The Question:

How do you dissolve an ideation program (employee suggestion program)? After dissolving, what should "next steps" include?

Signed, A Vice President (Code: VP7602)

Key data follow:

1. How long have you had the ideation program? 3 years

2. What is the structure of the suggestion program (policies, procedures, manuals, training, governance, etc.)? Are you using a commercial program model and if so whose? Idea generation was encouraged to support one of the following:

· Enterprise Wide Company Enhancement
· New Product
· New Service
· Technology Enhancement

3. Who is included in the suggestion program and how many? All employees (7,100)

4. Are any unions involved? no

5. Is there a compensation plan associated with the program? There is, however, there aren't any strict guidelines. The compensation ranges from $25 - $1,000.

6. Is the program limited to certain subsidiaries or corporate-wide? corporate-wide

7. Why do you want to cancel the suggestion program program? Management response to ideas is low, idea generation has become repetitive and acts as a complaint box and project manager can not be committed to program (time).

8. What are your concerns about cancellation? Negative reaction from employees.

9. Do you have any further profit improvement objectives that would be part of your "next steps"? We don't and I am not sure which direction this should go in.

10. What else is on your mind concerning this decision? I want to keep employees engaged and dedicated to The Company. I also want them to feel like they have contributed to our successes and I am not sure how else to do that.

Ideation Program:

Our Response:

The good news is that you have no unions so you won't have to involve labor lawyers if you choose to unwind your ideation program.

The bad news is that you have significant issues facing you and you may want to consider each of the following three options carefully and in concert with senior management. Senior management (and every manager in the company) are the ones who will ultimately pay the price or reap the rewards of this decision.

From my 30+ year perspective as a corporate executive and profit professional you stand to lose not only good will and morale but also tens of millions of dollars of profit potential over the next few years. Here are brief overviews of three options with pro's and con's:

Option 1: Close the ideation program down cold.

Make an announcement that the program is over, thank everyone for their past participation, and ask them to continue to do a good job.

PRO's:

	This will diminish management distraction from unwanted ideas.
	Activity should stop quickly.
	This proactive approach may be seen by some to be more positive than the status quo.

As your website says "Caring is good. Doing something is better."

This finality is consistent at least with your annual report letter to stockholders that states "As The Company celebrated its 25th anniversary, this was a year marked by significant events culminating with the completion (emphasis added) of the company's turnaround. The strategic plan ... was embraced by all of our employees, and served as the road map to successes we are proud to share in this report."

CON's:

	This will send a message to essentially 100% of your 7,100 employees that their ideas do not matter. The vast majority will get this negative message no matter what you say or how sweetly you say it. Innovation will slow.
	They will also get the message that profits are no longer important so they can take the route that is easiest and best for them as individuals without serious concern for the corporation. Do you realize that if each employee spends or wastes just $1 per work-day more, your profits will be reduced by over $1.8 million per year? You are more than passing up on cost reduction.

Option 2: Let the ideation program die a natural death.

Stop all communications relative to the program and remove all forms and related documentation from circulation. Tell only managers what's happening so they can react accordingly to their people. Reply to submitters that the program is no longer active and thanks anyway.

PRO's:

This may be the low profile (easy) way out.

CON's:

	In addition to the issues associated with the announcement approach:
	It may not be so easy when management and staff start asking questions in reaction to the reply.
	It devalues the contributions that have been made in the 3 years the program has been active.
	This does not necessarily cast management in the best light.

Option 3: Rebuild, reform and re-launch a profit oriented "ideation program" designed to work.

My professional impression is that your current program lacks several vital elements that make a profit oriented ideation program work effectively. These deficiencies can readily be cured and a dynamic and productive program can be created throughout the entire corporation within only six to nine months.

PRO's:

	A well designed program does not distract management but serves to support their strategic and operational goals and initiatives.
	Properly designed and administered profit improvement programs (incorporating the elements of your ideation program and more) produce measurable and significant bottom line results within just a few months.
	This proactive and positive approach is consistent with your stated corporate values of action and innovation:
	A healthy focus is maintained on profitability by employees . They are given the process, the tools and the motivation to make better financial decisions every day. The most recent 10Q report indicates that on average each of 7,100 employees influences some $1.6 million per year in expenses (obviously this varies considerably from employee to employee from a few tens of thousand dollars to tens of millions of dollars per year). SG&A alone accounts for about $1.6 billion per year and is up 10% from the prior year! Each 1% reduction from a profit improvement program is worth about $160 million per year. This approach addresses one of the significant risk factors delineated in your 10K "Increases in our selling, general and administrative expenses could harm our profitability.
	It only takes 4 to 12 hours to train key employees to maximize profit and contribute to profits. $1 per day per employee is worth $1.8 million per year to the bottom line.
	You already have a profit sharing plan so "idea compensation" (financially) is built in. Non-financially compensation is easy, inexpensive and supportive of the positive work environment you are seeking to foster.

CON's:

	No program will function to its potential over time without management support. You have seen that already. It will require some education and consensus building to sell this idea.
	Training and education are required.
	Structure is required to maintain the process.
	A steering committee is required to administer and focus the process.

Summary:

Your company spent three years and a significant amount of money making this "ideation program" work. Your obligation and liabilities warrant doing the right thing now. I assume that's why you have invested your time and effort in finding experts on the Internet.

In my opinion, options 1 and 3 are the only viable ones and 3 is my recommendation based on my limited information. Whichever approach you choose, there are significant contingencies to be addressed that are beyond the scope of this communication.

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