From Ideas to Results

By Feb 1, 2005
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HR Magazine, February 2005 To get the most from your company's suggestion system, move ideas up the ladder through a formal process.

Employee suggestion programs have come a long way from the dusty, slotted box on the wall in a remote corner of the office, where employees’ written ideas could be deposited—and sometimes would be forgotten.

Today, more employers—and their HR staffs—have replaced the old suggestion box with a robust formal process that deliberately taps the collective wisdom of their workforce. Their aim: Remain competitive, reduce waste and increase efficiency in corporate strategies.

Employee suggestion programs “aren’t just fuzzy concepts anymore, but something that really makes a bottom-line difference with direct benefits,” says Thomas Jensen, president of the Center for Suggestion System Development, a consulting firm in Wellington, Fla., that designs and develops suggestion systems. “Through growing awareness and management,” he says, “suggestion programs have gotten smarter.”

Fueling interest in systematic programs is proof that they’re working in organizations of various types and sizes, says Jensen.

“There’s no denying that the real expert is the person who does the job; therefore, that’s the best place to go to when improvements are sought,” he says. “Millions of dollars are being saved by listening to the company’s greatest asset—its human resource.”

For instance, a study of 47 companies with nearly 450,000 employees showed that employee ideas saved the organizations more than $624 million in 2003, according to the Employee Involvement Association (EIA), a Dayton, Ohio-based organization of professional managers of employment involvement programs. In 2003, employees submitted 253,240 suggestions, and 93,034 were adopted. About 32 percent of the employees submitted at least one idea to their employer.

Moreover, the return on investment can be huge. The average award that companies paid per employee suggestion was $235, the survey report notes, but the value received was about 10 times greater.

“The data show a very big payback—in terms of money and morale,” says Jim Spengler, immediate past president of EIA, and director of Metroparks of the Toledo Area, the regional operator of public parks in metropolitan Toledo, Ohio. “Idea programs have proven to be very good investments. It’s almost like getting free advice.

“With positives like that,” he adds, “you really have to ask yourself, ‘So why wouldn’t you do it?’ ”

The essential elements of an employee suggestion program, according to Jensen, include the following:

  • Senior staff support.
  • A simple, easy process for submitting suggestions.
  • A strong process for evaluating and implementing suggestions.
  • An effective program for publicizing and communicating the program.
  • A fair and motivating award structure.
  • A program focus on key organizational goals.

The HR Challenge

One reason some employers have hesitated to install formal suggestion systems may be that creating and managing them successfully is no small task. And the risks associated with doing it poorly can be large, experts say. If a suggestion program is underutilized or inadequately managed, the results can include declines in employee morale, lost opportunities to cut costs and unaddressed safety issues. Says Spengler: “If you encourage employee ideas and then sit on them, you’re sending a message to your employees that ‘yes, you may get a response from us by the time you retire.’ That’s a terrible message to send to your employees, and it can do more harm than good.”

Potential problems in the employee suggestion process tend to be lack of proper recognition to those involved; a perceived lack of support from management; excessive turnaround time between submission of an idea and the final decision; inadequate training for employees and evaluators; and insufficient marketing and publicity to keep the program fresh. Any of these characteristics can render a program a failure, Jensen says.

Increasingly, companies that have had individual managers and departments handle suggestion systems are seeing the value of having HR, with its strengths in people issues, track and manage suggestion programs. “It’s a fantastic way for HR to be proactive,” says Andrew M. Wood, founder and president of Ideas Management Inc., a consulting firm in Gig Harbor, Wash., that specializes in suggestion systems and recognition programs. He says HR should be responsible for ensuring that all the players buy into the program—and should take a coordinating role to make that happen.

“If HR gets this right, everyone is on board with the program prior to its launch and happy to undergo training and to handle ideas,” he says. “If they don’t get this aspect right, there are black holes where ideas get lost and only those who are keen get involved.”

Speeding Up the Process

At a facility of American Axle & Manufacturing Holdings Inc. in Three Rivers, Mich., suggestions were backlogged, and typically it took about 158 days for an evaluation. “That was simply unacceptable,” says Dawn Berger, United Auto Workers (UAW) Local 2093 suggestions coordinator at the plant, which produces automotive driveline systems and has 991 employees. “We wanted to turn them around much quicker.”

To do that, in 2002 the manufacturer tried a new approach: Ideas would be prescreened for an hour every Monday. Included in the weekly sessions were the plant manager’s staff—manufacturing manager, engineering managers, maintenance manager, personnel director, quality manager, manufacturing superintendents—and UAW associates who represent manufacturing assembly. Everyone took part, and the time it took to evaluate valid improvement ideas dropped to no more than 94 days.

But Berger wasn’t satisfied, and a corporate goal was set to trim the evaluation process down to 75 days.

So in 2003, the plant’s suggestion team started prescreening all new ideas not just weekly but every morning. The result: Ideas are now turned around within 58 days—beating the corporate target. Of 696 employee ideas received by the plant in 2003, 174 were adopted, Berger says. About 39 percent of the plant’s employees participate.

“Employee suggestion programs can mean different things to different people,” Berger says. “Upper management support and good communication have a lot to do with their success—and we had both.”

Moving Ideas to the Next Level

To help workers craft their ideas into tangible benefits, American Axle uses a three-part form to collect suggestions. In it, employees describe their recommendation for improvement specifically—even “locating what bay [the specific workstation] they’re talking about,” says Berger. They then write out the measurable benefit their idea would produce.

The last page is a sheet of graph paper on which employees translate their thoughts into drawings—giving evaluators another dimension in which to understand and weigh the idea. The employee gets a copy of the form and worksheet, and the suggestion is passed up the line for review at the daily pre-screening meeting.

If the suggestion has merit, it moves forward to five suggestion teams that Berger established to further evaluate ideas based on the area of expertise. Employees get quick feedback either way. Each week Berger sends letters to the associates whose suggestions will not be adopted. Employees whose ideas are adopted receive feedback and an award.

“The fact is, it only takes one idea to make a difference,” she notes. “And that’s why I want to see everybody’s ideas.”

Similarly, Lockheed Martin Systems Integration-Owego in Owego, N.Y., developed its Cost Effectiveness Plus (CE+) Program to recognize employees who streamline processes at the site and create a more efficient work environment.

“Employees electronically submit their ideas, the manager approves, and then the coordinator approves,” says Sue Giliberti, CE+ program manager. Ideas that would require management sign-off get forwarded to an evaluator for study before approval.

The Owego site chalks up savings of more than $100 million each year, or about $77,000 per implemented idea. A recent example was the suggestion by a 13-member team that the company use flexible cable rather than rigid cable on a project, which produced a cost saving of $141,000.

From Idea to Policy

While many suggestion programs target cost savings as a goal, others can help improve companywide policies.

To encourage ideas and initiative, Four Seasons Hotels and Resorts in Toronto requires each of its 63 properties to have a suggestion system in place, with timely review and response to all ideas, says Ellen du Bellay, director of learning and development at the parent company.

Each hotel also forms a “direct line” committee, which meets monthly to give line staff representatives from each department a chance to make suggestions, express opinions and ask questions of the hotel’s general manager. At these meetings, employees’ bosses aren’t present, du Bellay says. The goal is to encourage a relaxed meeting that gets honest ideas and feedback all the way to the top.

Communicating ideas among facilities is accomplished via two channels. One is a best practices database that general managers of all the hotels maintain and through which they share ideas. The other channel consists of the regular meetings of a committee of vice presidents and regional managers. Ideas are presented and discussed at the meeting, and those that are endorsed are sent out to facilities for implementation.

For example, an idea developed by Robert Cima, regional vice president and general manager of the Four Seasons Hotel Philadelphia, led to the adoption throughout the chain of an enhanced training and performance-rating tool.

Cima’s idea is based on Four Seasons’ practice of having a core set of standards—actions and activities for meeting guests’ needs—for each service job in a hotel. Those standards in turn serve as a major measure of an employee’s performance and success on the job. For example, one of 18 core standards for a housekeeper is to be able to answer basic questions about the property and fulfill simple requests rather than just refer guests elsewhere.

Employees were being tested about twice a year on their standards achievement, says Cima, and he wasn’t convinced that the level of testing was sufficient. “We were somewhat erratic in our compliance,” he says. “So we asked ourselves how we could get to perfection.”

Cima’s idea was to increase the number of standards measured and the frequency of testing each employee. Depending on the job, he advocated raising the number of standards tests per employee to between three and six per month.

After the tests, the manager sits down with the employee and reviews the results—as well as the specific standards achieved or missed. The hotel then tracks the standards that are most frequently missed, identifies trouble spots, and uses coaching sessions with departments and employees to improve scores.

This intensified focus on employee knowledge and performance resulted in the hotel’s compliance measure moving up from 80 percent to the low 90s, Cima says.

Cima took his idea and its results to a committee of vice presidents and regional managers. The committee studied his idea, endorsed it and sent it to all general managers for implementation.

At first, Cima admits, managers were a little leery of the stepped-up testing plan. “But human nature is to get real feedback, and they embraced it. Interestingly, employees were soon even asking, ‘Would you test me?’ ”

Verna Rae Miller, a front-desk receptionist who has worked at the hotel for seven years, says the standards testing program has actually created a more positive environment. “It’s viewed more like a game to be won,” she says. “There’s no public chastisement because of what results may show; it’s really produced more camaraderie among us—the feeling that we all work together toward a common goal.”

Miller, whose job mixes duties of concierge, receptionist and travel agent, says the value of the program also helps employees see the big picture. “Before, there was a kind of feeling of tunnel vision,” she says. “Now, you can clearly see how your job relates to the whole.”

Money Isn’t Everything

While recognition plays a part in any suggestion program, cash isn’t always king. “All the surveys in the world do not demonstrate that big awards make for better ideas,” says Ideas Management’s Wood.

That’s what Modern of Marshfield Inc., a specialty upholstery manufacturer in Marshfield, Wis., discovered as its improvement-suggestion program evolved.

Years ago, the company injected cash rewards along each step of the way. An employee whose suggestion was implemented received a percentage of the savings realized from the change. Another percentage went into an employee fund that was distributed annually among all employees who had made useful suggestions during the year.

But when the 60-year-old company started noticing declining enthusiasm and participation, it revamped the way it recognized involvement, says Bill Mork, president of the 100-employee firm. “When we tied money to it, we found that employees in one department might make suggestions which would save them time and money—but might affect another department in the opposite way,” he says. “So we’ve instead since found ways for supervisors and employees to work together on finding better ways of doing things—and examining the impact on everyone.”

Through lots of cross training among different departments, Modern of Marshfield enabled employees to learn to make collaborative suggestions. “For example, a fabric cutter in the morning may go to the framing department to help in the afternoon and be able to notice and recommend an improvement between the two,” Mork says. “This creates a more global view, so they can see a better, smarter way of doing things companywide.”

Departments now meet weekly to discuss improvement suggestions, and employees are rewarded through a new colleague-to-colleague recognition program, dubbed “Pride,” for ideas and achievements, Mork says. Money is no longer the chief focus; employees are recognized for a month with postings on a companywide board, and supervisors personally thank them and recognize their improvements with more personalized gifts and incentives.

Engagement on Both Sides

As such examples show, suggestion programs are undergoing a new round of revitalization as more employers and their HR leaders recognize the programs’ value in furthering corporate goals.

“When employees are engaged in supporting an organization’s mission and operating results, good things happen,” says the EIA’s Spengler. “And where management truly values receiving input from employees on a regular basis, suggestion programs do better and companies have clear and valuable results to show for it.”

Susan J. Wells is a business journalist in the Washington, D.C., area with 19 years of experience covering business news and workforce issues.

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