CI – ‘Continuous Improvement’ – is an oft-ignored approach to achieving major productivity improvements, whatever the sector – it can have a major impact, whether on cutting waste, making better use of existing resources or employing new technology and investment.
AI – ‘Artificial Intelligence’ – on the othe hand, now dominates business management airwaves – it’s become the panacea to solve the ‘productivity puzzle’ afflicting most developed nations’ economies.
But then, out of the blue, a meaty article appeared in The Times, written by Harry Wallop and headed:
‘If you want to know how to run a business better, ask your employees’
Regular readers will know we have always been strong supporters of this approach – it’s a vital tool for all organisations seeking major productivity improvements, whatever the sector – and not only for financial benefits but employee motivation levels too.
Hence, underneath the following extracts from Wallop’s article, we have added recommendations on how to establish and run an ’employee suggestion scheme’.
They offer big bucks to all – in plain sight and at little cost – yet most organisations look away.
Why?
As Justin King once said when CEO of Sainsbury’s: “It’s not the fear of retribution that stops people speaking up, it’s futility – the belief that it will not be acted on”.
When most managers don’t bother to seek employees’ views, most employees don’t bother to offer them!
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First, Wallop’s article:
Jamie Dimon, boss of JP Morgan Chase, America’s largest bank, has decided to tap into the wisdom of the thousands of his employees to tackle the ‘bloat’.
Andy Jassy, the CEO of Amazon, calls this ‘ the red tape buried deep in our organisations’:
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- He wants his team to email him examples of waste – the stupid stuff we do – the bureaucratic stuff we do – about things you would change if we were able to change them.
- Last year Jassy had asked teammates to send him bureaucracy examples that they were experiencing
- “I’ve received over 1,000 of these emails, and read every one
- And made over 375 changes based on this feedback”.
Jermaine Lapwood, director at Primark, the clothes retailer, says: “I don’t think we have all the answers within our head office, and we need to unlock the power of the ideas within our 80,000 colleague base” – so every couple of months it runs acampaigns asking staff for ideas:
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- Primark uses a software platform making it easy for workers to submit ideas
- Schemes have to be very focused, be it on cost savings, or new products, or new ways of working – otherwise an idea for a revolutionary new piece of software is submitted alongside a plea to fix a dripping tap in the loo
- And there needs to be a dedicated team to evaluate the suggestions.
Balfour Beatty – last year, 2000 ideas submitted from some 24% of the workforce:
- 271 were good enough to act upon, saving £3.2m
- Generators don’t get a reward, but do get recognised.
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Extracts from ‘Productivity Knowhow Revisited’:
Employee Suggestion Schemes:
- If someone takes the trouble to put forward an idea for improvement, someone with clout should take the trouble to treat it seriously and respond
- To maximise your trawl of employee ideas over the longer term, the following guidelines for setting up an employee suggestion scheme are recommended:
- Appoint a director to be in charge of the scheme – his role is to scour the organisation for all good ideas, store and reference them all, and make sure something is done with every one – someone at that level has the broad view and clout needed
- Make it easy for employees to contribute – some organisations create a safe platform on the internet whereby any employee can log on and put forward suggestions – just make sure their name is attached
- Respond quickly to any idea, no matter how silly it may seem, by first acknowledging its receipt and, soon after, explaining the decision on it – delays of a month or more will kill any enthusiasm for the scheme
- Authorise action asap – don’t allow any idea to be lost in bureaucracy
- Don’t waste time requiring presentations – they frighten many people and make new ideas seem special, which they should not be
- Let people implement their ideas their way – tight control stifles initiative, energy and creativity – if possible, provide all the support and resources needed – employees love seeing their ideas being used
- Reward best ideas handsomely – use wide and regular public recognition as well as cash and promotions – just don’t relate any cash to savings anticipated which can lead to major arguments
- Some organisations even supplement their suggestion schemes with subtraction schemes
- Walmart does so by asking their employees: “What’s the stupidest thing we do around here?”
- CI does not require any special improvement projects to be set up
- CI recognises there are always many ‘devils in the detail’ in any system, whether at process or task level – and people working at that level are most likely to spot them, and come up with ways to beat them
- So, if and when thousands of ideas for incremental improvements are generated, the cumulative gain from using many of them can be enormous – and without incurring the same costs, risks and work disruption associated with any ‘quantum leap’ project
- For example:
POTENTIAL ‘CI’ BENEFITS
(1,000 x 0.1%) improvements >>> (1 x 20%)
- Sadly, whilst some companies spend a lot of time and effort generating improvement ideas from their staff, they often fail to do much with them.
- And when this becomes known by all, the whole exercise ends in failure.