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The new big idea? Think small ones

Workers at GM's Opel plant in Germany protest over proposed job cuts.
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(CNN) -- Managers obsessed with the big picture are wasting opportunities to improve their businesses by failing to harness the creativity of their workers, according to two U.S. management experts.

Instead of agonizing over arch concepts of management theory and the latest trends from the MBA classroom in search of a business breakthrough, they ought to be listening to their workforce, argue Dean Schroeder and Alan Robinson.

Schroeder, professor of management and director of the MBA program at Valparaiso University, and University of Massachusetts professor Robinson, back up that claim in "Ideas are Free."

Based on visits to 150 organizations in 17 different countries, the book includes case studies of successful businesses from large textile companies to nursing homes, ranches and furniture stores.

"It was something that I saw was so prevalent," Schroeder told CNN. "I used to do business turnarounds and you'd talk to management and they'd give you these reasons and excuses that wouldn't really be that useful.

"You'd get down to the shop floor and they'd know far more than management would give them credit for. They knew the reasons why they were in trouble and a lot of solutions as well. Not big things but tons of little things."

Schroeder highlights last week's announcement by General Motors of 12,000 job cuts in Europe as an example of a situation in which the problem-solving potential of a workforce has been overlooked in favor of a short-term fix.

"If they'd had everyone on the frontline helping them out and listening to those guys they wouldn't have got into that trouble in the first place," he says. "Management has a problem."

The main problem is that most managers don't understand how to get ideas out of their employees.

"Management has the suits, they've got the education, they've got the corner office and they've got the big pay checks," says Schroeder. "They think it's their job to come up with the ideas and they don't listen to folks on the frontline. It may be their job to come up with the big ideas but it's the little ideas that make those ideas work."

Competitive advantage

As well as boosting productivity and engaging employees, one of the biggest benefits of small ideas is that they can give businesses a sustainable competitive advantage. While rivals can quickly assimilate big ideas, either directly or via consultants, small ideas are far more difficult to pick up and imitate.

Nor is there any such thing as a bad idea.

"Bad ideas can actually be a positive and a lot of time people who come up with a bad idea will have identified a problem but not a good solution. So you sit down with them and work out a good solution. They learn, you learn, everyone benefits."

Having recognized the importance of workers' ideas, managers still have to harness that creative potential. But Schroeder and Robinson warn that traditional reward-based incentive schemes can backfire disastrously.

"You can never figure out how much an idea is worth," warns Schroeder. "The best reward you can give somebody for their ideas is to put their ideas into play.

"The reason people come up with ideas is that they want to solve a problem that would make their jobs easier or they want to help the company because they are a team player. They're not necessarily looking for a big bribe. They're just looking for management to listen to them. As soon as you get money involved it changes people's behavior."

The best way to tap into workers' ideas, suggest Schroeder and Robinson, is simply to ask. Whether formally at department meetings, when problems or complaints arise, or simply by inviting suggestions, managers need to keep channels of communication open from the top of a company to the bottom.

But if the job of coming up with ideas is farmed out to the workers, what then are managers for? Schroeder believes that such an approach would eventually change the nature of management for the better.

"They don't have to spend so long fire-fighting and handling the details which means they can focus on bigger system changes," he says.

"They can focus on more strategic level stuff and they can focus on making sure the system is in place to capture this continual flow of ideas and ensuring the bigger ideas get championed and spread around. So essentially their role changes from fire-fighting and control to managing an improvement process and looking strategically at the future."

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