Every day, front-line employees see many problems and opportunities that their managers do not. They have plenty of ideas to improve productivity and customer service, to offer new or better products or services, or to enhance their organizations in other ways. But their organizations usually do better at suppressing these ideas than promoting them.
Managers often wonder how big an impact a high-performing idea system can have. Is building one really worth the time and effort involved? We have studied idea-driven organizations that operate high-performing idea systems all over the world. By “high-performing” idea system we mean one getting twelve or more implemented ideas per employee per year, or one per person per month.
But every one of these organization also improves its performance through management-driven actions as well. And when organizations measure the effect of both their management-driven initiatives and the front-line ideas they get through their high-performing idea systems, the data is surprisingly consistent: 80 percent of bottom-line impact comes from their idea systems, and only twenty percent from management.
But most organizations have largely ignored the enormous resource of employee ideas. Either their managers do not realize the power in employee ideas, or they have never learned how to tap this power effectively. So for them, it’s all about the potential improvement available to them.
The 80/20 principle of improvement is this: Eighty percent of an organization’s potential for improvement lies in front-line ideas. This fact means that organizations which are not set up to listen to and act on front-line ideas are using at best only a fifth of their improvement engines. When managers gain the ability to implement twenty, fifty, or even a hundred ideas per person per year, everything changes.
Idea-driven organizations have many times the improvement and innovation capability of their traditional counterparts. If you learn how to tap the ideas of your front-line workers, you and your employees will thrive in environments where you once would have struggled to survive.
