IBM reaps rewards of employees who think on the job

Tech firm motivates its workers with awards for innovation, writes Gabrielle Monaghan

Rewarding staff for bright ideas is a way to boost your company's profitability and motivate your employees at the same time. Annual innovation awards, which give recognition to employees who generate new business opportunities or come up with fresh ideas for saving money or time, is the approach adopted by IBM Ireland.

Orla Doyle saved IBM in Dublin $64 million (€50 million) in potential liability costs by upgrading an automatic planning system that forecasts orders from the company's suppliers.

The 35-year-old's innovation helped trace discrepancies in the system that could have lead to costly errors in forecasting with suppliers. The revamped planning system has reduced such errors to 2.5 per cent from 77.5 per cent.

Doyle's concept led the company to choose her as the overall winner of its inaugural Innovate Ireland awards, IBM Ireland's new employee initiative. She was presented with an award, along with winners in five separate categories, by Mary Harney earlier this month.

"We want creative people to feel they can bring their whole selves to work. We don't just hire people to fix tops on boxes; we want them to come up with ideas," says Alex Ingle, strategy, development and innovation manager at IBM Ireland. "These awards benefit both the employee and the company."

Innovation can boost a company's operating profit margins by an average of four percentage points, according to a 2005 global survey of 800 companies by Arthur D Little.

Indeed, innovators in the top 25 per cent are getting 10 times more output than those in the bottom 25 per cent.

Companies worldwide are targeting untapped potential in a bid to improve profit growth through innovation management, the study found.

In addition, 74 per cent of executives surveyed by Boston Consulting last year expected to increase spending on innovation, up from 64 per cent in 2004.

IBM, which employs more than 3,200 people in Ireland and is celebrating 50 years here this year, is looking to its employees to help drive innovation.

"One of the things IBM is concentrating on worldwide is innovation. Like Ireland itself, IBM is moving up the value chain. The company used to be in hardware, then software, and is now moving towards services. So we are trying to engage all employees in innovation," says Ingle.

"If we eliminate more manual effort and save costs, it will have beneficial effects for both customers and IBM shareholders."

IBM Ireland started working on the initiative a year and a half ago, setting up a team of "ThinkPlace catalysts", who encourage staff to enter ideas on how to improve the business into a ThinkPlace database.

The so-called catalysts - staff who work part-time on the innovation programme on a voluntary basis - review the ideas and work with employees to bring them to fruition. While IBM has 300 ThinkPlace teams worldwide, they were not dedicated to specific sites such as Dublin, according to Ingle.

"The whole idea of the innovation programme is to allow people to feel encouraged to be innovative," he says. "To come to work and think about how they could do things differently, such as engaging in incremental process improvements, the engineering process, or even to think about new product development ideas or new businesses."

IBM gives awards for the best ideas in five categories, on a quarterly and annual basis.

The categories are:

shareholder value - for ideas that help contribute to IBM's profits;

customer satisfaction;

technical;

teamwork;

people - for concepts that have a positive impact on employees such as improvements in communication, work-life balance or diversity.

Stephen Brennan, who has worked for IBM for eight years, won the award for teamwork. Brennan, a global logistics programme manager, won his award after automating manual transactions, saving the company 250 man hours in the fourth quarter.

"Our representative in global logistics was talking about innovation, so I spoke to her afterwards about this idea I had," he says. "I entered the idea into ThinkPlace and when the programme went live, I was lucky to win an award.

"Innovation is part of the agenda here and every time we have a monthly meeting for our department, we put an idea onto ThinkPlace."

Brennan is now applying his concept to freight leaving IBM in Dublin to the Asia-Pacific region, a move that will save the company as many as 4,000 man hours this year.

He is also working on introducing the programme to other IBM sites, leading to further potential for reducing manual transactions worldwide.

IBM, which describes itself as a worldwide leader in innovation, also drives innovation outside the workplace. The technology company brings visiting scientists to universities in Ireland, including Trinity College Dublin, and abroad to work with students on a variety of projects.

The company holds a competition among colleges for students to work directly with IBM on real projects, enabling them to garner work experience for their CV or even work with IBM full-time when they graduate, Ingle says.

An exhibition is then held every year to showcase student projects from across Europe. "It's a great way of finding innovation," says Ingle.