Although a majority of Inc. 500 CEOs surveyed said the ideas for their products "just came to them" (see "How'd You Think of That?," November 1991, [Article link]), a company's future depends on how well it sustains a flow of ideas -- on its ability to innovate. Not the CEO's ability to innovate, but the company's. "The founders' role," says Bob Johnston, a partner in IdeaScope, a consulting firm in Cambridge, Mass., "is to expand the ability and responsibility for innovation in the company beyond themselves."

Consider the system used by Ed Katz, president of Choice Courier, a New York City-based messenger service. Katz prowls the company's halls late in the day. "That's where I get my best ideas," he says. "It's 6 o'clock at night. People are leaning against the walls. So I say to one guy, 'Hey, what do you know about such and such?' Before you know it, it's 7 o'clock, and I have the germ of an idea for a new product."

Katz informally shops the idea around among the staff to get different perspectives and as a coarse filter to catch obvious flaws. But as soon as he brings the still-rough idea to a Monday-morning management meeting, a more formal process takes over. It's no longer just the boss's idea, once it's been handed over to a joint committee that includes the chief operating officer, a product manager, and others (from sales, finance, operations, and so on) who join as time goes on.

The point is that at Choice, ideas may get examined and then rejected or eventually developed, but there's a system in place for dealing with them. If your company isn't innovating, the first thing to do is figure out why not. Here are some points to think about:

* Attitude and values. If anyone in your company -- especially the CEO -- feels comfortable calling someone else's idea stupid in a meeting, your company may have an attitude problem. Make a rule: no one may criticize another's idea until it's been open to discussion for, say, five minutes.

* Formal recognition of the importance the company places on innovation. Make it part of every employee's review process. Reward people for ideas just as you reward them for performance.

* Cross-pollination. Instead of buying just one subscription to the magazines your marketing people read, buy two and circulate the second through finance or manufacturing. Get the marketing people reading some of the engineers' technical publications. Each group will see the other's literature with different eyes -- and perhaps they'll come up with different ideas.

* A CEO who facilitates the idea flow, but who isn't the obvious decision maker. At meetings where new ideas are discussed, the CEO should step out of his or her executive role by giving someone else the marker and just taking a seat at the table. -- Tom Richman and Susan Greco