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, well, sometimes never see the light of day.
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Now, companies of all sizes have moved fast to replace that relic of a concept with robust, formal idea systems that deliberately tap the collective wisdom of their workforce. Their aim: Remain competitive, reduce waste, and increase efficiency in corporate strategies.
Modernized names such as internal innovation, ideate, ideation, ideabox, and so forth have replaced the old “suggestion box” moniker in the practice’s rebirth.
And the programs aren’t just fuzzy concepts anymore but something that really makes a bottom-line difference with direct benefits. Through growing awareness and management, suggestion programs have gotten smarter.
Surefire Payback
Fueling interest in systematic programs is heightened evidence that they’re working in organizations of various types and sizes.
For instance, a study of 47 companies with nearly 450,000 employees showed that employee ideas saved the organizations more than $624 million in a year’s time, according to IdeasAmerica, a 70-year-old Dayton, Ohio-based nonprofit organization of professional managers and administrators of employee ideas, involvement, and innovation systems. During that time, employees submitted 253,240 suggestions, and 93,034 were adopted. About 46 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.
Moving Ideas to the Next Level
So, how do businesses coax workers to craft their ideas into successful and tangible benefits?
More and more, the trend is to coordinate, integrate, and enhance old-line efforts with online, intranet and social sharing technology, where employees can “manage” their ideas automatically, search and view existing ideas companywide instantly, and get e-mail notification about the status of their idea.
Dubbed “online enablers” by some, these idea-management systems forge the often missing link in employee-suggestion programs of the past—capturing, sharing, and passing an idea up the line for review and feedback instantly.
At Amazon.com, for instance, the company’s internal website features a virtual idea box. An idea submitted by a software engineer at the company about free shipping was later developed into the online retailer’s “all-you-can-ship” Amazon Prime loyalty program. It paid off. The result: Prime ended up boosting purchases by customers who joined by 150 percent.
Other organizations take it up a notch from there – creating full-fledged, leadership-led idea programs.
Example: Business social-networking service LinkedIn® Corp.’s “[in]cubator” program. Once a quarter, any employee at the company can come up with an idea, put together a team, and pitch an idea to an executive team. If the project is approved, the team then gets to spend up to 3 months turning that idea into an actual product or service. Ideas have come in about internal tools, new product and business lines, infrastructure improvements, and Human Resources programs.
Bottom line: Forward-thinking companies can’t ignore competitors’ efforts in this new round of revitalized employee-suggestion programs. As more employers recognize the value that these formal and modern programs can bring to further corporate goals, the employee-suggestion program will quickly become a priority on par with other HR and productivity strategies.
Another driver of the trend? Count on globally minded companies to more quickly embrace the formal and high-tech methods—in an attempt to plug the drain of foreign competition. Consider this: Energy Information Administration data shows that Japanese workers on average submit 30 ideas per year per person, while only 1 in 8 U.S. workers submits one idea annually.
In Tuesday’s Advisor, we present essential elements and potential pitfalls of the new breed of idea programs.