The asking for and cultivation of employee ideas is a vast, untapped resource in most organisations. Yet ideas are a leading source of improvement and innovation, says Andy Brophy of Lean 2 Innovative Thinking.
The foundation of a good idea system is based on the realisation that there is far more capability/ capacity in our people than is actually being harnessed. If everyone improved their work by 0.1% every day that would add up to a 25% improvement per employee year on year, which translates into a gigantic competitive advantage over time. Competitors cannot copy these compounded small improvements (petite “get the basics right” ideas are the focus of the world’s best performing idea systems).
FRONTLINES AND EXPERTS
Unquestionably employees see problems and opportunities every day in their own work areas that their managers are unaware of. The employees are the real experts in the 10 square metres around their workstations. However, many organisations find that one of the foremost challenges during a lean transformation is engaging employees in the daily routine of continuous improvement. These people know better than “experts” all the ways to improve their workplaces and to get rid of waste, however regrettably they are rarely asked. When employees are not given the opportunity to be heard and the time and support to implement their ideas, they lose faith in management and are thus not fully engaged in their work. An effectively designed and properly championed idea system is a high leverage countermeasure to inspire employees to take voluntary initiative in performing daily continuous improvement.
Your value creating people on the frontlines know how intricate their processes are and have a stake in seeing their ideas successfully utilised. I have personally spoken to Toyota veterans and they say that there is a greater than 95% implementation rate for ideas as many of them are not implemented in their original form, but are enriched in collaboration with their employees. People enjoy carrying out their own ideas (we support what we create) and are committed to seeing them work. It gives people a feeling of having a direct impact in the running of the workplace and provides a high sense of accomplishment that fosters employees’ intrinsic motivation.
Hence getting the person who raises the idea to implement it or to participate in implementation is central to the success of the system. This concept is formally known as Kaizen Teian. Self-implementation is hence the cornerstone of successful idea systems and the big differentiator from standard suggestion systems (note: suggestion carries the connotation that it is for someone else to do something about it).
Traditional methods of attempting to capture ideas such as suggestion boxes generally don’t work. They get stuck in their own bureaucracy. There are long implementation times, low participation rates (typically less than 5% of the workforce) and high rejection rates, partly because some are duplicate suggestions which have already been paid for. Most traditional suggestion systems fall prey to ideas for other people to do something about, rather than the originator of the idea. If all you have to do is suggest an idea for someone else to implement you can say whatever you like.
GOOD AND BAD COSTS
All service, hospital, and manufacturing organisations incur two types of cost:
- Costs that deliver value to their customers. These costs are good and are to be welcomed and even increased if they help differentiate the organisation’s offerings;
- Costs that don’t deliver value to their customers, and therefore represent waste.
Many cost-cutting exercises don’t distinguish between these two forms of cost, or worse still attack the first cost category exclusively, which is why many cost cutting efforts end up causing more damage than good over the long term.
Operational waste can take many forms including waiting, not using people’s talent, excess walking, unnecessary services, duplication, rework and defects, wasted energy, excess materials, etc. There is no end to improvement opportunities if we become sensitised to waste as the quote below from Shigeo Shingo (Toyota’s original lean sensei) reveals:
“If the nut has fifteen threads on it, it cannot be tightened unless it is turned fifteen times. In reality, though, it is that last turn that tightens the bolt and the first one that loosens it. The remaining fourteen turns are waste.”
The purpose of an idea system is to deliver continuous incremental innovation, employee inclusion and engagement, and up-skilling to the workplace. Employees are coached to put forward ideas that make their job easier, can be implemented quickly, eliminate the cause of problems, save money, and don’t cost too much to implement.
We commonly hear: “That’s already happening here, we just don’t write the ideas down.” However, is there anything else that we do that is important like, for example, your travel expense system that you don’t have a process for? Ideas are too important to be left to chance and in the absence of a defined process they will be pushed to the back burner due to pressing routine day to day issues concerned with making the numbers.
WHY DO EMPLOYEES STEP FORWARD WITH IDEAS?
- They trust that they will be listened to and supported with implementation;
- They want to eliminate impractical things that they have to do;
- To make their jobs easier and more interesting;
- There is nothing more frustrating than watching money being wasted.
THE LEAN STYLE OF IDEA MANAGEMENT
The lean approach to idea management places emphasis on workforce participation. Idea activity is an expected part of frontline employee jobs. There are high participation (typically more than 50% of the workforce) levels in comparison to suggestions box type of approaches.
This is because roles and responsibilities for the idea system are outlined at all levels. Ideas are visually displayed on boards, implemented fast, and nonmonetary recognition is bestowed. Research studies have concluded that non cash-recognition is more effective than direct cash awards. A survey of 1,600 companies by The American Compensation Association on productivity concluded that non-cash rewards offered a 3:1 return on investment in comparison to cash rewards.
New skills are learned by employees through interacting with support functions when implementing their ideas. People are coached to recognise “hidden” waste and the idea system is integrated into daily problem solving. Idea activity is also measured. The employee’s direct manager mentors and supports the idea originator during implementation.
There are also very high approval rates for ideas put forward. Employees are coached as to what constitutes a good idea. “Bad ideas” are viewed as training opportunities; the intent behind the idea is teased out and put forward again. Peer accountability is expressed through employees posting their ideas in the work area. Focusing people on particular topics (for example safety, quality, cost, delivery, morale and the environment) leads to more ideas. Ideas are often tested and implemented prior to being put forward into the idea system.
Small ideas don’t take enormous time and resources to implement and are not a burden on management. In fact it is the opposite. Small ideas are more powerful than bigger “big bang” ideas because of a number of factors:
- The originator can coordinate implementation;
- People champion what they create;
- They are easier to implement and spread (compounding effect over time);
- They involve less risk (implemented using small PDSA cycles);
- They are better for learning (more rapid feedback);
- They are better for developing people (self-efficacy – small wins build people’s confidence and intrinsic motivation to keep on continuously improving);
- They are more sustainable – bite sized improvements have a higher probability of success;
- The bigger the ideas, the more likely competitors will discover and counter them.
IDEA PROCESS FLOW
- Challenge all employees to come up with two small ideas per month and to post them on a visual idea board (see figure 1);
- The idea originators review the idea with their peers (this saves supervisor evaluation time and improves the quality of ideas). The supervisor then responds to the originator within 24-72 hours of the idea being brought forward;
- The person who comes up with the original idea should implement the idea themselves or with the help of their work team. This is the key to the system. If additional help is needed from maintenance, IT, etc. the idea instigator should coordinate the completion of this work;
- Record implemented ideas in an idea log and/or electronically and track success metrics visually at the gemba.
If the cycle above flows smoothly, the improvement activity will also flow naturally; one idea will lead to another and continuous improvement will translate into improved performance and immensely higher employee engagement. The alternative is to leave your organisation open to the eroding effects of entropy.
Entropy dictates that everything essentially degrades over time – hence if we are not implementing improvement ideas we are getting worse day by day (often unknown to ourselves – the boiled frog syndrome). This should imply that idea systems are not optional.
Well run idea systems are realising substantial returns. American Airlines IdeAAs System has historically saved on average $55m a year. In 2009 the idea system at The Baptist Healthcare Hospital group in Florida realised over $25m in cost improvements.
In summary the indispensable ingredients of high performing idea systems are: (a) it is easy to put forward ideas (both physically and psychologically); (b) the evaluation/ enrichment process is fast; and (c) the idea originator coordinates the implementation of their own ideas.
Innovative Lean: A Guide to Releasing the Untapped Gold in Your Organisation, to Engage Employees, Drive Out Waste, and Create Prosperity by Andy Brophy and John Bicheno (2010)
For more information contact Andy or John:
email@example.com or firstname.lastname@example.org