© Isaac Getz, 2008 1 Idea Management Innovation & Growth Prof. Isaac Getz ESCP-EAP European School of Management Paris-London-Berlin-Madrid-Torino [email protected]

© Isaac Getz, 2008 1Idea Management

Innovation & Growth

Prof. Isaac Getz

ESCP-EAP European School of Management

Paris-London-Berlin-Madrid-Torino

[email protected]


A 1 million € idea from an assistant who created

Academic Relations & Sales in France

A lot of frontline ideas in SAS Institute. For what benefits ?30th consecutive year

of 2-digit organic growth

and of profitability 10,000 customers in

over 100 countries; 97% of

Fortune 100 — customers

98% of customers renew licenses

0

0,2

0,4

0,6

0,8

1

1,2

1,4

1,6

1,8

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SAS revenue ($ billions)

2006: $1,9 billion 10000 employees


Why is the front-line employee’s spot

so unique for producing ideas for rapid innovation?

Because it is on the organization’s boundaries —the regions where it interacts with its clients, users, suppliers, partners, and competitors — where the change and problems first happen and are first felt. Getz & Robinson, Vos idées changent tous!, 2007Study: Some 80% of innovations come from people at least three levels below the top

management team Dauphinais & Price, Straight from the

CEO


Finding a lost man in A service representative’s idea

Innovating in the way we do existing things

A lot of customer care frontline ideas. For what benefits ?

• the US financial institutions’ N°1 in Customers advocacy rate: 87%• the US N°1 in BusinessWeek's ranking of Customer Service last two years• the US N°1 in respondents definitely recommending the company: 79%

• 400-fold increase in managed+owned assets in three decades with only a 7-fold increase of headcount

All that while limiting itself :• to 2-3% of the U.S. population for the sale of its principal financial products• refusing to sell through independent insurance agents• doing little national advertising


How did USAA change its employee attitudes from fear and inactivity to

action and innovation?

By engaging its frontline people to find solutions to customer needs — immediately.

Study : 68 % of customers are lost due to an indifferent attitude by employees

Chartered Insitute of Marketing


Are employees engaged in companies?

Study :

On the average, 27% of employees are engaged, 59% are not and 14% are actively disengaged Gallup, 2006

How to change employee attitudes from fear and

disengagement to innovation?


Idea = Problem/opportunity + Solution/action plan

Simple and rapid process handled by the direct supervisor

– Document every idea once it is implemented or its implementation started Track every manager’s/department’s idea performance with

a few key measures :– number of ideas – participation rate– implementation rate

Build a system that enables all

employees to produce and act

on their useful ideas


Performance of the world-class idea systems

according to the key measures • # ideas/employee

• % of participation

• % of implementation

Boardroom 104 ideas per employee per year100 percent participation

Milliken France 54 ideas per person per year88 percent participation98 percent implemented

Dana Corporation 26 ideas per employee per year (including DCC) 95 percent implemented

Toyota Kentucky 21 ideas per employee per year99 percent implemented$4500 in cost reduction per

employee/year

Best practices = > 20 ideas per employee per year> 4000€ of savings per employee/year

Average EU Practices ± 300€ > 90% of savings are wasted


Some « How » questions:

How many hundreds of “bureaucrats” run such a system?

How huge are the rewards a company has to pay in order to motivate its employees to produce so many ideas?

How do frontline ideas contribute to breakthrough innovation?

How can my company or organization obtain so many ideas?

…



How many raw ideas are needed to develop one product/service

that sells ?Development costs

Study: 83% of innovations originate with a client or a user.

E. von Hippel, The sources of innovation


Recognition For every idea in Japan Airlines :

A Beer Voucher


Conclusion: It’s not really about freeing

people’s ideas — It’s about freeing people’s talents and their action for

innovation and performance

I couldn’t sit on top and make all those decisions. I didn’t know how to handle them, even the typewriter. All services are delivered at the frontline so I would approve anything that made it easier for frontline people to deal with the customer. Automate, use technology to make it easier for people.

Give frontline people the opportunities to use their god given talents.

Top-down isn’t gonna get the right thing.

Robert McDermott†, USAA, CEO 1969-1993

19 September 2007 | Slide 14

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© Isaac Getz, 2008 1 Idea Management Innovation & Growth Prof. Isaac Getz ESCP-EAP European School of Management Paris-London-Berlin-Madrid-Torino [email protected]