Product Innovation Begins with Employee Engagement

While 75 percent of executives are concerned with not having enough ideas, according to Patrick Tickle, Chief Product Officer at Planview, too many bad or average ideas tend to clog the project funnel and they typically come from only a handful of people. Resources become overwhelmed with too many projects and not enough time, yet often, the wrong projects are monopolizing that time.

The key to product innovation isn’t always to collect more ideas from the same people, namely those on the innovation team. Instead, companies need to cast a broader net and then focus on ideas with the highest potential and the lowest risk.

Recent research shows that 31 percent of ideas come from outside of the group trying to solve the challenge. Whether that challenge is to reduce product maintenance times or create new, smart, connected products to penetrate adjacent industries, companies keeping product innovation inside the four walls of R&D are missing out on a third of the potentially game-changing ideas.

From where do the best ideas come? Is it about hiring more creative thinkers? Risk-takers? Dreamers? Product experts? Yes.

The good news is, your company likely already has all of these people and many more sitting at desks, working in the field, and even cleaning your breakroom. They may be using your product right now, supplying parts for your manufacturing production lines or selling your product every day in a retail store. They exist, and they know your company and your products as well as anyone. Sadly, decision makers overlook their greatest assets who haven’t been invited to share their winning ideas. Changing that mentality is the key.

One of the Cinderella stories for the ages involves a janitor and a multibillion-dollar snack company. The son of a Mexican immigrant and a high school dropout, Richard Montañez, got a job as a janitor at Frito-Lay. After a manufacturing malfunction spit out a batch of cheeseless Cheetos, Montañez bagged a few and brought them home after his shift. He added his own concoction of ingredients, including his favorite Mexican spices. A star was born.

He pitched his new product to the CEO, who continually encouraged employees to “act like an owner and make a difference.” Today, Flamin’ Hot Cheetos is one of Frito Lay’s most successful products of all time, becoming a cult phenomenon and proving the next big idea can come from anywhere.

The first thing Frito Lay did right was to have the top executive focus on building a culture of employee empowerment. They then backed it up by creating a path for anyone to submit an idea, giving a janitor an opportunity.

Employee engagement of this caliber is hardly the norm. Gallup found that only 18 percent of employees believe their managers encourage them to take risks at work that could lead to important new products, services, or solutions. The study concluded, “Engaged employees are the ones who are the most likely to drive the innovation, growth, and revenue that their companies desperately need,” and “Managers need to develop the systems and supportive processes that help workers create and capitalize on their ideas.”

The “systems” and “supportive processes” are often the sticking points. Without a deliberate employee engagement strategy and mechanism, these companies not only lose potentially brand-altering opportunities to gain market share, but they also lose phenomenal employees who simply want to feel like they are heard and matter.

This goes beyond soft benefits. According to Gallup, employees who feel valued:

• are more productive
• call in sick less frequently
• have fewer accidents
• are less likely to quit their job.

In a nutshell, they work harder and are happier doing it.

A 2018 study by Mercer found engaged employees are three times more likely to work for a company with a purpose, yet only 13 percent of surveyed companies offer an employee value proposition (EVP). While working for a company with a purpose is important, few employees feel they are given a purpose or know how they contribute to the corporate purpose. They clock in and out without ever feeling as though they have an opportunity to do more.

Gartner says the number one element of an EVP is opportunity. If employees do not feel as though they have the opportunity and a platform to be heard, to share ideas, to take risks, and to think creatively, they are more likely to be disengaged.

Disengaged employees may be a company’s biggest risk, costing them 85 percent more in lost productivity than engaged employees. Employee engagement is no longer a nice-to-have; it is foundational to everything a company does, including product innovation.

Fostering a culture of innovation is a top priority for many companies along with increasing employee engagement. The two are inextricably linked.

“If a company wants a culture of product innovation, they must first engage the employees who make up that culture.”

The foundation for any employee engagement strategy is collaboration. No matter who they are or their role in the company, they are encouraged to speak up. Their ideas may solve problems and may be the next big thing.

Frito Lay understood this. Connecting employees with each other and management may only be the first step. Customers, suppliers, and partners can also join the community of innovators. Why? Because a great idea can come from anywhere. Product innovation is an invitation to anyone who interacts with the brand to be heard.

The question for many companies is how to begin. Even with 84 percent of CEOs saying innovation is a top priority, 66 percent of them lack a well-defined innovation strategy. Structuring the organization to support ideation comes first. Suggestion boxes, emails, or annual ideation events are hardly inspiring, engaging, or sustainable to fill the product pipeline with winning ideas. If so many great ideas come from outside of the primary groups tasked with product innovation:

• How does a company effectively and efficiently collect all ideas for evaluation?
• How do decision makers manage and prioritize ideas to move the strategy forward to delivery?
• What does the feedback loop look like so employees are recognized for their contribution of ideas?

Product innovation and employee engagement have been revolutionized by modern technology. Only technology has the ability to scale in order to bring so many communities and ideas together in one place, creating an ideation hub where ideas from diverse participants can be shared, prioritized, implemented, and celebrated.

In 60 seconds, one team can initiate an ideation challenge and any interested employee, customer, partner, or supplier with access is free to participate. Users can submit their ideas from anywhere in any format, making it fun and easy to toss their hat into the community ring no matter when an idea strikes them.

As ideas collect, people inside and outside of the company may vote, comment, build upon, or simply follow it along its journey. Employees contribute ideas and opinions because they are engaged, empowered, motivated, and in some cases incentivized.

One of the best parts of this technology is the use of algorithms that remove the bias that is typical of many innovation management programs. The loudest voice and lofty titles mean little here. Every idea has an equal opportunity to succeed or fail based on the wisdom of the crowd. Transparency allows everyone to see the same data for the ideas, such as cost and timeline estimates, required resources, and corporate strategy alignment. The community of voters can collaboratively discuss challenges, then prioritize and select viable solutions all in a single source of reference.

Not only do a company’s own people often have the best ideas, they also provide:

• a powerful voice for improvements to existing products and processes
• solutions to potential challenges
• idea implementation aspects that may not have yet been considered

By leveraging the knowledge, creativity, wisdom, and experience of all interested participants, companies have a greater opportunity to succeed in every way. Employees are engaged, a wider range of product ideas flourish, problems are fleshed out earlier in the development process, and companies are more likely to deliver the right products to market at the right time.

Innovation management is a critical component inside product-centric organizations, as they are always looking for the next big thing. For companies who want to leverage ideation as more than an idea generator, to completely change the culture of their organizations, innovation is a mindset of continuous improvement around products and processes. It moves from simply trying to develop great products to getting better at how that is best accomplished.

Employee engagement may spur the next new product feature, but even more, it can move the organization forward, using an internal crowd to collect and vet ideas to get better as an organization. Utilizing a digitally-driven ideation platform, the enterprise is able to create a sense of community as it breaks down departmental silos.

A Work and Resource Management (WRM) platform connects strategy and delivery. It considers everything from projects and roadmaps to ideas and technology. Innovation management is, of course, on the front end, but if optimized, can transform a company by strengthening its innovation culture. Technology engages employees with an interactive user experience as it amplifies every aspect of WRM.

Launching innovation management software is a purposeful way to fill the pipeline with marketable product ideas and engage employees, getting them directly involved in the company’s purpose. It’s not only on the front end of the product development cycle; it’s woven into the fabric of the organization to drive enterprise-wide change initiatives.

Organizations who embrace employee engagement as a driver for product innovation experience a culture change because people who never had a voice before now do. They have a valued role beyond their designated duties. The employee is connected to the company beyond a paycheck. The company’s purpose is now the greater purpose and the goal.

One global aviation engineering company provides an example of how innovation can expand from the R&D team silo to the entire company to move the company forward. With a tech-enabled ideation solution adopted throughout the organization, an executive challenged employees with a business problem. He asked anyone in the company to submit ideas on how best to reduce engine inspection times and costs for its airline partners. An assistant in finance submitted a winning idea to add robotic legs onto an endoscope that magnetizes to the engine. She got the idea after watching the movie Mission Impossible. Her idea, the company’s culture of engagement, and the user-friendly software enabled the organization to reduce commercial engine inspection time by 85 percent. Without these core elements in place, her idea and the opportunity would have been missed.

Depending on the size of the company and the role being filled, employee turnover can cost a company up to 200 percent of an employee’s annual salary. Engaging employees is, of course, about reducing turnover, but it can be so much more.

Employees are an investment in the future of the company. They are called “resources” because they are just that: “a source of supply, support, or aid, especially one that can be readily drawn upon when needed.” They are the key to innovation, the key to success. Keep them engaged with opportunities and purpose and they’ll not only stay, they’ll also enable the organization to thrive.