Creating a Suggestion System as Part of a Continuous Improvement Initiative

CREATING A SUGGESTION PROGRAM AS PART OF A CONTINUOUS IMPROVEMENT INITIATIVE

                               James Chapados, Kerry Desmond, and Christiana Schlett

Today, it is understood that achieving greater and more sustained levels of operational excellence is the result of embracing core principles of a continuous improvement culture. Operational excellence is the result of successfully adapting to the changes that continually occur in and around an organization. One continuous improvement strategy, the worker suggestion program, is often recommended to help companies tap into the unrealized potential of their workforce.

SUCCESSFUL SUGGESTION SYSTEM IMPLEMENTATION

Recent research on the effectiveness of continuous improvement initiatives has found that most companies’ efforts have limited success (Schonberger 2011) Why? Often it is because their leaders fail to commit to the principles necessary to create a resilient company in today’s volatile marketplace. These principles – focusing on the customer by adding value to products or services, creating a team-based culture, and using a rational, fact-based system for making change (continuous improvement) – provide the framework for ongoing organizational success. Instead of focusing on these principles, companies often mistakenly focus on using a tool box of techniques that others have created as a part of their journey. These tools, often taken from lean manufacturing or Six Sigma tool kits, can provide powerful results when properly applied. But unless they are part of a principles-based commitment to culture change, their impact will be limited in both scope and duration (Schonburger 2008).

As a method for productivity improvement or culture change, employee suggestion program success has been less than stellar. Research by Chart Your Course International (2009) of U.S. companies using suggestion systems found the following:

• The majority of companies have a significant disconnect between workers and managers. Only 41% believe their senior management supports new ideas.

• Most employees never see their senior managers, or if they do they find them inaccessible. Only 37% of employees think senior management tries to be accessible to employees.

• 60% of employees think their organization’s employee suggestion program does not exist or is ineffective.

Suggestion programs must be integrated into the fabric of worker development and support. The better the fabric reflects key principles of continuous improvement, the more effective the program will be. Senior Managers in  an organization can and should weave this corporate fabric (Gutter, 2012).

A successful suggestion system starts with a culture committed to building collaboration, teamwork and worker empowerment by focusing people on continuous improvement (Bodek, 2010 and Liker & Franz,2011). A company challenged in any of these three areas will have implementation problems.

Organizational collaboration exists when most tasks are designed to share responsibility and accountability between traditional divisions of authority and traditional levels of hierarchy. A dynamic structure is necessary for a suggestion system to be effective. Many suggestions will be cross-functional and their implementation will often involve people at different levels of organizational responsibility. Having to navigate suggestions through a traditional organizational structure complicates implementation. Traditional organizations that have been successful have had someone at a high level with cross-functional management responsibility leading the program (Liker and Meier 2007.Clorox Corporation has established a World Class Operations Group responsible for continuous improvement across all product groups. A part of its mission is worker empowerment.

Suggestions needing more than one person to implement add additional complexity. Teamwork, including the use of a group of people who are properly trained, led and supported, is necessary for a suggestion system to be effective. Two types of teams usually exist in a successful organization (Pascal, 2007). Semi-permanent teams are responsible for day-to-day tasks and the improvement of methods to fulfill those tasks. Temporary teams are created to address a particular challenge or opportunity. Both team types are necessary for a suggestion system to be successful. For those suggestions that do not easily fit into an existing team, a temporary cross functional/hierarchical team can be created to study and implement the suggestion.

Worker empowerment works only in companies where tasks and methods have been clearly defined Liker, 2003). For empowerment to be effective, people need to be properly trained, equipped and supported. Personal initiative must be encouraged within clearly defined boundaries. Lack of clarity or inadequate training, equipment or support makes personal initiative by workers too much of a risk, overly difficult and frustrating. In organizations with effective suggestion programs, workers know when to “just do it” and when they need to submit a suggestion for review and approval.

For example. at one electronics firm, the informal “rules” for just do it were:

• if the improvement didn’t need regulatory approval
• if the cost was under $200.00
• if the improvement impacted others to make sure they were involved in the improvement
• if the improvement didn’t  there was an easy way to go back to the old way

All other suggestions needed to be submitted for approval.

Almost all successful suggestion programs are really suggestion systems where workers experiment and learn how to apply continuous  try out suggestions even though there seems little likelihood improvement will result ()(Liker and Meier, 2006). The effort provides experience and gives leaders an opportunity to teach additional skills in root cause analysis, solution generation, planning and implementation.

An effective suggestion system strengthens workforce commitment for continuous improvement.  Most suggestion systems focus on cost reduction or increased revenue. But these outcomes should be by-products from fulfilling core values and building people’s skills and experience using continuous improvement (Van Dijk and van de Ende, 2002).

Along with improved performance and success, a suggestion system’s purpose is to:

• Better utilize talent of the workers
• Strengthen workforce morale and loyalty
• Increase organizational resilience
• Improve communication
• Improve decision making
• Maintain continuous improvement momentum
• Increase value added activity and decrease non-value added activity.

For a suggestion system to work, the system itself needs to be a standard process with little or no ambiguity. It must be clearly understood and consistently used by everyone.

INSTITUTING A SUGGESTION SYSTEM

The recommended process for creating and implementing a suggestion system follows these steps:

1. Make sure that senior management is committed to creating the suggestion system It needs to understand that a suggestion system is not a panacea, but an important part of other workforce continuous improvement initiatives. Management must understand the costs associated with creating a formal suggestion system, including:

• Design and system management time
• Training costs
• Material development costs
• The costs of tangible incentives and reinforcers.

(Tucker and Singer, 2012)

Managers should understand that payback, in terms of cost savings or increased revenue initially needs to be considered a secondary outcome. Workforce buy-in and empowerment comes first. Implementing a suggestion system usually involves significant change in management attitudes and behavior. Creating a suggestion system involves its designers working to get an accurate appraisal of the current treatment of workers and the workers’ attitudes.

2. Select a sponsor and design team and charter them to begin work. The suggestion system sponsor should be a senior manager who has the trust and respect of the rest of management. The sponsor should be someone familiar with the company’s day-to-day operations. He/she should generally be known by the workforce. The suggestion system design team should be cross-functional and include people from different levels within the company. The team’s charter should state that consensus will be the desired method of decision making. All final design decisions should be reviewed and accepted by the sponsor who will help the team present them to the rest of senior management for review and approval (Giradelli, 2012).

3. Understanding how people make suggestions and how those suggestions are received and acted upon is crucial. The effectiveness of the current suggestion system should be evaluated.  It is important to distinguish between what is espoused by people working in the company and what is actually happening. For instance, if there is a strong sense that leadership in the company is not open to improvement ideas, while leaders feel frustrated with the lack of workforce suggestions, then that disconnect and its reasons need to be understood ( (Womack and Jones, 2003)A review of a company’s current suggestion activity should include the:

• Current number of suggestions generated in a week/month by work area
• Sources of those suggestions – floor workers, supervisors, vendors, customers, etc.
• How suggestions are reviewed and how they are approved or disapproved
• Existing processes used for implementing suggestions
• Ratio between suggestions made to suggestions approved to suggestions implemented
• Feedback mechanisms for informing people of suggestions and their status
• Any reward or reinforcement policy and the effectiveness of its execution
• An accurate appraisal of the strengths and weaknesses of current suggestion activity.

4. Using one’s understanding of current methods, it is possible to develop a proposed “suggestion tree” (Heathfield, 2008). A suggestion tree describes potential suggestion sources and how they would be submitted. It determines the criteria for execution. The authors strongly recommend that if a suggestion addresses something occurring within an employees’ work area, doesn’t involve any regulatory issues, costs a minimum amount of money and can be done in a short amount of time, then the person and/or team may implement the improvement without approval. However, the results of that improvement should be reviewed.

5. Determine review and approval authority for submitted suggestions. Determine how improvement initiatives are to be evaluated and the results reported. This process to identify who reviews suggestions and who approves them for implementation is based upon:

• Cost savings
• Quality
• Income
• Work improvement
• Morale
• Execution
• Who observes/monitors the progress of implementation.

Suggestions should be approved and results evaluated as close to where they originate as possible. Delays caused by handoffs, multiple levels of approval or the use of committees sap energy and credibility from the whole process. Ideally, the people who proposed the suggestion and those implementing the improvements should report to the rest of the company what the suggestion was, what they did and what happened, citing concrete results and what was learned in the process of implementing the suggestion  (Liker and Franmz, 2011) When possible, the person(s) who proposed the suggestion should participate in its implementation.

6. In order for a suggestion system to work, there needs to be appropriate consequences attached to the suggestions made and initiatives taken, including incentives and reinforcers  (Schonberger, 2000). These consequences should encourage additional suggestions and initiatives. Ideally, a suggestion system should support and strengthen people’s commitments to the core values of continuous improvement:

• Giving value to the customer
• Fact-based decision making for initiating change
• Creation of a team-based culture to assure agility and adaptability.

Selecting and using the right type and mix of incentives and reinforcers are critical to a successful suggestion system.

So what is the difference between an incentive and reinforcer? An incentive is something promised before action occurs. Incentives are the desired things the person will receive by achieving a specified end result. Incentives motivate, but they do not encourage repeat or increased behavior. A reinforcer is a consequence attached to a person’s specific behavior. It is repeated each time, or at some interval, when the behavior occurs. Successful suggestion systems use positive reinforcers, given as immediately as possible after the desired behavior.

Incentives and reinforcers are not mutually exclusive and most effective suggestion systems intentionally overlap incentives and reinforcers  Chapados and Perlinska, 2010). Both can be tangible (something that holds physical value to a person) or intangible (the mental pleasure or satisfaction a person experiences from receiving an incentive or reinforcer).

Companies often use the concept of an “incentives store” where upon achieving, a goal people are able to select from a number of different tangible items.

Reinforcers should be tied to specific behavior that is desired to be repeated or increased and given as immediately as possible to the person demonstrating the behavior. An effective suggestion system has a matrix of incentives and reinforcers enriched by the use of both tangible and intangible rewards(Daniels and Daniels, 2009)

A list of reinforcers and incentives, both tangible and intangible, needs to be generated before the system is tested. How those incentives and reinforcers will be provided and by whom needs to be clearly identified and defined. Inconsistency or confusion in paying out incentives or giving reinforcers would be a major blow to implementation.

7. Determine how suggestions will be encouraged, collected and reviewed. Identify how:

• Suggestions will be encouraged, documented and collected
• The status of a suggestion will be communicated
• Actions and suggestions in the suggestion tree will be evaluated
• Suggestion action items will be assigned and monitored
• Action outcomes will be evaluated.

Designers need to keep in mind that no matter how detailed the planning, mistakes will happen. Initially, confusion will occur as to when people can act on an improvement idea and when it should be submitted for review and approval. Learning when to do which involves training, coaching and practice. Errors in judgment should be used as teachable moments, not criticized or punished.

At the beginning of implementation any and all initiatives need to be reinforced. Suggestions can be shaped over time through the use of incentives and reinforcers. No matter how well thought out, the incentive and reinforcement matrix will need to be improved as the system evolves.

8. Everyone involved should be trained on how the suggestion system works (Heathfield, 2008). People need to understand their roles in the system. Individuals have to be trained in the specific tools, knowledge and skills needed to contribute to the system. Employees also need to be taught the necessary verbal, writing, charting and interpersonal relations skills needed to meet their assigned responsibilities.

9. Give the suggestion system a trial run. Inform everyone that their experiences and ideas for improving the system will be solicited during the testing period. Usually three to four months of testing is needed to have enough experience, data and information about the strengths and weaknesses of the system to make needed adjustments. During that time, the people who designed the system and are responsible for its implementation should be responsible for the system’s performance and any improvements that need to be made. They should seek feedback from all involved. Often a suggestion system is tested first in one area and then expanded to others as the identified issues are resolved. As the strengths and weaknesses of the system are identified, seek suggestions for improving the system. Those suggested improvements that would add value to the system should be tested and implemented (Imai, 1997).

10. Confirm the final design. Once the suggestion system is actually functioning, it needs to be reviewed periodically and improvements made. Toyota Motors is an excellent example of making such improvements (Liker and Franz, 2011). In 2009 when Toyota’s cars suffered perceived acceleration problems, the company had to recall 3.2 million cars (later another 2.1 million were recalled). Toyota changed its approach to worker participation and empowerment by redesigning its continuous improvement program to encourage worker suggestions be made and approved by their work teams. Implementation was led by team leaders and supervisors until teams became competent and confident to implement ideas on their own. This approach significantly reduced involvement with the formal suggestion program. Today, suggestions are more likely to be executed immediately by the person or the team that had the idea. Even when an improvement idea needs resources beyond the team, the person with the idea is most often made the leader of the implementation effort. What Toyota is doing is counter to the inclinations of a traditional company. Toyota gives more authority and responsibility to the front-line workers, while a traditional company would try to exert more control by management and supervision.

A suggestion system only works if it is part of an integrated effort to create a continuous improvement culture. Implementing a suggestion system will contribute to the future health and growth of a company, but only if it is tied to a foundation that supports the core values of continuous improvement.

AUTHORS

James Chapados is Principal of Stowe Consulting Company and Senior Fellow at Leadership Performance Initiatives.  His work with companies focuses on productivity improvement and organizational leadership.

Kerry Desmond, formerly a Continuous Improvement Manager at a privately held Drug & Medical Device Manufacturer, is a Project Manager for a Fortune 500 company. He has led and facilitated numerous process improvement and project management teams.

Christiana Schlett, formerly a Continuous Improvement Associate at a privately held Drug & Medical Device Manufacturer, is a Production Planner for a Fortune 500 company. She has a number of process improvement teams, including one that reduced a product family’s cycle time by 30%. She has also led several project teams that designed and implemented a demand driven material requirements planning process.

REFERENCES

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Womack, James and Daniel Jones. 2003. Lean Thinking. 2nd ed. New York: Free Press.

• Continuous Improvement
• Lean
• Suggestion System