bottling, distribution, marketing. Six Sigma is a problem-solving methodology for solving large problems that have big impacts where extended study and protocols are followed to make sure that it’s done right. It’s a top-down philosophy that it’s applied to problems that management sees. A new manager came in from an innovative company from Sweden. She noticed that there was no idea system for front line people. She put one in place in addition to Six Sigma. At that time, two mandates were in place: one to solve the problems that management saw and one to solve the problems that the front line people saw.
From 2008 to 2010, Coca-Cola saved €4,000,000 from four Six Sigma black belt projects. Seven green belt projects saved another €1,000,000. At the same time, thousands and thousands of ideas came from the front line employees. They were individually smaller but collectively saved €9,000,000! 83% of the savings came from front liner ideas while 17% came from management.
If you’re not set up to tap these ideas at the bottom of the organization and move them through, you’re undermining your organization’s potential. One of the best sources of security for all types of organizations is the ability to improve and change. If you’re not doing this, your organization won’t reach its full potential and won’t adjust to change.
But how do you create an idea-driven organization? You have to set up and run several high performing idea processes and to do that you have to be an idea-driven leader. That means you have to make ideas part of everyone’s job. Next, you need to focus ideas on key strategic goals and realign your organization for ideas.
When your employees are problem-solving and generating and implementing ideas that further the organization’s strategic goals, on a daily basis, how would that affect your bottom line?
Go after small ideas
It’s not the big ideas that provide a sustainable competitive advantage, it’s the small ones, claim Robinson and Schroeder. Small ideas lead to more and better big ideas. Small changes that are effective when applied all together can create a big, positive change in the organization. Once everyone gets the idea-driven attitude, ongoing improvement becomes a habit. However, excellence demands attention to detail.
Small ideas are quick and easy to implement. If we ask our front-line people to think of small ideas that are doable, we give them the satisfaction of implementing their ideas in a short span of time. There’s a huge relationship between big and small. You need a lot of little ideas to create a big difference. A lot of front-line ideas need to be escalated to a higher level to be studied and implemented.
Make ideas part of everyone’s job
If you want an idea-driven organization, everyone should have an idea-driven mindset – from front-liners, supervisors, middle managers, top leaders, to even the support staff. Most support staffs are not charged with helping people. Front-line people should identify problems, generate ideas, and implement and verify if these ideas work to solve the problem. Their feedback should be the most sought after because they see everything in action.
Supervisors should encourage, coach, champion and create this idea-driven environment. Their attitude highly and directly affects the behavior of the front line people. They can enhance motivation by implementing the ideas of the front-line people quickly. Listening to them, acting on their ideas and thanking them for it. People will line up to participate.
Middle managers are equipped to resource, train, overcome barriers, and work cross-functionally. Top leaders have the power to champion and provide vision, prioritize focus, and assure growth and improvement.
General advice: try to stay away from incentivizing people for specific ideas. Giving them a limit on their creativity at this point limits their ideas.
A Different Kind of Leadership
Research by Fred Luthans on successful vs. effective managers states that those who tend to get promoted are not necessarily great leaders. Successful leaders keep an eye on managing up: they improve their relationship with their higher ups. While effective leaders, spend more time to improve their skills and their unit.
Humility is important to an effective leader. Idea-driven leaders are very humble people. You have to be humble to listen to your front-line people, to believe in their ideas and to actually implement them.
Power can get in the way of being a revolutionary kind of leader. Sometimes, when a manager gets promoted, they no longer listen to their people and only treat them as a means to an end.
Help your people do it
Robinson and Schroeder recommend increasing people’s problem-finding and problem-solving skills. Give them powers of observation. Teach them to have a different way of thinking. Enhance their sensitivity sensors. Provide creativity training.
Create and use idea activators. Conduct short training sessions to get people to think about things and how they can improve. Subaru, for example, was one of the companies who first taught their people Recycle, Reuse and Reduce. What needs to be done in that process is teaching idea mining. Deploy systems that identify problems quickly. Setting up an idea system forces you to remove barriers to innovation.
Most companies tend to ignore how much front-liners actually contribute to their organization. Front-line workers do the work and create the organization’s results. Nothing will start if they don’t start doing their jobs. Being idea-driven and facilitating ideas from the bottom will surely revolutionize the world of management.
Further references:
www.idea-driven.com
@alangrobinson
@deanmschroeder
This Post Has 2 Comments
Your ideas resonate deeply with me. Recently I discovered that an idea I had communicated for promoting one of our organization’s programs was picked up and implemented by senior management after I was laid off. Others were given the credit for the idea and no one will ever know that it came from me. No real harm is done to the company in such a case unless I choose to bad-mouth them in public. However, their treatment of me is emblematic of their behavior toward all lower-level, front line and support staff. We are cogs in their machine, not full contributing members of the organization. We are treated as though we are not expected to have valuable ideas; therefore, when we do have them they get lost on the way up to those who will actually be allowed to give voice to them. The organization will continue to have problems with high turnover and recruitment of staff until they learn the lesson involved here.
Contrast this with highly functional and innovative companies like The Container Store and Southwest Airlines. In these award-winning organizations, mid-level managers are trained to seek out and listen to the ideas of their front-line employees, because they know that’s where the “gold” is. As a result, year after year they continue to thrive even through tough times.
Thanks for sharing this case, Moira! This is an example of old-fashioned thinking and the opposite of empowering, positive leadership, of course. The thing is the organization and leaders won’t learn if no one voices this feedback. That takes courage, I know. The feedback they currently receive is disguised as problems with high turnover, etc. I hope that they will start to wonder why that is and ask questions. If they don’t, it would take a few courageous people to give that feedback. If people won’t speak up unless they are allowed to voice something – the organization is clearly disempowering and losing potential. Organizations should give everyone permission to say anything – and people should always speak up. Easier said than done – but that’s the key to an energetic, idea-driven workplace where people thrive. I hope you’ve found a better workplace after this experience!