The Benefits of Accumulating and Implementing Small Ideas

The April 10, 2008 Employee Ownership Update is online and discusses the following:

• AECOM Continues Commitment to Broad Employee Ownership
  
• It's Small Ideas That Matter
  
• Employee Ownership and Section 8(a) Minority Business Qualification
  

The Update discusses the keynote speaker of the recent NCEO/Beyster Institute 2008 Employee Ownership Conference, Dean M. Schroeder, one of the authors of "Ideas Are Free: How the Idea Revolution Is Liberating People and Transforming Organizations". It discusses the value of accumulating and implementing small ideas and uses VATEX as an example of a company that has benefited from implementing small ideas:

Big ideas, Schroder said, can be easily copied by the competition, so they do not provide a sustainable advantage, necessary as they are to keep pace. Companies where employees generate hundreds or thousands of small ideas, however, create an edge that cannot be copied very easily…While some small ideas may end up having a big impact like this one, Schroeder said, two other benefits flow. First, the accumulation of small ideas can add up to substantial savings or new revenues. Second, cultures in which people are constantly coming up with small ideas create environments where big ideas are more likely to be generated as well, including from seemingly unlikely sources.

The key is not just to encourage people to come up with ideas (the suggestion box is at best a waste of time, he said) but to establish structures in which people are expected to generate ideas, a topic we have also discussed extensively in our publications.

The Update also discusses AECOM Technology Corp., a Los Angeles-based architecture and engineering company with 41,000 employees. The company went public in 2007 and has an ESOP that owns about 15% of the company:

"Employees get a 10% match for their purchases of AECOM shares. To minimize administrative and tax costs, the plan is operated through an offshore trust on the Isle of Jersey."

It concludes with a discussion of whether an ESOP-owned company can qualify for minority ownership status for federal contract purposes.