The Importance of Process: An Idea Management Disaster Story

In the last year, the majority of companies have chosen to implement Idea Management projects using commercial software. During the evaluation process, they consider vendors based on four main areas: Current and Future Business Requirements, Process Expertise, Case Studies and References, and Price. Our research has found that the definition and implementation of the business process is a critical determinant to the success of a project. The perfect technology can fail due to poor adoption, and the lowest price option is often hiding a lack of experience and significant feature gaps.

To illustrate the importance of process, Imaginatik Research has interviewed a number of companies who have not been successful with Idea Management, using either in-house technology or commercially purchased software. In this case study, we focus on the following areas:

The Importance of Focus - focused initiatives are dramatically more successful than random idea gathering methods

The Limitations of Leadership - strong management commitment can launch a project, but even they cannot overcome a poorly designed process

The Failure of Intuitive Thinking - a process designed based on a supposedly 'logical' approach to Idea Management will almost always fail. Over the last five years Imaginatik Research has developed new frameworks and methods that have been proven to work in a variety of companies and corporate cultures.

The case study below is a real story. Neither Imaginatik nor Imaginatik Research has any commercial relationship with the firm.

In 2001, the financial community was pressing one of its leading institutions to improve profitability, and a decision was taken by the board to target $40m in productivity improvements through the implementation of a new Employee Idea Management system.

The goal was to collect ideas from all employees on any topic, and to develop a management process to route the ideas to the relevant business area for evaluation and implementation. The project had top level commitment, and a Senior Vice President was assigned from each business unit in the bank to be responsible for ideas in their area.

With over 30,000 employees, there was a clear need for an electronic suggestion box as no paper system could handle the expected volume. After a cursory search of commercial vendors, they opted to build the system in-house, because none of the existing products seemed to satisfy their requirements. Executive sponsorship was established, and a team of 20 high level experts was assembled. Delivery of the technical system was completed in under 3 months and at a cost of $1m.

The system became known as ideanet, and it was launched by the CEO with great acclaim in a banking conference speech in 2002. The ideanet system received 8,000 suggestions in the first three weeks from across the entire organization. The launch even had an impact on the share price - "it was a big deal", according to one Vice President.

The system itself was administered by the Technology Area, although all 32 lines of business were involved. The application contained sophisticated functionality such as workflow routing, virtual discussion rooms, and duplicate discovery. The high volume of ideas created a significant challenge to the organization as many ideas were duplicates. The IT group built a feature that assessed whether an idea was a duplicate, and if so notified the author that the idea would not be accepted without changes.

Then, for a variety of reasons, the system began to receive fewer ideas, and within six months was virtually unused. Some cost saving ideas caught the attention of management in a bad way - they involved saving money on expensive corporate limos and the executive jet. The discussion forum then had to be shut down as interaction between participants turned nasty.

Employees began to disbelieve that work was even being done on their ideas. On paper there was strong management support, but it did not exist in reality. Only two ideas, out of the thousands submitted, were formally incorporated into the business. One of the winners was an idea to save ATM printing costs. Previously, at an ATM you always received a paper receipt of the transaction, but often the area around the machine is untidy with unused receipts. The idea, now implemented everywhere - was to ask customers "Would you like a printed receipt?" 96% of customers answer "no" and the ensuing savings reach $6m annually in paper and clean up costs.

Ideanet was formally closed down at the end of 2002, after just 13 months of operation. The team was disbanded and the project gently forgotten. Although it was considered by the IT group to be a success, the lack of a well-thought through business process meant that it was doomed to failure. As one VP said, "The technology was successful, the people stuff was not."

Imaginatik Research Analysis

In our research, we have uncovered several reasons for failure for this type of program:

Lack of Focus - The scope was too broad, making it hard to ensure quality of the input, and placing a severe burden on management to process and respond to ideas.

Too Many Ideas - The high volume of ideas blocked the process, preventing reviewers from doing their job and subsequent bottlenecks in the process had a demotivating effect on participants who did not receive any feedback.

Random Ideas become Orphans - The wide scope of the idea generation meant that no manager was waiting, ready to implement the concepts. It was haphazard, without thought to the normal business processes that ensure the inclusion and commitment of relevant managers.

No Implementation - Management was so concerned about getting a broad audience that they forgot the real purpose of the program - generating process improvements that would increase the profitability of the bank. The routing process for ideas did not facilitate implementation, and the high volume made things worse.

Clever Technology, Weak Process - By focusing all the effort on technology, the company failed to think through the human aspects of the initiative. Technology helped overcome some of the weaknesses, such as duplicate ideas, but a better process could have avoided these problems.

Lessons Learned

Idea Management is a tough process to get right without careful thought to leadership, people and process. Some of the success factors, such as the Event approach, can be counter-intuitive, and well meaning managers can develop a perfect plan and fail for all the right reasons.

Our research has found that ongoing suggestion programs are likely to fail within two years, and many shut down within six months. The lack of focus, compounded by volume, means that management are overwhelmed with poor quality ideas and have no time to find the proverbial golden needle in the haystack.

Finally, failure means you will not be allowed to try again. This organization is now so wary of failure that all innovation projects will be difficult to implement. Moreover, the employee motivation to participate in these type of initiatives is now hindered for future attempts. Our research strongly recommends that a company design its process and infrastructure to be successful, and if they are unable to do so, they would be better off doing nothing at all.

If you have any ideas, feedback, or concepts you would like to share, please e-mail research@imaginatik.com.

Reference: The Importance of Process: An Idea Management Disaster Story - RN-0703-1