Employee Idea Systems Spark Competitive Edge

• Following the installation of an employee idea system, a Clarion Hotel in Sweden implemented nearly 35,000 employee-generated ideas in 2010, which equates to more than 65 ideas per person per year.

• After overhearing a conversation between two guests, a banquet waiter at the Imperial Hotel in Tokyo suggested the hotel establish a service whereby it performs all the activities required to carry out a high school class reunion—thereby relieving the overburdened classmate who normally assumes this responsibility. In the first four months alone, the service generated $600,000 in additional revenue.
• A relatively rudimentary employee idea system at Grapevine Canyon Ranch, a small resort in southeastern Arizona, generated between 250 and 350 implemented ideas per year. The ideas ran the gamut to include: ways to improve the guest experience, lowering costs, marketing the hotel more effectively and making the employees’ jobs easier and safer.

With outcomes like these you’d think every hotel company would race to install an employee idea system. After all, what organization wouldn’t benefit from having its employees generate thousands of ideas every year? Yet, most companies carry on without one. Why? Lots of reasons: lack of awareness, cultural issues, the competing demands of day-to-day operations and so on. One of the most common reasons is managers simply don’t know how to do it.

A fundamental first step in implementing an employee idea system is to ensure your management team is on board. A key part of doing this is to help them understand just how many problems and opportunities front-line employees see that managers are unable to see. Explain to them that, whereas managers tend to deal with higher-order information, such as the fact that costs are up 5%, front-line employees spend every minute of every working day confronted with myriad matters that drive performance. As a result, the front-line sees many more ways to reduce costs and improve performance than their managers will ever be able to see.

Once your management team is on board, you’ll want to start small by implementing a pilot program. Identify a small problem and put together a management and front-line team to tackle it. Choose people who are favorably inclined toward the idea of a continuous innovation system. Start by training the manager in the necessary leadership skills, including meeting facilitation skills and the importance of quickly and diplomatically responding to all ideas. Then train the entire team in how to see and solve problems. Embed the team’s activities in their day-to-day routine by ensuring a regular pre-shift team meeting. Critically important is to develop an effective reward and recognition system. You’ll also need to devise a way for the team to capture, document and implement their ideas as well as a way to measure the performance of the idea system. Finally, communicate the outcomes and value of the program to the rest of your staff.

After the successful completion of the pilot program, the next steps will be to extend the employee idea system to the rest of your organization and to progressively improve your organization’s capabilities with respect to problem-solving skills, communications, group processes, idea management, performance measurement, and rewards and recognition. There is a lot to talk about with respect to each of these topics and not enough space to do it, so I’ll limit my comments to a handful of issues:

• There are many methods for identifying and addressing problems and opportunities, ranging from simple to sophisticated. Training your staff in these methods will dramatically improve their performance.
• You’ll need methods and tools for people to collaborate and communicate with one another, including an online-collaborative workspace. This is especially important when your teams are geographically and chronologically dispersed and when you start implementing cross-functional and inter-organizational teams, such as teams made of employees from different hotels.
• Even a relatively unsophisticated employee idea system can generate thousands of ideas; a sophisticated system will often generate tens of thousands of ideas. The only way to track and prioritize the ideas will be to install an idea management software system. There are dozens of idea management software programs available, offering a range of capabilities.
• Eventually, you should make your employee idea system more strategic by targeting the idea-generation activities at your strategic objectives, including the objectives associated with achieving competitive advantage.

Speaking of competitive advantage, a final factor to think about is this—one big idea is far easier for a competitor to copy than thousands of small ones. Ideally, a company wants to achieve a sustainable competitive advantage, or an advantage that is difficult or impossible for others to copy. But most big, new ideas are easy for competitors to see and copy. Think, for example, of all the competitors who have copied the all-suite, extended-stay and lifestyle hotel concepts. Or consider the “Bed War” that erupted after Westin Hotels and Resorts introduced the Heavenly Bed in 1999.

In contrast, it’s nearly impossible for a competitor to see and copy the thousands of small ideas generated by an employee idea system. What’s more, many small ideas usually add up to a competitive advantage that is greater than any single big idea. Toyota learned that lesson decades ago. Maybe it’s time you learned it, too.