New Year's Resolutions for Entrepreneurs

In these tough economic times, business owners should solicit ideas from employees on how to cut expenses and increase productivity. A formal ongoing employee feedback program should be initiated. When I was the President of a mid-western department store chain, I started an ongoing program that allowed employees to give suggestions on how to cut expenses and shrinkage and increase efficiency. Since employees are on the front lines every day, their input, both positive and negative, can be valuable.

As a consultant, I encouraged my client, Lincoln Industries, to initiate the Bright Ideas program to get input from associates that can improve any aspect of the company such as operations, relationships with customers, or the products made by the company. Although Lincoln Industries is a manufacturing company, the Bright Ideas program can be implemented in any size retail company.

The program has three levels of input: Level 1 are ideas that improve the day-to-day work environment, Level 2 are improvements that can be measured up to $10,000 in savings and Level 3 are ideas that prevent mistakes or innovate change and create more than $10,000 in improvements. Small monthly awards are given to associates to recognize ideas at each level. "Best of the Year" awards are given at the annual company dinner with the Level 1 winner receiving $250, Level 2 winner receiving $500, and Level 3 receiving $1,000.

On average, 10% of the workforce participated in the Bright Ideas program in fiscal 2006, 2007 and 2008. The cost savings for fiscal 2007 and 2008 have been $170,000 with increased sales potential of $360,000.

One important thought on employee feedback. The opinion of all people is not created equal. Your best employees will provide the most valid feedback.

Bob Gordman of CO 3:56PM January 02, 2009