Making the Right Turns: What to Learn from a Crazy-Successful UPS Policy

Blog | Business Strategy | Management Mindset

Unusual, but profitable, ideas can come from anybody. Here are 3 ways to tap into them.

As I was sitting in the left-turn lane this morning trying to cross a busy road, I found myself recalling one of the most unique business improvement ideas I’ve ever heard.

You see, UPS doesn’t abide by all that waiting in traffic to hang a louie. Its whole business is built on ruthlessly efficient transportation. If you doubt that, next time you’re out on the road and see a UPS truck, follow it around the neighborhood. You’ll see that UPS drivers turn right about 90% of the time.

The company has been doing this for decades, based on the notion that it’s safer and more fuel efficient to turn right. And these days, it’s not just a notion. The company now has plenty of data to back it up and some seriously slick software to support the approach.

According to Cailey Rizzo of Travel and Leisure, “The policy was announced back in 2004 and has since helped the company use 10 million gallons less fuel, emit 20,000 less tons of carbon dioxide and deliver 350,000 more packages.”

OK, so maybe right turns are good business. But what does this story mean to your business?

Well, I don’t know from where the UPS right-turns-only mantra originated, but I’ll wager this: It wasn’t dreamed up in an executive’s office. It’s the sort of idea that almost certainly came from the trenches, either from some astute data analysts … or even from the drivers themselves.

There’s the rub. Chances are, in the thick of day-to-day activities, your company is wasting time and money on your own “left turns,” or the right turns that could unlock new opportunities are waiting to be discovered.

Now, you can dive into your data and scour reports yourself to find these hidden opportunities. Or you can tap into your greatest source of unlimited data and insights: your team. There’s a high probability that your team knows all about your company’s left turns, and they’ll be happy to tell you … if you know how to ask.

So how do you foster an environment where employees share their (potentially) great suggestions? Here are three ways you can uncover wasteful expenses and capture new revenue opportunities by engaging your team.

1. Reach out to front-line employees and ask them for their ideas.

Sounds simple, right?

You have an “open door” policy, so of course, all your employees know they can come to you anytime with their great ideas to drive revenue and save money.

So, when was the last time that happened? When was the last time an employee, not a direct report, just walked in your office and honestly shared something that your company was doing that wasted money? Or pointed out something that could help you generate a spike in sales?

If it happens all the time, good for you! You’re off to a great start. But what happens next? Do you act on their suggestion? What results have you achieved? And most importantly, how did you recognize and reward this contribution, to encourage such sharing to continue?

The fact is, most of your employees are probably too intimidated to share their ideas with you. Especially, if there is a layer or two of management separating you.

You’ve got to seek ways to break down those barriers. Wal-Mart founder Sam Walton, for example, famously used to stop in his stores and pick the brains of his cashiers. He claimed to get many of his best ideas from these front-line employees. If it worked for Sam, it can definitely work for you.

Research backs up the value of feedback from frontline employees. “At one national restaurant chain, managers were able to persuade senior leaders to make improvements that reduced employee turnover by 32% and saved at least $1.6 million a year.” – Harvard Business Review

2. Implement an employee feedback reward system.

I’ve worked with several companies over the years that reward employees for ideas that either save money or generate revenue.

It’s simple to develop a system like this. Just create an online form or even a paper drop box where employees can submit their ideas and suggestions.

The key here is to foster an environment where the suggestions are both recognized and rewarded. Let’s face it, you’re going to get some great ideas and some ideas that might not be in line with your overall strategy.

It’s important to recognize ideas from both categories. By recognizing even the ideas that are out of line with your company vision and strategy, you can help inform your team and drive alignment and engagement.

Your reward system should be simple to understand and transparent. A photography company I worked with provided a standard $50 gift card anytime a new idea from a frontline employee was implemented.  

I’ve also worked with businesses that have taken things a step further and provided significant cash incentives to employees who submit ideas that actually cut cost or generate revenue.

One business I worked with provided a 10% bonus after a decrease in expenses or increase in revenue over 12 months. For a delivery driver who created a zone system for weekly deliveries at this local furniture chain, the bonus came out to $2,500.

3. Build an innovation committee.

You can leverage the power of teams and generate tremendous engagement when you build a cross-functional team of employees and bring them together to review new ideas or solve core business challenges.

Simply state the key objectives for this committee, and let them do the rest.

An example might be, “How can our company drive the total annual revenue generated by each client in the next 90 days?” You set the main goal or objective, then allow your team a set amount of time to create a plan to achieve it.

If you do this on a regular basis and engage team members from different departments, you’ll be astonished with the results.

I once worked with one such cross-functional employee group that developed a new offer that generated $50M in incremental revenue using existing company resources.

Anyone in your organization is capable of coming up with great ideas. Many people have vital, everyday insight that you may lack. The key is that you must be open to their input and ready to act on it.

As a cautionary tale, I worked with another company that also tried to leverage the power of a cross-functional team. At the end of three months, the team delivered 12 revenue-driving and cost-saving strategy recommendations. Most of which could be implemented immediately.

But the executive team decided not to implement any of them. 18 months later, they filed for bankruptcy.

The better way?  I strongly believe in and have seen the value of, encouraging and embracing proactive ideas from anyone, anywhere, anytime. You don’t want to miss the next opportunity to make a right turn that generates sales and saves your company money.

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