This blog first appeared as Steve Wunker’s piece for Forbes
By: Steve Wunker
Grasping for a competitive edge, companies can invest a lot of time and money in idea-generation programs. Aside from software packages to manage potentially thousands of ideas, there may be people to run the initiatives, committees to assess submissions, prizes to distribute, and of course employee time to create the ideas requested. All of this effort looks worthwhile – after all, ideas are about as uncontroversial as warm cookies.
However, poorly designed efforts can end up making big ideas small, thereby creating a huge hidden cost to the program. The initiatives generate countless suggestions for small process improvements, often creating a large cumulative effect. But if the program is not coupled with a modest effort to find big ideas, it can end up co-opting and downsizing some of the highest potential opportunities.
To see how, look at the design of an ideas program run a major global chemicals company. Because idea submission and approval are important determinants of people’s promotion potential, the program ties an idea to a specific individual. It shares the savings derived from ideas with employees, and some people earn more than $200,000 a year from their submissions. Ideas are assessed by dedicated committees linked to operational functions, and funding for implementation comes from the savings that the concepts generate. The company measures the program’s effectiveness by the number of ideas submitted and the percentage of those ideas that it implements.
The result is that management spends a large amount of time looking at process improvement ideas, rather than defining broader process and business problems. The ideas come from individuals with a limited perspective on the overall operations of a complex enterprise, and these people are submitting concepts in their spare time. Therefore they are not looking very deeply at an issue or examining how the impact of small changes in one function might be magnified – for better or worse – by parallel moves in another function. Because ideas are tied to specific individuals and the rewards can be so significant, sometimes employees have raced from a lunch meeting to be the first to submit the concept, which does little to advance team-building or morale. There is little collaboration in developing concepts, so the company may miss important ways to make the ideas better. Customers and business partners have no role defined by the program, and so they are involved quite sporadically. Because there is no dedicated budget for implementing ideas, only those that have measurable cost savings get put into action fast. Riskier ideas, or those with an uncertain payoff, get de-prioritized. Given that the company measures the number and implementation rate of ideas, managers can convert a single initiative into many distinct efforts, and they may make their concepts less controversial to maximize the odds of their execution.
The chemical company’s program has yielded many incremental process improvements, but few gamechangers. Contrast that experience with Royal Dutch Shell, which to avoid any doubt about its intent labels a prominent idea generation program Gamechanger. The program keeps a door open to any employee, but it is clear about seeking really big ideas. Small process improvements are considered through the relevant line management, not by a corporate group. Rather than try to force-fit ideas into an Excel template, Gamechanger staff grant quick meetings to people with a concept, much in the style of venture capitalists who meet annually with hundreds of entrepreneurs. Ideas deemed to have some potential receive a small seed grant to develop the idea further, often in collaboration with people from other corners of the business. Gamechanger leverages deep partnerships with outside bodies, such as the Colorado School of Mines, to introduce novel concepts. It also defines problems in detail, such as those involved with drilling in the tundra, and then it convenes focused ideation sessions to build out complex solutions.
Just as the chemical firm’s effort in isolation doesn’t meet the total business need, neither does Gamechanger. Both small and big ideas are important to sustained business success. A serious danger of standalone idea collection and process improvement efforts is that they will become repositories of big ideas, thereby making them unwittingly small.
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