Bottoms up, Bottoms up

Last week our discussion on innovation brought two techniques to the table; top-down innovation and bottom-up innovation. These two ideas basically described where the ideas came from, and whether the trickled down or shot up. After thinking about the terms in that manner, I decided that if a low-rank employee could shoot his ideas all the way up to the top, then that was definitely something worth exploring.

As I went to look for an example of bottom-up innovation, the first one that my search engine showed was Best Buy. I figured that since this is a company that we are all familiar with that it would be interested to see how they have employed this particular technique.

Chris Applegate became a sales associate in 2002 at a Best Buy store in Lakewood, California. As an employee, he brought his store a lot of new ideas, that would eventually travel around the country to other branches. His first idea came from Vonage VOIP services (Vonage is a provider of internet broadband telephone services). Chris then created a Vonage sales and marketing program that spread quickly to other areas in California. His efforts have changed the California consumer by creating a massive increase in Vonage users.

“Chris is practicing Best-Buy’s bottom-up innovation.  For the last several years, Best Buy has been developing this disciplined innovation approach.  Every associate is encouraged to try new ways to increase Best Buy’s sales and profits.  They are rewarded financially when they succeed, and in lots of other ways just for trying. “

This practice has proven very successful for Best Buy, and can be seen in numerous other innovations.

“Like most innovation efforts, the goal of Best Buy’s bottom-up innovation is improved growth and profitability for the company.   And in recent years, Best Buy has been performing quite well along these dimensions, with sales rising about 30% over the two year period from March, 2003 to March, 2005.  During that same period, the company’s operating earnings were up about 50%.”

Two examples of new innovations at Best Buy are the following:

“Ø      The Geek Squad – Best Buy’s “24 Hour Customer Support Taskforce.”  Members of the geek squad will come to your home to repair malfunctioning computers.  The program has been so successful that there are now free-standing Geek Squad locations which are not linked to Best Buy retail outlets.

Ø      Technojunk trade-in – Best Buy will take your old consumer electronics and give you credit against new Best Buy purchases.”

Okay, so maybe the Geek Squad wasn’t the best example, but I am only saying that because I think their commercials are awfully corny. But it is interesting to know that this concept began from the bottom and shot its way to the top, rather than trickling down through the organization. This bottom-up idea of the Geek Squad also created a ton of enthusiasm towards the company, which might be why the commercial is so cheesy. (Oh, and in case you haven’t seen one of their commercials, you should probably check this video out. It suggests a newly designed customer service branch that is meant to cater to customers individually, instead of on a mass scale.)

It amazes me what can happen when the highest level of management finally steps off their high horse and listens to the little guy. Innovation is often about the people and not the ideas. Best Buy clearly did a great job of creating an environment of trust where everyone’s opinion was respected. I think that this particular technique could help a lot of other companies out. So many people believe that the highest level of management is the smartest, and therefore has the best and only acceptable ideas. Sometimes it is important to let everyone voice their opinion in order to succeed. I can’t really think of any particular companies that would benefit from a bottoms-up instead of a top-down approach off the top of my head, any suggestions? I know we talked about this in class, but does anyone see any problems with Best Buy’s technique?

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2 Responses

  1. I think Best Buy was very lucky when they hired Chris Applegate, and I think encouraging sales associates to innovate can only help a company. I think we mostly see innovation from the top because companies hire specific people to be innovators. There are marketing departments in most big firms solely to create new ways of selling products, and pharmaceutical companies have teams that test new drugs as their job. I think bottoms-up innovation would be difficult to rely on but it doesn’t hurt to encourage or give incentives for it.

  2. Well, how good is the bottom up innovation for the “little guy or gal”?

    Best Buy says it build is in financial rewards for innovation and trying. What or how? That is in some ways rewarding employees for risk-taking. That can be very positive. It can also lead to Enron, or AIG’s financial products division. What is the liine between prdouctive risk-taking and ruinous?

    Also, many companies may not want employees to try and innovate if that leads to spill over start ups and future competition. There is a lot of rhetoric about listening to emplyees, but the details will be very importnat as to how successful it is.

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