Many great ideas for what needs to be done or fixed at an organization get suggested. But never in any formal forum - the best ideas often come up when out for drinks, or in furtive cubicle conversations, or other informal venues. The barrier is transferring that "tacit" knowledge of the employees into the formal management structure such that it can be acted upon.
Sometimes an organization doesn't know what it knows. The things that "everybody knows" and regularly complain about are completely invisible to the formal management structure, as nobody dares tell them that information. As such, the decisions made by the management team are lacking key pieces of information. This cycle tends to perpetuate itself, as the decisions made reinforce the idea that the executives are clueless, and therefore unworthy of telling what's going on.
There needs to be a more consistent way for employee disgruntlement or information to flow into the executive suite. Trust has to be built between somebody on the management team and somebody who is trusted by the employees. This communication link also has to go beyond the emotional content of the information (e.g. "our product sucks") to extract the knowledge that can enable better decisions (e.g. "the prototype is failing these tests consistently and we don't know how to fix it").
I once worked at a biotech startup called Signature BioScience. Among other things, we were building an instrument prototype for a partner company. This prototype did not work and did not deliver the desired results. All of the employees knew this. I even wrote an email to our VP of engineering and and VP of applications to explain that we could not deliver the prototype in its present form. However, neither of them wanted to miss the deadline they had promised to the CEO. So the prototype was delivered on schedule. The partner started testing it, quickly determined that it did not meet any of the desired criteria, and was naturally upset.
Admittedly, Signature had numerous issues (it went bankrupt a year later), but that particular situation continues to stick with me as an example of how broken management-employee communication can get. Something that "everybody knew" was somehow excluded from the formal decision-making process.
Trust between management and employees. There is a power imbalance, of course, so employees feel they have to tell management the information being desired, in the hopes of securing good performance reviews and the like. Management also has a tendency to punish those that contradict the official storyline - at the company I mentioned in the illustration, I was denigrated as a trouble maker by the CEO and execs for daring to tell them what many of the employees would say after hours or at lunch.
Reward those who provide new information, even if it's not what you want to hear. Spend the time to learn what they're thinking and what they feel the company is doing wrong (or right). If you're not hearing anything that surprises you, it's probably because you aren't being told things.
This is from my personal experience.