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The Journey to a Learning Organization:
an Interview with Industry Thought Leader Norman Bodek
Each year, Toyota’s employees implement 1.5 million ideas that save the company over $300 million annually. Inspired by this a decade ago, the Chairman and CEO of Dana Corporation asked his 80,000 employees to submit two creative ideas per month and implement 80% of them. A cultural transformation began, and for over ten years Dana’s employees implemented about 2 million ideas per year, saving over $2 billion. Beginning in 2001 by using the same process, Technicolor in Detroit with 1,800 employees generated 20,000 ideas, implemented over 12,000 of them, and saved the company over $10 million within a year.
How did Toyota, Dana, and Technicolor achieve this level of employee innovation? How did they avoid the administrative burden of reviewing, approving, and implementing all of these ideas? Can your company also leverage employee innovation to create a culture of continuous improvement and achieve competitive advantage?
Teaching American companies how to capture employee innovation is the passion of Norman Bodek. Norman calls the process “Quick & Easy Kaizen”, and LEAN Affiliates recently interviewed him about Toyota’s secret, and his work to cultivate employee innovation for American business.
Tell me how Toyota harnesses their employee’s ideas.
BODEK: The average worker is filled with thousands of improvement ideas that are rarely tapped into. It’s like sitting on top of a gold mine feeling poor. Instead of waiting endlessly for new ideas to come out, you simply have to bring the suggestion box to the worker. Ask them for their ideas, listen to those ideas, and then help them implement those ideas.
Woody Morcott, who was the former Chairman and CEO of Dana Corporation, saw what was being done in Japan, brought the system back to America, and got the same results. In fact, one Dana plant was getting as high as five ideas per worker per month. Also, the participation rate is very high- over, 90% of employees contribute suggestions. At Dana, almost everybody participates, even the Chairman of the Board.
Those kinds of numbers astound me. I'd expect perhaps a 10% implementation rate and a 5% participation rate in a suggestion program.
BODEK: Let me tell you a bit about the history of suggestion systems. In 1898, Kodak came up with the first suggestion system: the first suggestion was, "clean the windows". That’s a very simple suggestion but it was important back then because lighting wasn’t so great. The manager thought it was a great idea and he got people to clean the windows. Well, as the suggestion system grew, lots of ideas came but they put a tremendous burden on management because the worker would come up with ideas for somebody else to do. The manager would say, “Look, I have enough things to do. I just can’t handle all these little things".
Managers don’t want to spend hours reviewing and approving suggestions. It seems that most suggestion programs we see die under their own administrative weight.
BODEK: Let me start by making a distinction. We’re not looking for suggestions because normally suggestions are for other people to do something: "I have a great idea for somebody else!" We are talking about a fundamentally simpler method where 80%-90% of the time, the person who comes up with the idea implements it. Japanese companies using this system get on the average twenty-four improvement ideas per worker per year.
How else does this differ from the typical suggestion program?
BODEK: Most companies are only looking for big cost saving ideas. Often they'll give the worker a monetary reward if the suggestion is accepted and reduces costs. The Japanese, who we thought copied everything at the end of World War II, copied this approach. Then, about 1970 they started worrying that the suggestion system didn’t involve all of the employees. (In fact the last statistic I heard is that, in America, companies get one idea every seven years from the average worker. That's pitiful, that’s not involvement.) So the Japanese made a shift, went back and studied Kodak, and re-invented the system to get broad worker involvement.
How do we make this more of an employee involvement process, one where people wouldn’t be afraid to come up with improvement ideas?
BODEK: Let me give you a specific example of what happens on the shop floor. Imagine there's one machine tool where oil is being sprayed all over the place. The worker suggests to the supervisor to put a hood over it. If it's a good idea the worker does it. It's as simple as that.
If it’s not a good idea, the supervisor must be very supportive. In fact, instead of rejecting or criticizing an idea, the best approach is to turn the issue over to a team to try and make the idea better. Very often people think of black and white dichotomies and it doesn’t have to be that way. Somebody gives an idea, and even if it’s not workable, you can say, “This is a really good attempt to solve the problem. Let’s take the time to rethink it, let’s look in a different direction”, and often you can find a different solution. You have to handle a rejected idea very carefully.
Give me an example of the kind of ideas you get from workers.
BODEK: In one case an index box was leaking oil, so the worker removed the drain plug, replaced it with a nipple and drain hose, and connected it to a waste oil jug. Oil no longer ended up on the floor, eliminating a safety hazard. As a result, according to Jack Simms, idea manager at a Dana plant with 650 employees, last year there wasn’t a single lost time accident- the prime reason was an effective idea system.
If I’m a CEO and I hear about this, I think, “Well that's good”, but I’m not very excited about leaking oil.
BODEK: But you should be excited that your employees are getting involved and making improvements. It’s these small ideas that really add up to something big. The wonderful part of this is not the one case of fixing the index box, it's that you’re creating a system where workers are making continuous improvements. It's the old story of the tortoise and the hare: while the hare slept at the side of the road, the slower turtle just inched, inched, and inched ahead and won the race. We want very small continuous improvements in this system to make our plants sparkle, to be happier on the job, to be the most efficient in the world. And we want everybody involved doing it.
But shouldn’t we focus on transformational change- something revolutionary like Dell's manufacturing system. Why spend time on small ideas?
BODEK: Radical, transformational change to your business processes is a vital role of management. With Quick & Easy Kaizen, we empower all of your other employees with an equally vital role- sustained, continuous improvement of existing processes. We don’t just want the brilliant idea from Michael Dell. We also want ideas from the thousands of people who work at Dell. The person doing the work is the real expert- they know their job the best. Yet rarely does anyone ask them how to make improvements on a sustained basis.
Tell me how this system actually works.
BODEK: The employee with an idea fills in a very simple form. The form simply asks you to state the problem and the solution. In some cases, it will be so simple that you don't need any kind of approval. In other cases, you would take the problem to your manager and talk about the idea. Then you would implement the solution and write down the effects on the form.
The next part is important: they put the form on a bulletin board where everyone can see it. Once it goes on the bulletin board people say, “Look at the idea Joe came up with, I can do the same thing." Then once a day the manager of the idea system—or in many cases it’s the plant manager—comes by, reads all the ideas, talks about them, gets the worker some help, if necessary, to install the idea, and puts some of them in their newsletter. At the Dana plant, teams meet for thirty minutes every week and primarily they are looking at these ideas that people came up with.
So even if your idea was just moving a bucket you'd write it up and stick it on the bulletin board.
BODEK: Yes. First of all it’s a reinforcement and recognition for what you did. You are doing something beyond the call of duty; you are doing something beyond what you call your normal job. And you are getting recognition for this. The boss should be trained to praise and compliment you for your extra efforts. You are also sharing it with your peers in the company and if someone copies you isn’t it great flattery?
This program has to have a champion. At Dana and Technicolor it's often the plant manager.
That gives us a sense of the significance of this program. How do employees react to this?
BODEK: I've gone through so many plants, especially in Japan, and I talk to workers and say, "What ideas did you come up with?" Just look at their faces. Look at the sparkle in them.
How does Quick & Easy Kaizen motivate employees to be involved?
BODEK: The best way to get people involved is through their own improvement ideas. People want to be involved in improving quality, lowering costs and making the workplace safer. We want people’s attitudes to change. Well how are they going to change? By putting up signs on the wall? The way you change people’s attitudes is by giving them a chance to grow and learn new skills. You give them a chance to really get involved in the company. Today there’s so much fear- everyday we read about tens of thousands of people being laid off. We have to change that and one of the ways we change that is by harnessing the innovation of every employee.
What do you look for while assessing how well a company nurtures employee innovation?
We look at a few key indicators: Is employee innovation measured? If so, what’s the employee participation rate? How many ideas are generated? What’s the idea implementation rate? Are ideas and results documented for the benefit of others?
Does my management team really need help while implementing a “Quick & Easy Kaizen” system?
BODEK: The Quick & Easy Kaizen process is elegant in its simplicity, yet requires employee involvement that hinges on management support and encouragement. This process will NOT work in an environment of fear, broken communication processes, or aloof management. Without encouragement and inspiration on a regular basis, employees will not implement improvements on a sustained basis. How your management team is trained and coached to encourage employee participation is critical. Having an outside coach who’s been through this before can accelerate your time line to results, and help avoid damaging missteps.
Any closing remarks for us?
BODEK: Management must ask, how do we inspire people to be better, be happier on the job, and how can we help people improve their skills? What better way is there than to get creative ideas from people to make improvements?
We have learned about Lean manufacturing and a lot from the Japanese, but what we’re missing in America is an effective idea system. Toyota says the most important part of their manufacturing process is the ideas which come from their workers. Just imagine, last year Dana got two million improvement ideas. Even though they’re small ideas, collectively they represent millions and millions of dollars saved.
To discuss how to harness your employee’s creativity to enable a culture of continuous improvement and achieve competitive advantage, contact LEAN Affiliates at 214-739-6122.
Norman Bodek is the former CEO of Productivity Inc. – Productivity Press, and was recently called Mr. Lean in Quality Progress magazine. He was instrumental in finding, translating, and publishing over 200 books written by the great manufacturing geniuses of the past thirty years who brought us The Toyota Production System, lean manufacturing, and Total Quality Management (TQM). He’s the author of hundreds of management articles and three new books: The Idea Generator, Kaikaku: The Power and Magic of Lean, and All You Gotta Do Is Ask (early 2005). His writing reflects his passion for helping companies harness the creativity of their employees to achieve competitive advantage. Today, Norman is President of PCS Inc. and also a LEAN Affiliate. You may learn more about Norman Bodek and his recent books at: www.leanaffiliates.com/idea_generation.htm.
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