Many businesses, large and small, have a huge source of great ideas that can help them improve, innovate, and grow, and yet so many of these companies never think of using this amazing corporate asset. What is this highly valuable asset? Its own people. Says David Frood, the author of The Thinking Corporation, “Given that we are all capable of contributing new ideas, the question becomes how do you successfully generate, capture, process and implement ideas?” Becoming an organization capable of answering this question can benefit in a number of ways:
- Growth through innovation/creativity – Rather than be constrained by ideas for new products, services and new markets coming from just a few people, a Thinking Corporation can tap into the creativity of all employees. This means that it has a never-ending flow of ideas from which to select those that best fit the strategic plan.
- Increased profits – Having the ability to harvest new ideas, the corporation will experience an increase in profits due to savings in operating costs as well as sales from new products, services and ventures.
- Higher business values – The link between profits and business value means that the moment a corporation creates a new sustainable level of profit, the business value is adjusted accordingly. This provides a real opportunity for public companies to provide long-term shareholder value and private companies to create wealth for owners and employees.
- Lower staff turnover – A Thinking Corporation will provide employees with fair and reasonable remuneration for implemented ideas. This, combined with the culture that must exist for innovation and creativity to flourish, means that new employees will be attracted to the organization and stay longer.
- Improved productivity – Staffing costs can be reduced because many employees will be far more productive than they were previously. They will be more productive because of the increased motivation and enthusiasm that comes from planning and implementing their own ideas. Of course, this does not apply to every employee, only those that choose to participate in the opportunity that this new generation of corporate culture and behavior presents to them.
So, how can your company become a Thinking Corporation? The management of any business must genuinely value employees and the contributions that they are capable of making. Mr. Frood offers a step by step approach to becoming a Thinking Corporation:
- Step One – Understand the organization’s current capacity to generate and implement ideas. Change the culture so people will be willing to contribute. Employees must feel as though they want to help and then know how the system works if they have a contribution to offer.
- Step Two – The next step is one of education. To ensure that all people within the organization have the same understanding of what the new way of working will be, including the reasons for the change and how it will be executed. It is critical that the most senior management is actively supporting the change and is seen by all employees to be doing so. Failure to do this step properly will seriously undermine the probability for the successful implementation of any change program.
- Step Three – Finally, the company must institutionalize a methodology to capture, process, and implement new ideas and carry out the training that goes along with this phase. Management must institutionalize new idea creation just as it institutionalizes CRM for managing customers and ERP for managing systems.
For sure, transformation into a Thinking Corporation requires managers and owners of the business to challenge the validity of some long standing business paradigms that may get in the way of making these changes in the business culture. For example:
- Management is better at thinking than employees. Really? As ridiculous as it sounds, most corporations are still structured around this paradigm.
- All intellectual property is the property of the company. This is a real sticking point any employee’s willingness to part with their ideas. We need to free up our views and treatment of I.P. to recognize and reward the people who contribute original ideas that lead to significant increases in profits.
- Only the most senior executives of a company can earn large incomes. In other words, don’t allow employees to benefit from the increase in revenue, profits, and value that accrue from their ideas. Why shouldn’t an employee earn millions of dollars if his/her company increases its revenues by hundreds of millions of dollars? Makes sense to us.
Within their ranks, many companies have people who are bursting with ideas and are often stifling within an environment that is pro-conformity, rather than encouraging brave, entrepreneurial innovations. Yet, we hear managers openly stating that innovation is the answer. There is a notable mismatch between the use of the word “innovation” and the practical application of it. If people are willing and capable of contributing towards the organization’s success, they should also be able to share by way of income, profits, and business value.
David Frood has created a successful consulting business around the ideas expressed in this article. You can learn more about how your business can become a Thinking Corporation downloading his free e-book aptly titled The Thinking Corporation.