Every day, front-line employees see a slew of problems and opportunities that their managers do not.

These employees have plenty of good ideas to save time and money, make their jobs easier and improve productivity, quality and the customer experience. In fact, our research shows that some 80% of an organization’s improvement potential lies in bottom-up ideas.

But most organizations are far better at suppressing these ideas than promoting them. As a result, they are using only one-fifth of their available improvement horsepower.

More and more organizations around the world are getting serious about tapping front-line ideas—and have reached extraordinary levels of performance as a result. For example:

• Brasilata, which is routinely named one of the most innovative companies in Brazil, gets 150 ideas per person per year and implements more than 90% of them.
• The Clarion Hotel Stockholm, which was fully booked for most of the next nine months when we visited during the global recession, implements 67 ideas per person per year.
• Ayudhya Allianz CEO Wilf Blackburn credits much of his success in moving the company from 24th in revenue among Thai insurance companies to second in less than four years to the idea system he set up as one of his first actions as CEO.

Here’s how idea-driven organizations are different from traditional ones—and what you could achieve if you transformed into one.

Idea-driven organizations use high-performance idea processes to capture and manage employee ideas. Today, most organizations still use a suggestion system approach. Systems are generally online, but almost all of them are based on suggestion-box thinking, handling employee ideas in exactly the same way as a 19^th-century suggestion box process. The physical boxes never worked well, and neither do their online manifestations. Leaders of idea-driven organizations take the time to learn about high-performance idea processes and how they work—then carefully integrate these processes into the daily work of both managers and employees.

Idea-driven organizations also understand that building a high-performing idea system is a long-term initiative to create significant strategic capabilities. To this end, they make sure that every team and department has meaningful and actionable goals that front-line employees can affect with their ideas. These leaders recognize that while they are in the best positions to identify important high-level goals, their people are in the best positions to come up with the ideas to attain them. In short, idea-driven organizations are top-directed, but driven by ideas from the bottom.

Finally, idea-driven organizations train their people in how to come up with more and better ideas. In its most basic form, creativity can be divided into two parts: problem-finding and problem-solving. Historically, most organizations have focused on problem-solving—it’s only natural, because most organizations struggle to keep up with the onslaught of obvious problems that pop up in the normal course of daily work. Why would they go looking for more? But a good idea system significantly multiplies an organization’s problem-solving capacity—meaning it burns through the obvious problems faster than they come in.

That means to keep improving, idea-driven organizations work on getting better at problem-finding. The way they do this is to provide ongoing training to help their front-line people see new kinds of problems that they couldn’t see before. No need to reinvent the wheel here—there are plenty of good programs and topics already available. After all, people have been studying and writing about creativity for more than 2,000 years.

Don’t underestimate the power of your front-line people—they can help you and your company perform at a significantly higher level. But first, you have to learn how to build an organization and management team that is able to listen to and act on bottom-up ideas.

Alan G. Robinson and Dean M. Schroeder are co-authors of the 2006 bestseller “Ideas Are Free” and “The Idea-Driven Organization: Unlocking the Power in Bottom-up Ideas.” Robinson is a professor at the Isenberg School of Management at the University of Massachusetts, Amherst, and Schroeder is the Herbert and Agnes Schulz Professor of Management at the College of Business at Valparaiso University.