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Innovation Station?


John McCullough has saved MLGW almost $9.5 million. Maybe that's not totally unexpected, since he's the utility's chief financial officer. But what about Lee Smart, who saved MLGW about $6.5 million?

Or construction and maintenance vice president Wade Stinson, who saved the utility $960,000? Or Tommy Jackson, the security and facilities operations manager who saved MLGW $605,000? Jackson, McCullough, Stinson, and Smart -- along with 49 other former and current employees -- are members of MLGW's Innovator Club. The program, started in 1985, recognizes staffers whose ideas generate significant new revenue or savings for the company.

In 2004, the club saved more than $1.8 million. And since its inception, it has saved MLGW $69 million.

Jackson, one of three innovators in 2004, has been involved in 10 Innovator Club projects. "I've had four projects that I initiated," says Jackson. "The other projects I helped out on. … They gave me credit for my assists."

The manager of the security and facilities operations for the past eight years, Jackson recently changed the way the utility bid its ground and landscaping contracts. Previous contracts specified exactly what equipment contractors had to have.

"Now we're not going to tell you that you have to have specific [equipment]. Just tell us the cost per acre. It's lowered our price dramatically," says Jackson.

The origin of one of his earlier Innovator projects came when Jackson sat in on another department's meeting. After hearing a discussion about retrieving customer payments from their P.O. box, Jackson thought they should add staff.

"The department used a courier [to pick up the payments] and the price kept going up, even though they were bidding it out," says Jackson. "I said I think I can do it cheaper. Now I do all of that. I hired four part-time courier/guards. … It's much cheaper than an outside courier."

There's no monetary incentive to be a part of the club, no prize, just a pat on the back. And "rarely," says Jackson, "is it ever about one person or manager."

At this point, the Innovator Club itself doesn't seem like an innovation. Memphis city government, for example, has had a quality improvement program in place for more than five years. But the Innovator Club just goes to show how much money -- literally, millions of dollars -- can be saved by staff.

Earlier this month, Memphis mayor Willie Herenton proposed hiring Public Financial Management (PFM) to find at least $50 million in savings or new revenue in the city's budget. The study will cost about $600,000; the city already owes PFM over $50,000 for itspreliminary work on the project.

Shelby County paid $550,000 for a similar study last year. Its recommendations included cutting staff and implementing a property transfer tax. But the property transfer tax stalled in Nashville, and the city and county are collectively $2.5 billion in debt.

Honestly, I think we need all the help we can get. If PFM can find $50 million -- or more -- more power to 'em. But I'm reminded about the old saw about consultants: You pay them a lot of money to tell you what you already know. And you listen, because you're paying them a lot of money.

s: Good ideas don't have to cost a lot of money. They don't have to come from financial geniuses or chief financial officers. It helps, sure, but it's not the only way. And 53 "innovators" -- less John McCullough -- have proved it. 

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