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The urge to stifle creativity

Some companies have a culture of ideas. But for many others, it’s more like a culture of bacteria.

Egos get in the way, or the ideas get buried in bureaucracy, making workers believe that offering a suggestion is more frustrating than rewarding. And even if companies do reward ideas, the system often backfires, said Alan Robinson, co-author of "Ideas Are Free: How the Idea Revolution Is Liberating People and Transforming Organizations” (Berrett-Kohler).

Dave Murphy
Saturday, May 1, 2004
San Francisco Chronicle

http://sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2004/05/01/BUG0O6E1911.DTL&type=business

In their book, based on their work with more than 300 companies, Robinson and Dean Schroeder explain how companies that welcome employee ideas can thrive.

Connecticut publisher Boardroom Inc. averaged 104 ideas per employee in 2002, and its sales per employee were more than seven times greater than the average publisher. Britain’s Richer Sounds, also known for its idea system, has been listed repeatedly in the Guinness Book of Records for having the highest sales per square foot of any hi-fi retailer in the world.

"Organizations that are successful at getting ideas monitor which employees are turning them in, which managers are getting them, and how rapidly they are acted on," the authors write.

"Employees and managers are given appropriate training and support, and then held accountable for their roles in the idea process. Coming up with ideas is made a central part of the employees’ work."

Robinson said in an interview that although rewarding good ideas can encourage workers, there are several potential pitfalls in basing rewards on how much the idea will earn or save:

— The amount is difficult to calculate. Robinson recalls how one employee believed an idea was worth $6 million, but the company put the figure at $600,000. Discrepancies like that lead to bad feelings instead of good ones.

"It’s just very time consuming to calculate what an idea is worth," Robinson said. "You create a need for a bureaucracy."

— Smaller ideas get ignored. In such a bureaucracy, small ideas aren’t worth the hassle. So ideas that might save time and money, as well as improve morale, get discarded.

— Good ideas are rarely implemented by just one person. Others who help along the way are ignored by the rewards system. And people don’t collaborate, because they’re afraid colleagues will steal the idea.

— Executives can be reluctant to provide huge rewards because they’re embarrassed that the idea didn’t come from management.

The authors describe how the chief executive of an unnamed European wireless communications company sat on an idea from an employee for years that pointed out how the system was failing to bill customers for at least $26 million a year in international calls.

That’s because the employee’s reward of about $13 million — half the first year’s savings — would have embarrassed the CEO, drawing attention from the company’s board of directors and the news media.

Robinson said it’s better to create a bonus pool for people who contribute to ideas during a certain period, such as monthly or quarterly.

"As long as you did something to move the company forward, you share in the reward."

On the Fringe runs Saturdays. E-mail Dave Murphy at [email protected].

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