Innovation & Growth
Prof. Isaac Getz
ESCP-EAP European School of Management
Paris-London-Berlin-Madrid-Torino
getz@escp-eap.net
© Isaac Getz, 2008
Idea Management
1
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
SAS revenue ($ billions)
2006: $1,9 billion
10000 employees
2
1,8
1,6
1,4
10,000 customers in over
100 countries; 97% of
Fortune 100 — customers
1,2
1
0,8
0,6
0,4
0,2
0
98% of customers
renew licenses
© Isaac Getz, 2008
Idea Management
2
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!, 2007
Study: 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
Idea Management
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Innovating in the way
we do existing things
Finding a lost man in
A service representative’s idea
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
Idea Management
4
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
Idea Management
5
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
Idea Management
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Build a system that
enables all employees
to produce and act
on their useful ideas

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
© Isaac Getz, 2008
Idea Management
7
Performance of the world-class idea systems
according to the key measures • # ideas/employee
• % of participation
• % of implementation
Boardroom
104 ideas per employee per year
100 percent participation
Milliken France
54 ideas per person per year
88 percent participation
98 percent implemented
Dana Corporation
(including DCC)
26 ideas per employee per year
95 percent implemented
Toyota Kentucky
21 ideas per employee per year
99 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
=
Idea Management
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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
Idea Management
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© Isaac Getz, 2008
Idea Management
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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
Idea Management
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Recognition
For every idea in Japan Airlines :
A Beer Voucher
© Isaac Getz, 2008
Idea Management
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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
© Isaac Getz, 2008
Idea Management
13
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19 September 2007 | Slide 14