Enthusiastic employees who understand their mission and their customers are the best source of innovation and value creation for any organization. Tapping into the wealth of information and ideas they provide is simply good business practice. Not only can employee suggestions for new products and services positively impact the bottom line, their adoption spreads the message that every employee can make a difference.

How can boards ensure that management actively encourages employee innovation from the bottom up? How do successful companies develop a culture where diversity of thought and initiative is welcomed, and inventiveness is part of the DNA?

There are hundreds of methods for encouraging employees to actively take part in problem-solving and the new product development. Every corporation has different opportunities, but here are a few common denominators that the board should consider discussing with their management team:

Hiring. The board should ask management to take a hard look at the recruiting and hiring processes in place across the organization. If most of it is mechanized, how do unusual or “out-of-the-box” candidates break through? Are there algorithms or automated selection processes that could lead to the loss of great talent before they can even get in the door for an interview? Ask management to report on whether or not candidates are given the opportunity to demonstrate a knack for creative problem-solving. If the candidate evaluation process is based solely on checklists of experience with no reference to results, the board might need to suggest an update to the questions that hiring managers are asking.
Incentives. Fostering positive behavior requires incentives. Directors should ask if there is a mechanism or program in place, such as an employee awards program, to reward employees financially for innovative ideas and problem-solving. They might also ask management about metrics on incentives and recognition styles that have worked in the past. Since good ideas are often the result of teamwork, does the program take into consideration both individual and team contributions? Are there any other ways these individuals and teams are recognized for their contributions?
Pathways. Smaller organizations can employ “suggestion boxes” and larger ones might use software applications, email, or file-sharing. Regardless of the method, directors should ensure that the pathway to successful submission of ideas is communicated clearly, and responses are sent out quickly. Once an idea is submitted, is the pathway to review of the idea and its execution laid out? Are ideas cataloged and maintained for future reference? Most importantly, does the pathway include resource allocation for implementation?
Time and space. Inspiration often seems to come by chance: in the car, in the shower, at a happy hour, or even on vacation. The key elements are relaxation, a different environment, and time to allow the mind to wander. When employees are overscheduled or micromanaged, they rarely generate new ideas. Keeping in mind that efficiency is not the same as effectiveness, does your organization allow any built-in “downtime” for thinking or problem-solving? Are managers encouraged to invite employees to lunch or off-site for discussions or brainstorming? How would the company review and adopt projects created during these creative periods?
Trust. Employees must be sure that ideas are welcome, or they will shut down. In large organizations, there is a natural bias against speaking up that must be overcome, and the board can be an important player in building that trust. If management is not openly encouraging feedback and opinions in meetings, most people will avoid expressing new ideas. Even “bad” ideas often lead eventually to good outcomes, so open discussion and brainstorming sessions that withhold judgement are best for idea generation. After all, the board would likely say the same for building the trust necessary to express diverse opinions with one another—and to voice disagreement when it’s necessary to do so. Why wouldn’t the same be said for employees at every level, and especially when they are expected to be creative? In order for the board to understand how trusted employees feel by their management team, an annual employee survey—hosted by an outside organization—can help. By digging into the results of an annual survey, the board and management can gain insight into the employee experience and whether or not employees feel their ideas are valued, and then track success metrics over time to understand what’s working—and what’s not.

In the end, all of these concepts are about the freedom for a company’s employees to experiment and the value that could come from that creative expression. Along the path to innovation, employees must feel free—and trusted—to test, explore, and follow through on executing their new ideas.

The creative process is not linear, and not all ideas or prototypes will be adopted. So long as the innovation pathway includes a place to store and review lessons learned, every innovation can be considered a success, even if it does not make it to market. And the board has an important role to play in ensuring that the right culture is in place to see its employees’ ideas come to life.

Michael A. Daniels

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