For automotive components and system supplier Magna International, innovation is built into a…

For
automotive components and system supplier Magna International, innovation is
built into a ‘corporate constitution’ that outlines the company’s core
principles: one of which is to foster inventive thinking on the part of
employees. ‘Incremental innovation requires the right environment 3 one built
on fairness, security, safety and proper communications’, said Belinda
Stronach, president and CEO of the $11 billion company. According to Stonach, a
comprehensive incentive programme helps motivate its 72,000 employees to be
creative. ‘We slice up the pie of profits before it’s baked’, she
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For
automotive components and system supplier Magna International, innovation is
built into a ‘corporate constitution’ that outlines the company’s core
principles: one of which is to foster inventive thinking on the part of
employees. ‘Incremental innovation requires the right environment 3 one built
on fairness, security, safety and proper communications’, said Belinda
Stronach, president and CEO of the $11 billion company. According to Stonach, a
comprehensive incentive programme helps motivate its 72,000 employees to be
creative. ‘We slice up the pie of profits before it’s baked’, she said. Six per
cent of profits are distributed to Magna’s management team, all of whom 3
Stronach included 3 receive low base salaries. ‘Employees receive 10 per cent
of profits, of which a portion is in shares and a portion is in cash’, she
notes. ‘We’re all motivated to generate profit because we receive a percentage,
and we’re also required to hold shares so that we look out for the long-term
interests of the company.’ Aware that profit incentives alone won’t deliver
innovation, Magna also encourages creative thinking and idea sharing by
promoting open communications and a sense of security among employees. To
facilitate dialogue and collect ideas, for example, each division holds monthly
meetings between employees and the general manager. ‘We recently created an
employee advocate position 3 an individual jointly selected by the employees
and by management who cannot be fired by management, only by an employee ballot
vote 3 to foster communications between employees and management’, Stronach
said. ‘The mandate is to facilitate communications, keep employees happy and
bring forward new ideas.’ ‘Without safeguards, employees will not have the
confidence or the motivation to come forward with new ideas’, she added. ‘We
found that by making employees stakeholders and providing the right
entrepreneurial environment, incremental innovation is a by-product.’

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