In 2007 Joseph Golan, a division leader at Elop, an Israeli electro-optics company, faced a challenge.
As an experienced manager, he knew that his manufacturing and operation division’s success depended on getting creative ideas from his employees. But he also realized that the existing system was not working as needed. Only a relatively small group of employees submitted ideas through the system, which required them to prove the economic advantage of their ideas through a lengthy and complicated process. Over time, employees learned that developing and submitting new ideas was not worth the effort.
Over the past three decades, we have researched how leaders motivate their employees to come up with creative solutions to organizational problems. We’ve studied stereotypically “creative” firms, like design, R&D, and information technology companies, but we’ve also researched stereotypically “uncreative” environments, like Golan’s manufacturing plant at Elop (which is part of Elbit ISTAR). As you might expect, our studies have revealed that encouraging creativity can backfire if employees lack the resources, support, or mechanisms to develop and implement their ideas. Indeed, when managers urge employees to invest extra effort in creativity, but then reject their ideas (often because they are single-mindedly focused on productivity and efficiency), employees become frustrated and their creativity wanes over time. As a result, innovation can stall.
As part of our quest to discover how employee creativity can be unleashed and sustained, we analyzed data collected over nine years on the management system for creativity that Golan developed to address the problem he saw in his manufacturing division at Elop — a company where the average employee age is 48, the average employee tenure is more than 20 years, and many employees are immigrants. Unlike traditional suggestion systems, the Elop system is a holistic process for managing the full life cycle of creativity, designed to ensure that ideas don’t get lost and that employee motivation to offer ideas is encouraged, not dampened. It begins with idea generation but doesn’t stop there. It also includes help with idea development; substantive, fair idea evaluation that is transparent to everyone; public recognition; and implementation of the most promising ideas.
Since Golan implemented the new system, the number of ideas submitted and implemented has soared.
Removing the Barriers to Creativity
Golan focused on removing organizational and psychological barriers such as fear of making mistakes, poor management attitude, lack of relevant resources, and stifling bureaucracy. Even though many employees had good ideas, they were sometimes afraid to speak up because of their low status in the organization and because they believed that their ideas were not mature enough and therefore would not be implemented. When they did offer ideas, they often failed to explain the potential value of those ideas to their managers. And they were understandably reluctant to invest the extra time and effort needed for developing ideas in their after-work hours. In the old suggestion system, there was also uncertainty about the processes and, as a result, many employees suspected that their ideas were not seriously considered and that their managers wouldn’t take sufficient effort to find the necessary resources for implementation. Further, some employees were concerned that others would take credit for their ideas, or blame them for an idea’s failure.
Golan developed an intranet platform on which employees would submit their ideas by filling out a simple form; all information on the platform would be visible to everyone in the organization. The transparency of the system enables a fair assessment of ideas, based on defined, known, and shared sets of parameters.
Under the new system, midlevel managers, who receive all forms from their direct reports, are responsible for presenting all of their employees’ ideas to senior management and for gaining the necessary resources for developing the accepted ideas. Thus, employees don’t have to worry about selling their ideas, yet they get credit for their ideas and the necessary support and resources for ideas that are accepted for implementation. Just as important, managers are motivated to seriously consider the ideas, working with employees to refine and improve the ideas before presenting them upward — because managers are evaluated based on their ability to do so fairly. One of the most important aspects of the system is that employees receive feedback on every submitted idea.
In most organizational suggestion systems, employees are rewarded solely based on the quality of their creative ideas. The holistic approach at Elop recognizes employees for their level of effort, not just the outcome, and thus promotes learning. Every submitted idea earns the employee “creativity points,” which are awarded by an expert panel. The panel grants more points for original ideas that pushed employees out of their comfort zones and ideas that can benefit many people in the organization. Everyone who submits ideas receives small symbolic rewards (such as a certificate or a pen, with a personal note from the manager). Employees say that the feedback and recognition builds their confidence and motivates them. As one interviewee told us, “I was one of those people that never won anything. When I showed the certificate I received for my creative contributions to my family, my family celebrated my achievements. Seeing how my grandchildren admired me meant the world to me and gave me a boost of energy to continue to generate additional creative ideas.”
Of course, not all ideas are worthy of awards and implementation. However, if managers communicate their decisions regarding ideas in a way that allows employees to see that evaluations are fair, people can stay motivated even when their ideas don’t go very far. In fact, the perceived fairness of the process is crucial for its long-term success. We found that Elops’s employees feel that the process is fair when their managers do three things: (1) gain accurate and complete information from the employee before they make a decision; (2) use clear and unbiased criteria for evaluating ideas; and (3) clearly explain their decisions about ideas. When the process seems fair, employees remain engaged and use the feedback they receive to improve their ideas.
The results at Elop are nothing short of astonishing. From 2007 to 2014, Golan’s employees generated over 5,000 ideas, with an exceptional implementation rate of more than 70%. (Simple ideas were implemented at a much higher rate than complex ideas.) These results are even more impressive when you consider that Golan’s division had about 430 employees, 81% of whom submitted ideas; that’s an average of more than 14 ideas per participant. The new system doubled the number of suggested ideas and participating employees; in the old system only 37% of employees submitted ideas, with an average of fewer than six ideas per participant. By 2015 the ideas generated through this system had saved the company millions of dollars, improved efficiency, and dramatically changed the organizational culture.