Improving Small Business Results
Utilizing Intellectual Capital
Written by Andrew Goldman for Gaebler Ventures
Many small businesses underutilize one of their most valuable assets: employee intelligence. By creating an atmosphere where your employees generate and contribute ideas, your company will see significant improvements that may have otherwise gone undiscovered.
One of the most valuable assets you have is your employees and their intellectual capital.
Your front-line employees are the experts in whatever area they are working. They know the problems that arise, and in many cases, are the best individuals to determine solutions.
As a result, every business needs to properly utilize their intellectual capital to ensure the employees are comfortable speaking their mind when needed.
All Employees Count
When I visit small businesses, I often see the utilization of intellectual capital for "white collar" employees, but little to no utilization from the "blue collar" personnel.
It is important for the small business owner to understand that all employees, regardless of company status, have intellectual contributions to make.
Few people understand their job better than they do. You'd be amazed how often many important employees are disregarded when informational feedback is being gathered.
Actively Encourage New Ideas From Employees
In order to get improvement ideas from your employees, you need to have a corporate culture that encourages free thinking from all corners of your company. A simple mention of how your company values feedback is not enough to breed ideas from employees. You need to actively seek employee ideas by offering compensation, some type of non-monetary reward, and/or host brainstorming/idea generation gatherings. A forum for employees to communicate is especially important. Some steps to improve your operations include:
- Understanding that improvement is necessary.
- Getting your employees on board.
- Getting your employees (the experts) to actively generate improvement ideas.
In some instances, employees may suggest that the same work can be done with fewer people. This may create a conflict of interest if the suggesting employee feels another worker may lose work over the proposal. When ideas relating to reduced labor arise, you do not have to necessarily fire anyone (unless it is because of poor performance). There are other areas you can utilize the employee: cross-training, additional quality control, or some other value-added function.
Seek Feedback From Customers
If you are in the service industry, you should seek feedback from those using your services.
They will give you a different perspective from areas that may be unidentifiable from the inside. Just as with your employees, maintain a forum for customer feedback. This may include suggestion boxes, phone lines and general questioning.
Approach your customers and ask them how they feel about your products or services. You'll be surprised how much you can get from a few questions.
It's not enough to just have ears to listen to the problems, however. You need to have a method to transform those suggestions into tangible improvements
Andrew Goldman is an Isenberg School of Management MBA student at the University of Massachusetts Amherst. He has extensive experience working with small businesses on a consulting basis.
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