Toyota is the poster child for employee idea programs, you could say they were one of the main players who took the trend mainstream all the way back in the 1950’s as part of the “Kaizen” movement.
Their employee suggestion program, known as the “Creative Idea Suggestion System,” has been effective in generating significant annual savings for the company, and the value of ideas shared has accumulated into the billions of dollars over the decades since the programs founding. Toyota’s suggestion program encourages employees to contribute ideas that improve processes, enhance product quality, and reduce costs.
A Few Crazy Stats About Toyota’s Suggestion Program
- As of their last public report in 2011, the program has received over 2,000,000 ideas for improvement and on average sees 250,000 new suggestions per year.
- Their suggestion program has been continuously live since 1951, which is over 73 years!
- The program has a 70% adoption rate in terms of participation across the organization, meaning that annually over 240,000 team members are involved in sharing or implementing new ideas.
These are statistics that I’m sure everyone reading would be head over heels to achieve, so today we’re going to dive into a few of the best practices that Toyota attributes to the programs long-term success, and explore how you can incorporate them into your practice.
5 Best Practices You Can Learn from the Success of Toyota’s Employee Suggestion Program
There are several best practices that Toyota has implemented with their frontline suggestion program which are common traits we see at Ideawake that successful employee suggestion programs –
- Incentives for Sharing Ideas: Toyota’s suggestion program offers monetary incentives for valuable suggestions. The rewards can range from small amounts for minor improvements to large bonuses for major innovations. The company also focuses on personal recognition for contributions just as much as monetary rewards, doing shout outs for employees on a weekly basis for new, valuable suggestions that are shared.
- Involving Employees in Idea Implementation: Employees are given a lot of autonomy in implementing the ideas that they share. Toyota designed their process to present minimal barriers in order to get quick win ideas implemented. Note that ideas that require technical complexity or impact multiple functional areas still need to go through additional approvals, but the simple ideas are often owned and implemented directly by the team member who shared them.
- Removing Red Tape for Quick Win Ideas and Providing Autonomy: One of the biggest mistakes we see companies make is requiring all ideas to go through the same process and receive approval at way too high of a level to get implemented. At Toyota, if the idea is simple but valuable, they often only need to get approval from a direct manager to implement it. This makes the process much faster and speeds up the positive reinforcement loop, encouraging employees to share more ideas, and drastically reducing the administrative overhead associated with the program.
- A Focus on Small “I” vs Big “I” Innovation: We’ve covered this in several posts in the past (Costco, ExamOne). A common theme of companies with the most successful employee suggestion programs in terms of hard dollar ROI is that they are focused as much on “Horizon One” innovation as the are on disruptive or transformational innovation. Leadership Teams often dream of creating the next iPhone, but innovation is a muscle that needs to be built up over time and proper resourcing to build truly “transformational” innovation is something that’s going to require more than the budgeted time of 1 to 2 FTE’s. What we’ve found works best to get actual financial impact out of your employee ideas program while also helping maximize cultural impact in the short and mid-term is focusing on “Quick Wins” which are easy to implement and have a measurable financial impact.
- Creative Thinking Committees (Using Challenge Statements): Creative Thinking Committees are established at the regional level and are responsible for creating “themes” to promote to frontline staff to share ideas around (In Ideawake lingo, we call these Challenge Statements). By setting these committees up at the regional level, different areas are able to more effectively promote topics that are important to them, driving more value from the suggestions they’re receiving and increasing the likelihood that they are aligned to that regions biggest pain points.
Implementing an Employee Suggestion Program Like Toyota’s Isn’t Rocket Science
Don’t doubt the potential of the ideas from your employees to be substantial contributors to your organizations bottom-line. The best practices we covered today aren’t ground-breaking ideas, and those of you with active programs have likely already thought about each of these or discussed them internally more than once.
If you’re not collecting and encouraging employee ideas today, what opportunities to save money and improve customer experience could your organization be missing out on? Schedule a 30 Demo Today to learn how your organization can start leveraging the ideas of frontline team members in the next 2 – 4 weeks.