Do you have a system for evaluating innovations and improvements that can enhance the business? Do you have a process for major innovations, which require commitment of funds, staff and resources that are beyond the scope of normal and budgeted operations?
From time to time staff members have ideas that can improve the business and make suggestions and recommendations based on preliminary, but unrefined information. Without some idea of the potential profitability, management is forced to make uneducated judgments to pursue or not to pursue further evaluation. Furthermore, there is always a limit to the amount of money available to invest in business improvements, so a means of prioritizing innovation projects will be helpful.
Examples: The types of innovations that would be considered are similar in magnitude to these below, but not limited to, these:
- Install a major program (Pilates)
- Change operating hours (go to a 24-hour operation)
- Revise new member indoctrination process
- Major marketing thrust (market Spinal Fitness to local corporations)
- Fingerprint system for entry control
Here is a basic form you can encourage your employees to fill out, and the system to help facilitate the selection of new and innovative ideas.
System:
- Staff member completes the Innovation Recommendation form. This is for preliminary evaluation to determine if a refined study is worthwhile.
- Staff member submits the Innovation Recommendation to a review committee composed of the managers, supervisors and CFO.
- The review committee determines if there is sufficient merit and funds available to do a full and thorough study. Recommendation is then made to the appropriate management level as to the next steps.
Innovation Recommendation Form
Does This Idea: _____ Solve a problem? _____ Create a new product or service?
BACKGROUND
What’s the issue: problem or opportunity that you’ve selected?
What’s the context?
Why is it important?
What’s been tried?
THE IDEA
Describe your idea: program/ product/service/solution.
RESOURCES
What resources will be required and when?
People time?
Facilities?
Equipment?
Money?
Where will each of these resources come from?
RESULT
What is the desired outcome?
By When?
How will you tell or measure that the outcome has occurred?
Any constraints or limits or guidelines in reaching the result?
For New Products/Services:
-MARKET
What is the size of the market?
How do you know?
What needs or values does this product/service meet?
How do you know?
What information/strategies have you used to set the prices?
-PROFIT
On what date will the income generated cover the cost?
How much income is needed to cover on-going operating costs?
For a Problem Being Solved:
BENEFITS
ASSUMPTIONS
What assumptions is this plan based on?
RED FLAGS
What red flags would indicate that the idea is not succeeding as planned?
REWARDS
10 percent of cost savings first year. 10 percent of net profits as long as you manage it.
Shawn Stewart is the Operations Manager at Gainesville Health and Fitness Center. Contact him at shawns@ghfc.com
