The ideas Factory

The first known suggestion scheme came from the British Navy in 1770. It allowed Jack Tar to voice his opinion without being hanged for contradicting his superiors. Since, however, the majority of sailors were illiterate, it was probably of limited effectiveness. Today, most factories have some sort of suggestion scheme. For something so innocuous, they excite some pretty strong opinions. Take Martin Gummery, MD of business improvement consultancy Newleaf: "The traditional suggestion scheme is a barrier to creativity and an abdication of a manager's responsibility. It's a cultural change that is needed, not a task-type process." Or Andrew Fraser, MD of change management consultancy Reliable Manufacturing: "Suggestion schemes all too often fail to deliver the results they are intended for. Introduced as a quick-fix solution or without proper thought, they can end up doing more harm than good." Then consider the other side of the picture: Aimia Foods in Haydock has saved over £300,000 in one year through innovations generated by its suggestion scheme; and the SCA paper mill in Skelmersdale implemented over 600 ideas last year, each qualified by a clear ability to make the operation better, cheaper or faster. So are the critics wrong? Or are Aimia and SCA just doing something different with them? Let's hear the objections first. Gummery discourages client companies from taking them on. The initial response is good, the forms are completed and the boxes fill up – and are promptly passed to unsuspecting first or second line managers. They set up judgment criteria often so unclear or rigid that they actually inhibit creativity. And inevitably, it's down to the manager to turn ideas into action which – on top of their normal workload – becomes overwhelming so the forms gather dust. "People get to the stage where they can't be bothered," he says. "How do you stop someone from being creative? You don't feed back and you never let their ideas see the light of day." Fraser believes the people closest to the problem are, with encouragement, also the ones most likely to provide the solution, but he is clearly unenthusiastic about suggestion schemes' ability to achieve that: "They often breed a culture of individualism, particularly if the scheme is structured to reward the individual. When employees are encouraged to submit ideas incentivised on their own personal gain, companies run the risk of internal competition and neglect the idea of people working harmoniously for the good of the company. If you do offer a financial reward for good ideas, it should be linked to the overall performance of the business unit. This way staff are not motivated by personal reward, but instead focused on the success of the company. Do not forget also, the simplest form of recognition is often the most appreciated; to say thank you." I'm not sure about that latter point. The ability to say thank you is as important to good management as any technical skill. But I doubt the person who won the new car at Aimia this year would prefer the words to the hardware. Nonetheless, having seen failed schemes in so many companies, Gummery and Fraser both have good insights into potential alternatives. First, Gummery: "Instead of a process where operators are expected to come up with ideas as an extra to their jobs, there should be a basic expectation that people have a continuous improvement (CI) mentality within their job." Rather than relying on a box, his company advocates fostering ideas through team meetings and one-to-one conversations. Managers tease out improvements by talking to operators, understanding the issues, asking if they have any solutions of their own, and calling short, problem-solving workshops for everyone involved. "Instead of sorting through paper suggestions, you can work the yes/no process in the meeting," he explains. "'What do you think of this idea, Jim?' 'Will it work, Sally?' You facilitate them to encourage the suggestions and to test their value. Then you can ask 'Shall we try it?' and 'Who can take that on?'" Reliable Manufacturing still uses a form of suggestion scheme but in open forum as part of the wider change process of defect elimination. "In determining what to improve, it is essential to create the right environment for people to talk openly about their frustrations at work," explains Fraser. "It is far easier to make lots of small improvements than to find one magic bullet." Different direction How does this play in practice? Let's look at two very different interpretations of these schemes. Swedish-owned SCA Hygiene Products, which operates five paper mills in the UK, is so convinced of their value to its overall CI process that every employee is expected to generate and implement at least six improvement ideas a year. Mark Mannering, site manager of the SCA mill at Skelmersdale in Lancashire, explains it's not an add-on to their job like voluntary suggestion schemes but a central part of the designated role of 184 site employees. Critics maintain that setting targets generates more volume than value – but clearly not in this case. The number of ideas implemented is rising steadily – 605 in 2010 and 645 last year – each of which meets strict improvement criteria. The majority bring improvements in areas like workplace organisation and health and safety, but around 20% lead to real cost savings. For instance, by questioning the amount of waste generated when mother reels of paper were being changed, two operators found ways of saving 390 pallets or eight wagon-loads of product a year. Not only was it worth tens of thousands of pounds, but it also made a more sustainable operation. Mannering sees clear advantages over traditional schemes: "For employees, it provides ownership and accountability of their idea through to completion. It's changed from a top-down to a bottom-up process and employee opinion surveys have shown how good for morale that is." To him, the most important factor is ensuring people who came up with the idea also put it into action, either individually or as part of a team: "This fosters engagement and pride in their success." The emphasis so far has been on people moving away from traditional schemes because they become administrative burdens or just plain not in tune with today's CI culture. Before chucking them in the bin with quality circles and other treasured industrial relics, however, let's take a look at a company that has not only made an old technique work, but has made it sing. Aimia Foods has said "yes" to the paper, the pencil and the box outside the canteen – and a resounding "no" to the huge creaking superstructure that has sunk so many other schemes. Its manufacturing credentials are beyond dispute: it has a string of awards to its name including Best SME in 2011's Best Factory Awards. The thirst for improvement is already embedded in its culture. So why on earth does it even need such a scheme? "It's second nature for our people in operations to come up with ideas," explains production manager Geoff Evans, "but at one stage it almost looked like they were drying up. They weren't – they were just being fed into our operations without being captured. We wanted to record them to show the steps in our progress. I think it's a shame if companies don't want to brag about their good ideas. It's not what we're about – we pride ourselves on our unique culture and support it through reward and recognition. We let our people know we appreciate them." The scheme is simplicity itself: anyone can nominate anybody for two quarterly awards, one for innovation and one for an outstanding contribution. Each wins cash and is eligible for entry into the overall annual award, which gives serious prizes to the category winners and the new car for the overall champion. The administration is even simpler. HR takes the brunt of first sifting through the paper submissions – uncomplicated descriptions on a standard pad, kept deliberately basic so they don't put off people who don't express themselves easily. The nominee will make the in-depth case later in the process. This is where the scheme gets clever. The whole process relies on a support mechanism that gives the 'suggestors' back up, coaching and extra skills when they need them, but still leaves them the onus of proving the value of their work, working out how to implement it and showing the payback. If HR people are uncertain, they get a second opinion from those with detailed knowledge. Remember this is still a company of fewer than 250; people talk about problems across departments and recognise a promising fix. But a few five-minute phone calls to Evans or Colin Watts, Aimia's Six Sigma facilitator, are a lot less arduous than dumping the whole box on one hapless manager's lap. Watts' role is vital. The next stage is a presentation to a panel that includes Rob and Jackie Unsworth, founders of the business, the sales director and ops director Patrick Mroczak. It's informal but intimidating for some. Watts is there to coach if he's needed, to help pull together the financial justifications, OEE savings and to advise on the presentation of a well-rounded concept. The concept of mutual support is so deeply ingrained in Aimia's culture that often questions will be ironed out in advance of the first pencil mark on the pad. For example, before floating an idea about packing, the suggestor had enlisted Watts' help to assess its feasibility with planning and marketing. The input came back within an hour – people across Aimia take this process seriously and generously. It is universally accepted that if ideas are not explored properly, people will become less creative and the business will ultimately suffer. Aimia has found a way of managing the scheme with minimum pain and maximum benefit. It gets 60-80 submissions per quarter of which 10-12 go forward. There's no target number. "If the flow started drying up, we'd look at a different way of doing things," says Evans, "but it's ingrained in our culture so we don't need to formalise it." The beauty of the scheme is that it dovetails neatly into Watts' day job. By coaching suggestors for the ideas presentation, he is also supporting them along the CI path. And there have been stunning results. Take just one. Aimia's dedicated co-packing facility stopped its line for 2-3 minutes every hour to carry out a check on the functioning of metal detectors. In a plant running at 360 cartons a minute for 24 hours, 5-6 days a week, it was a massive amount of downtime. Barry Evans' solution was elegantly straightforward: an imitation credit card with a metal check piece inserted in a highly visible plain white carton, fed along the line once an hour. The line needs to stop only if the Judas carton is not immediately rejected – but it always is. The saving is over £83,000 a year. There are many more examples like this, nominated as simple outline concepts and carefully nursed into fully-fledged and costed innovations that are still proudly known by the name of the originator. 'Barry's Credit Card' is likely to be part of the Aimia mythology long after his retirement – a tribute both to him and to the scheme that fostered his idea. Making ideas work "The value of an idea lies in the using of it." Thomas Edison

• Make it easy to offer suggestions and provide feedback to everyone who does.
• Evaluate ideas swiftly and only ask for them if you are willing to implement them.
• Engage employees in the improvement process which will encourage them to generate ideas.
• "Individuals need to feel a sense of ownership and control over the processes, not least because people tend to own what they create," says Reliable Manufacturing's Andrew Fraser. "When used as part of a wider cultural shift, suggestion schemes can be a great way to engage people, eliminate defects, and moreover deliver performance results that last."