Big Results from Small Ideas

By Alan G. Robinson and Dean M. Schroeder

Originally published in Industrial Management - May 1, 2005

EXECUTIVE SUMMARY

Sure, everyone wants to hit one out of the park with a solution that is so elegant, so profound that it stuns by virtue of its brilliance. But really, how often does that happen? And when it does, how long before the competitor picks up on it? Often, there are more benefits by gathering and implementing small ideas.

Several years ago, we gave a talk to a group of business leaders about managing ideas. As we began to discuss the importance of small ideas, the CEO of a well-known computer equipment maker bluntly interrupted us.

"I think I speak for all of us when I ask you to talk about what we can do to get big ideas--the kind of blockbuster innovations that transform the terms of competition. That's what we're really interested in," he said.

Who doesn't love big, dramatic ideas? In fact, the bigger and sexier the ideas, the more we're drawn to them. So it's not surprising that when business leaders such as that well-meaning CEO think about promoting ideas, they envision going after the home runs--the super-sized breakthroughs that promise fame and fortune. Yet in their eagerness to strike gold, they aim for the wrong thing and overlook what will help them most--the small idea gems.

We recently completed one of the most extensive studies ever undertaken of best practice in managing employee ideas. We visited more than 150 companies in 17 countries. These organizations ranged in size from small family businesses to large multinational corporations. We compared the best idea systems in the world--those implementing 20, 50 and even 100 ideas per employee per year--with medium- and low-performing systems. The purpose was to document what works to promote idea generation, what doesn't, and why. One of the most surprising findings of the Ideas Are Free study was how high-performing companies focused on small ideas while low-performing companies tended to go after big ones.

Sustaining a competitive advantage

One of the most counterintuitive facts about small ideas is that they can actually provide a business with more sustainable competitive advantages than big ideas.

A few years ago, we were asked to help a well-known German automaker improve its idea system.

"It's so hard in our business today," a manager told us. "We're always looking for the next big idea, especially to cut costs. But before we can completely implement one idea, we are already behind and need to look for the next one. We work long hours, with no breathing space whatsoever. We're exhausted."

It became clear that despite their tireless efforts, managers couldn't seem to create much advantage that was sustainable. Major improvements were quickly countered by other automakers, evaporating any early advantages. The problem, we soon discovered, was managers' belief that big ideas were the only way to get ahead. They were limiting their own success.

The bigger the ideas, the more likely competitors will copy or counter them. If new ideas affect the company's products or services, they're directly visible and often widely advertised. And even if they involve behind-the-scenes improvements--say, to a major system or process--they're often copied just as quickly. That's because big, internal initiatives typically require outside sources, such as suppliers, contractors, and consultants, who sell their products and services to other companies, too.

So no matter how hard our German colleagues worked to come up with big, cost-cutting ideas, they couldn't seem to develop a sustainable competitive advantage. While big ideas were essential to keeping up with the competition, they weren't sufficient for staying ahead.

Small ideas, on the other hand, are much less likely to migrate to competitors--and even if they do, they're often too specific to be useful. Consider what happened not long ago at the Vidette Times, a regional newspaper in Indiana.

Due to a supplier's strike, the pressroom ran out of newsprint late one night. Fortunately, a press operator was prepared with a backup plan--one he hoped he would not be forced to use. While the presses required newsprint rolls 45 inches in diameter, he managed to borrow some 47-inch rolls from a sister operation earlier that day.

The press operator's plan was to unroll thousands of feet of newsprint manually from the 47-inch rolls until they fit on the press--a real feat since each roll weighs several tons. He and a co-worker took the first roll to a press on a forklift truck. To their astonishment, the larger roll snugly slid into place! The press manufacturer's specification had been too conservative.

The discovery went on to save the newspaper thousands of dollars every year. It meant fewer roll changes and running far fewer setup copies to get the ink flowing after each change. Fewer roll changes also shaved a substantial amount of time off each night's press run.

A more important point, however, is that when the idea came up, the Vidette Times was in the midst of an intense circulation war with its biggest competitor. Had the newspaper come up with a new marketing or editorial idea, its archrival would have been in the know immediately. But how would the competitor learn about the switch to 47-inch rolls? Plus, even if it did get wind of the idea, it would be of no benefit since the rival had a different printing press.

Because most small ideas remain proprietary, large numbers of them can accumulate into a big, competitive advantage that is sustainable. That edge often means the difference between success and failure.

Consider Milliken & Co., a global fabric and specialty chemicals company: It competes against textile manufacturers that operate in some of the poorest countries in the world, manufacturers that pay their workers less than one-twentieth of what Milliken pays. Many of the company's U.S. counterparts are struggling or have even gone out of business. Not Milliken.

Since textiles are a mature industry, every competitor has access to the same technology and equipment. So Milliken competes by out-managing its overseas rivals. The company's "Opportunity for Improvement" system brings in some 7,000 ideas from workers every day. Because most ideas are small, they're difficult or even impossible for competitors to copy. They amass into superior performance that Milliken has sustained for several decades.

Achieving performance excellence

Small ideas, besides remaining proprietary, enable organizations to pay extraordinary attention to detail. Excellence means getting the details right in all aspects of the business, from quality to service. Beyond a certain level, it's simply impossible to improve performance without getting lots of small ideas.

Consider Grapevine Canyon Ranch, a resort in the high desert of southeastern Arizona overlooking the former homelands of the great Apache chiefs Cochise and Geronimo. Guests come from all over the world to take pleasure in the unspoiled beauty of this historic desert. While they want an authentic experience, they also expect exceptional service. Because Grapevine pays extraordinary attention to every detail--thanks to hundreds of ideas from its workers--the resort delivers.

Every two weeks, Grapevine's owner, Eve Searle, has a meeting with all employees. Each one is expected to show up with one idea, no matter how small, that will improve some aspect of the ranch's operation. Some of the ideas have included:

• Put instructions and labels on the circuit breakers in the cook shack.
• Provide alcohol-free sparkling cider for non-drinkers on special occasions.
• Offer in-season fruit as a dessert alternative.
• Place a receptacle for cigarette butts by the swing.
• Paint the outdoor water faucets green and red to differentiate between drinking water and yard water.
• Install a kick plate on the door into the kitchen.
• Change the brochure directions for guests arriving from Ironwood.
• Put a step stool in the tour van.
• Have maintenance prevent the soap caddies in each shower from falling.
• Relocate the speed-limit sign so it won't be obstructed by the mesquite bush.

It's infeasible to achieve excellence in performance without such attention to detail. And it is workers, not managers, who most often spot the little things that add up to big success.

Small ideas lead to big things

Remember that well-intentioned CEO of the computer equipment company who was interested only in big ideas? Another reason he was so misguided is that even if all he had wanted were big ideas, the best way to get these is to pay attention to small ideas. Most big ideas start off small. Small ideas are the germs of bigger ones.

That's because big problems and opportunities frequently manifest themselves through a host of smaller signs or symptoms, each one of which might be seen by different people in different places at different times. So what might seem to be a small idea could in fact be addressing a single facet of a much larger issue.

Consider a small idea from a worker at Monrovia, one of the country's largest wholesale nurseries.

Much of the work at Monrovia involves transplanting plants into increasingly larger pots to support their growth--a process known as canning. The soil, which is specially formulated for each kind of plant, is kept in huge piles outside the canning shed.

Whenever it rained, the canning job became extremely unpleasant. The soil contained a healthy dose of manure, which, when wet, turns acidic and noxious. Not only did the wet soil smell awful, it collected under workers' fingernails and irritated their skin. Moreover, it was very heavy, sticky, and acidic, causing workers' hands to hurt in a few short hours.

One worker's idea: Buy a large tarp to cover the piles of soil whenever it rains. Easy enough. The idea was quickly approved, with the worker praised for his morale-boosting suggestion. What no one anticipated, however, was the consequences of the idea for the plants themselves.

When plants are canned in dry soil, they grow and thrive. In wet soil, though, the yield drops dramatically--sometimes as low as 60 percent. The soil cakes when it dries in the hot sun, making it much more difficult for the growing roots to penetrate it. The soil also clumps, leaving pockets of air beneath the surface that expose the roots and prevent them from absorbing water and nutrients.

In other words, whenever it rained, Monrovia would unknowingly enter a low-yield phase. Because the plants died gradually and at different rates in different places, no one at the company realized what was happening.

With Monrovia's canning lines transplanting up to 2,700 plants per hour, the worker's idea saved the company a huge amount of money. Most problems and opportunities cut across organizational lines and manifest themselves through multiple symptoms, many of which can be quite subtle. No one can know who is going to spot which symptom first or how that person will propose to address the symptom.

The bottom line?

The smallest idea may very well be a partial response to a bigger problem or opportunity. Thus, whenever a worker offers a good idea, no matter how small, managers should stop and ask three questions:

1. Where else in the company can this idea he used?
A single small idea can be used in many other places, ultimately turning it into a big idea. Yet the opportunity will be missed unless somebody asks where else the idea can be used.

Consider a small idea from an appliance salesman at one of the country's largest retailers. Often, customers bought refrigerators without realizing that they wouldn't fit through the doorways of their houses. Delivery crews would struggle with the refrigerators for a while, often damaging them as well as doorways in the process, before boxing them back up and returning them to the warehouse.

Nationwide, the problem was costing the retailer millions of dollars. In addition to paying the delivery crews for failed deliveries, the company had to mark down all those damaged appliances. Worse yet, it was losing customers and sales.

The salesman's solution: Cut a piece of string to the length of the appliance's critical dimensions and staple it to the customer receipt. Then simply ask the customer to use the string to check the doorways and to call immediately if there's a problem.

The idea was adopted by the salesman's co-workers as well as by several other stores in the area. But if the retailer had had a companywide process for communicating good ideas, it could have leveraged the salesman's suggestion at more than 2,000 locations. Because it didn't, the company squandered more than 99 percent of this idea's huge potential.

2. What other ideas does this idea suggest?
When used as stepping stones, small ideas can expose larger problems and opportunities. Thus, every small idea should be eyed as a possible clue to a bigger one.

Consider a small idea from a worker at the Grapevine Canyon Ranch. Since Grapevine attracts a significant number of German guests each year, the worker, who spoke German, suggested that he translate the resort's brochures into German. The idea was well-received and quickly implemented, even leading to the creation of a German version of the resort's Web site.

Yet suppose the idea had been explored for other possibilities. The worker had stepped forward because he knew German. But what about French? Spanish? Japanese?

If the idea had been fully explored, it could have triggered a full examination of the resort's posture toward international guests. From special cuisine and services to language classes for workers, the possibilities were enormous. The worker's single small idea was his response to a much bigger opportunity--an opportunity of which he saw only a tiny piece.

3. What are the patterns in this idea?
Significant problems and opportunities can give rise to multiple small ideas, with the connection between them often showing up in patterns.

Consider the small ideas presented by two employees in an idea meeting at a national marketing company.

One worker pointed out that the company was paying too much for office supplies. While a local supplier was giving the firm a discount, the worker knew that prices were significantly lower elsewhere.

A few minutes later, another worker reported that she and a co-worker had rented separate cars on a recent business trip, with the co-worker paying twice as much for the same car from the same rental company. While her co-worker got a corporate discount, she had AAA. She suggested the company buy a corporate AAA membership, which would not only save money but be a nice perk for employees.

Both ideas were useful enough on their own. But together, they pointed to a potentially big problem: The company's purchasing department might need a wake-up call.

Had only one of the ideas come up, the problem might not have been so obvious. Rushing purchasing department workers off to some negotiation-skills training would have been an overreaction. But what if poor purchasing practices did underlie the issue? It's easy to see how two small ideas, coming within a few minutes of each other, could be a clue to a much bigger opportunity. If management had been actively looking for patterns among workers' ideas, they might have easily flagged the problem before it cost the company a lot more money than it already had.

Common myths about Idea Generation Processes

Here are nine myths we often see about harnessing ideas from employees:

MYTH #1: Big ideas are where the action is.
Reality: Big ideas come along rarely and unpredictably. Once they do, they're easy targets for competitors, who quickly discover and counter them. The real action lies with small ideas. Abundant as well as proprietary, they amass into a powerful competitive advantage.

MYTH #2: Managers are in the best position to come up with ideas.
Reality: Because they're the ones actually doing the day-to-day work, employees are in the best position to come up with ideas. They know firsthand what's working and what's not, and they see all kinds of ways to improve performance, from simple, common-sense ideas for saving time and money to entirely new ways of doing business.

MYTH #3: Managers should promote big ideas because little ones aren't worth the time.
Reality: Small ideas enable companies to pay exceptional attention to detail--the absolute requisite for true excellence. They also have a big, cumulative impact and are often the best source of big ideas.

MYTH #4: Without rewards, workers won't offer ideas.
Reality: Workers offer ideas because they see problems and opportunities their bosses miss. They want to make their work easier and help the company do better. So their best reward is support and recognition--to see their ideas in action and be acknowledged for them.

MYTH #5: The best way to encourage ideas is to offer rewards based on the value of the ideas.
Reality: Most companies that offer rewards for ideas get into big trouble. The most common scheme--offering a percentage of the value of an idea--backfires in all sorts of ways, often with dishonesty and fraud. The world's best idea systems offer no rewards for individual ideas.

MYTH #6: An informal approach to getting ideas works best.
Reality: Without a formal process for handling ideas, managers and workers face the nuisance of figuring out how to deal with each idea that comes up. A clear and simple system for attracting, evaluating, and implementing ideas is most effective and consistently leads to more ideas.

MYTH #7: Suggestion boxes are a good, time-tested idea.
Reality: Suggestion boxes don't work. While they've been the method of choice for seeking workers' ideas for more than a hundred years, they're a bad process that yields even worse results.

MYTH #8: Creativity training gets more and better ideas from workers.
Reality: Most ideas are simple, common-sense responses to problems and opportunities. Until a company can capture workers' everyday ideas, creativity training to trigger more ideas is a pointless and costly exercise.

MYTH #9: Along with good ideas come a lot of bad ideas that waste managers' time.
Reality: There's no such thing as a bad idea. That's because bad ideas, given in good faith, are powerful tools for identifying gaps in workers' knowledge or skills. Also, bad ideas are often poor responses to real problems, which help managers see and address difficulties.

IDEAS 101

While there are some 101 ways a manager can encourage ideas, here are 10 just-do-it tips for getting started.

1. Just ask. Ask employees to come to department meetings with one small idea for making their work easier or helping the company in some way. Have people present their ideas, then invite the group to discuss and build upon them. If an idea is worthwhile, come to an agreement on who will be responsible to make it happen.
2. Look for big opportunities in small ideas. Be open to broader implications. If a small idea is pointing to larger issues, work with employees to explore and address them.
3. Pick on problems. Ideas arise when people collide with problems. Ask employees to single out what makes their work difficult--from procedures that waste time or money to policies that disappoint customers. Then work toward solutions.
4. Turn complaints into opportunities. When an employee complains about something, look for the underlying issue or problem. Turn gripes into opportunities by asking for ideas that tackle them.
5. Seek ideas at times of change. When a change is announced or anticipated, encourage employees to look for emerging problems and opportunities and to offer ideas that address them.
6. Follow through. Follow through in some way on every single idea without exception. Keep track of ideas as they come in with a pocket-sized notebook or PDA. And remember that the best reward for workers is to see their ideas in action.
7. Address bottlenecks, if an idea is stuck, figure out why. Is someone sitting on the idea? Is a policy or procedure holding it up? Work with employees to get to the bottom of the bottleneck and turn things around.
8. Nurture that first idea. Give extra attention to a worker's first idea. If it isn't ripe with immediate possibilities, explain why--thoughtfully and diplomatically--then explore the potential together.
9. Create heroes. Recognize people for their ideas. Be sure employees get full credit for their contributions, singing their praises in ways that are personally meaningful, from congratulatory e-mails to casual celebrations over bagels or pizza.
10. Recruit the boss. Promoting ideas is a lot easier with the boss's support. Bring good ideas and good results to his or her attention.

Final thoughts

Despite the heroic lore of invention, a big idea rarely comes in a single, flash-of-brilliance moment. It starts as a smaller idea that requires exploration and development. And every big idea requires lots of small ideas, not only to develop it into a workable solution but also to exploit its potential fully. Often the only sustainable advantage a company realizes from a major new innovation comes from the hundreds or even thousands of smaller ideas associated with it that really make it work, build upon its capabilities, and truly integrate it into the organization. If the managers in your organization are incapable of listening to and acting on large numbers of small ideas, it simply cannot achieve excellence in performance.

And remember, the people in the best position to come up with all of these small ideas are the people directly working with the problems every day--your front-line employees. They can make you look very good if you only let them. And best of all, their ideas are free. People have lots of ideas and want to share them. They don't need to be bribed. They want to solve problems, make their work easier and more productive, and be part of a winning team. The biggest reward you can give them is to listen to their ideas, take them seriously, and use the good ones.

Alan G. Robinson is an award-winning consultant, author, educator, and LEAN Affiliate focused on corporate creativity and idea generation processes. He has advised more than a hundred companies in eleven countries, including: Alcan, Blue Shield of California, Bose, Hardigg Industries, Heineken, The Federal Reserve Bank, The Japan Industrial Training Association, Labatt, Lucent Technologies, Medical Mutual Liability of Maryland, Medtronics, Millitech, Standard and Poors, Toyota, UBS, and Volkswagen.

His award winning book, Ideas Are Free: How the Idea Revolution is Liberating People and Transforming Organization, lays out a proven blueprint for a corporate idea process - from inspiration to implementation, along with some unexpected caveats (e.g., rewarding ideas tends to stifle them as people focus on the award rather than on the idea, and small ideas—leading to continuous, incremental improvement—are more valuable than large ones). His 1998 book Corporate Creativity: How Innovation and Improvement Actually Happen (co-authored with Sam Stern) was named "Book of the Year" by the Academy of Human Resource Management, was a finalist in the Financial Times/Booz Allen & Hamilton Global Best Business Book Awards, and has been translated into thirteen foreign languages.

Dr. Robinson is on the faculty of the Isenberg School of Management at the University of Massachusetts, and serves on the Board of Examiners of the United States' Malcolm Baldrige National Quality Award. He received his Ph.D. in applied mathematics from the Whiting School of Engineering at Johns Hopkins University, and a B.A./M.A. in mathematics from the University of Cambridge.

He lives in Western Massachusetts with his wife and two daughters.