Your organization’s leadership team no doubt contains a wealth of experience, knowledge and bright ideas. But it might not have all the answers — and, more important, you and your fellow leaders could be unaware of one or more growing problems.

The good news is your employees may very well hold the operational improvement solutions you’re looking for — or don’t even realize you need. However, you might have to offer an incentive to get them to speak up.

Gaining Insight

Here’s a fictitious example that illustrates the kinds of insights you could gain. Let’s say, in March, Employer X lost two major accounts. The sales manager blamed it on poor quality control. The production manager blamed it on an executive decision to switch to a cheaper supplier. Meanwhile, the marketing manager thought the company’s prices were too high compared with what competitors were charging.

Tired of the blame game, ownership decided to survey frontline workers and customer service reps about ways to improve customer retention. Sure enough, these employees had some practical suggestions based on their daily observations and interactions.

After carefully choosing, crafting and implementing several of the ideas, things got better. First, Employer X was able to eliminate multiple bottlenecks in production, streamlining its workflow without compromising quality control.

Also, after one employee mentioned having a good rapport with a vendor while at a previous job, the business contacted the supplier and ended up negotiating a long-term contract. The new deal involved receiving raw materials on a just-in-time basis, which lowered inventory costs and improved Employer X’s gross margin.

Perhaps most important, leadership received a fraud tip: a salesperson noted that a disgruntled former colleague had more than likely stolen customer lists on the way out and taken them to an unethical competitor. So, ownership contacted an attorney about investigating the breach and implemented stronger controls to better protect valuable proprietary data.

Offering Cash Incentives

How can you motivate your employees to speak up? Some employers have implemented cash reward programs to incentivize workers to come up with value-added suggestions. When putting together such an initiative, consider these guidelines:

  • State your strategic goals. You don’t want to be inundated with complaints. Clarify that you’re looking for ideas for meeting achievable objectives that add long-term value.
  • Establish measurable benchmarks. Tie rewards to financial results, such as cost savings or revenue growth. For example, if a suggestion saves the company $40,000, a 2% reward is $800.
  • Say thanks and recognize winners. Openly express your gratitude to everyone who contributes ideas. Emphasize that, even if you decided not to act on a suggestion, you gave it due consideration. Announce the winners at a companywide meeting or awards ceremony. In addition, publish the names of winners and descriptions of their suggestions on your internal website or via a widely distributed email. Doing so demonstrates that the program is authentic and important to your organization.

Broaden Your Perspective

Whether a high-ranking executive or newly hired entry-level worker, everyone wants to have a voice and be heard. By encouraging employees to contribute improvement solutions, you’ll broaden your leadership team’s perspective, empower workers and better guard against unforeseen risks. Contact Doeren Mayhew’s advisors today for help assessing the cost-effectiveness of an operational improvement program.