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Transcript of © Isaac Getz, 2008 1 Idea Management Innovation & Growth Prof. Isaac Getz ESCP-EAP European School...
© Isaac Getz, 2008 1Idea Management
Innovation & Growth
Prof. Isaac Getz
ESCP-EAP European School of Management
Paris-London-Berlin-Madrid-Torino
© Isaac Getz, 2008 2Idea Management
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
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SAS revenue ($ billions)
2006: $1,9 billion 10000 employees
© Isaac Getz, 2008 3Idea Management
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
© Isaac Getz, 2008 4Idea Management
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
© Isaac Getz, 2008 5Idea Management
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
© Isaac Getz, 2008 6Idea Management
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?
© Isaac Getz, 2008 7Idea Management
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
© Isaac Getz, 2008 8Idea Management
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
© Isaac Getz, 2008 9Idea Management
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?
…
© Isaac Getz, 2008 10Idea Management
© Isaac Getz, 2008 11Idea Management
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
© Isaac Getz, 2008 12Idea Management
Recognition For every idea in Japan Airlines :
A Beer Voucher
© Isaac Getz, 2008 13Idea Management
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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