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Thursday, July 08, 2004
Small Ideas, Big Effect
Innovation, today, is in bold capitals. With a good idea management system, growth of an enterprise can be greatly enhanced. In today's ever-changing environment, no enterprise can afford to stand-still. Only Innovation and Idea Management can guarantee the maintenance of a firm's competitive ability. The main aim of an idea management system is to guarantee that all submitted ideas are examined quickly and converted into tangible products/services, if necessary and relevant. In order to communicate its value clearly, the idea management system needs to be integrated by the firm's management with the strategy of the organization.

Although there is no ideal model, which could serve equally for all enterprises, efficient idea management processes should have the following characteristics:
- idea management should be supported actively by the management.
- it should not cause additional bureaucracy, and if possible, it should use existing operational structures and resources.
- ideas should be encouraged within the organization among all departments.
- idea submission should be simple and everyone should be made aware of the process
- the decision-making process, which decides the fate of the idea should be efficient and effective
- the process of idea conversion into tangible products/services should involve the author of the idea
- ideas that have been converted should be examined for additional potential - Where can they still be meaningful? Which aspects can be developed further?
- all the people involved in the process from start to finish should be acknowledged and successes should be celebrated together
- the results of the idea management system should be measured constantly, improved and communicated throughout the organization

Each implemented idea enables growth of an organization in many ways:
- time
- money
- simpler methods of doing something are discovered
- efficiency and effectiveness increase
- quality improvements

Although "big" ideas seem to have a magnetic effect on managers, modern idea management should be implemented in such a way that small idea submission is maximized. Reasons:

- often small problems at work and in the environment are observed firsthand and since these problems affect employees directly, finding possibilities for improvement becomes a personal goal
- small suggestions allow for the whole system to be measured and optimized further.
- conversion of small ideas usually takes place fast and directly via the idea carriers themselves
- compared with "big" ideas, small ideas are mostly very specific and cannot be copied.
If for instance the productivity of a machine is increased - owing to fifty small ideas - by 30 per cent, a competitor will hardly be able to achieve the same condition
- a cumulative use of many small ideas has a substantially stronger effect than that of a few large ideas.
- when an organization gets many small ideas, it increases the possibility of creating optimal conditions for an improvement culture which then becomes open to all kinds of ideas (also for the "big" ones).

Ideas have value only if they are implemented. The stages that an idea passes through can be listed as under:

- an idea is suggested
- discussions with colleagues allows for further refinement and development of the idea
- presented to the management
- at this stage the idea maybe accepted or rejected
- an accepted idea is further tested and refined if necessary
- the tested idea is converted
- the effect of the converted idea is measured
- the results are communicated

Although all stages mentioned are important, many enterprises in the German-speaking countries reward only the first step with a premium. It would not be surprising that such companies do not receive many worthwhile ideas. Why would someone invest time in the idea-conversion process when the reward is only for idea submission?

Such premium systems have a further disadvantage: the computation of the usefulness of an idea, which is necessary for the definition of the individual's reward, needs time and resources and does not bring genuine increase in value to the organization. There is a fundamental difference between monetary premium and acknowledgment. It has been determined again and again: Ideas bring money, but money does not bring ideas.

The idea management system of each enterprise can be examined and developed further with the help of the following indicators:

1. Quantity of the submitted ideas: the number of ideas per head and per week, per month, per quarter, per year and the percentage of the ideas, which were converted.
2. Origin/Source of the ideas: the number of ideas per department, per function, per branch.
3. Speed of the system in providing feedback for an idea. (Good idea management systems take a maximum of five days). Also, "How long does it take, until an idea is converted?"

(Source: in German, HR-Today here.)

posted by Naina @ Permalink 7/08/2004 12:00:00 AM   0 comments  --- Google It! ---
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