Costco Connection - October 2006

Some of the biggest payoffs

come from “small”

employee suggestions

By David J. Dee

Imagine that you’re the chairman of a recreational vehicle manufacturing company. You need to lower the weight of one of the most popular vehicles in your line. Who do you turn to for help?

A. Your top managers

B. The best team of consultants money can buy

C. All of your employees

If you are John K. Hanson, you chose C. And you made a wise decision.

In the early 1990s, the founder and chairman of Winnebago Industries asked employees for ideas for reducing vehicle weight, via an open letter in the company newspaper. Within a month,

Hanson received more than 200 suggestions—many of them for just a few ounces—that collectively solved the problem.

Of course, picking employees’ brains for ideas is not a new concept. Scottish shipbuilder William Denny is credited with starting the first employee suggestion system in 1880. The problem is that many organizations—large and small—still aren’t tapping this great idea-generating resource to its fullest, explain the authors of the book Ideas Are Free: How the Idea Revolution Is Liberating People and Transforming Organizations ( Berrett-Koehler, 2004).

Alan G. Robinson and Costco member Dean M. Schroeder—both management professors and consultants—cite Winnebago as one company that gets it right by recognizing that no one is more qualified to solve problems and create new opportunities than the front-line employees who do the work day in and day out.

“Employees want to make their work

easier and help the company,” Schroeder tells The Connection. “They have lots of ideas—if someone would just ask them.”

Even companies that do put a premium on employee ideas don’t always reap all of the benefits. Too often, managers are only on the lookout for “home runs”—the big ideas that will leave their competitors behind in the dust. Meanwhile, they miss the less glitzy employee suggestions that would actually have a greater impact on day-to-day cost reductions and improvements.

As research for their book, Robinson and Schroeder stud-

“The best employee ied the employee suggestion
ideas systems systems of more than 150 orga- _nizations. _They _concluded _thatencourage employees the programs that worked best
_to _come _up _with kept the entire process rapid _{and smooth.}“_{Quick review}small ideas— and implementation results in
_and _lots _of _them.” more ideas and faster realization _of _their _benefits,” _Schroeder_—Dean _M. _Schroederexplains. This gives small busi- _nesses _an _edge _over _big _organi-zations, which are more likely
to be stymied by bottlenecks in the sugges-
tion, reviewing and implementation process.
The authors also found that when it
comes to generating ideas, more is better
than bigger. “The best employee ideas sys-
tems encourage employees to come up with
small ideas—and lots of them,” Schroeder
explains. “The more ideas there are to choose
from, the more good ideas will emerge.”
As an example, the authors point to
Grapevine Canyon Ranch in southeastern
Arizona. When owner Eve Searle meets with
employees every two weeks, each employee is
expected to show up with one idea that will
improve some aspect of the ranch’s operations.

Innovations that have come out of these sessions include adding a step stool in the van

Five easy idea generators

1. Make it easy for employees to suggest ideas. If more information is needed, you can ask the employee for it later.

2. Create a departmental “ideas board” where everyone can post problems and solutions.

3. Order pizza and discuss employee ideas over an extended lunch.

4. Encourage everyone to identify things that make their work difficult, waste money or distract from the customer experience, and then to think of ways to fix them.

5. Nix the reward systems. They run counter to the concept of working together as a team and are difficult and costly to implement. Better: Do something that shows the entire group you value their ideas—such as taking the group out to lunch or buying a new refrigerator for the break room with the money saved by implementing their suggestions.—DJD

for the guests, stocking alcohol-free cider for nondrinkers celebrating anniversaries and adding a screen to the kitchen door to save on cooling costs.

By no stretch of the imagination could any of these suggestions be described as a home run or a big idea. “But the cumulative effect of these small ideas over time has made it possible for the ranch to attain exceptionally high levels of productivity and customer satisfaction,” notes Schroeder.