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A Little Innovation Goes a Long Way
By Mark Harbeke

“Money is the great inhibitor of innovation,” John Heaton, president of Pay Plus Benefits of Kennewick, WA, told attendees at the Best Bosses Conference and Celebration in September 2006. “No one innovates when they have the money to buy something.” Perhaps this is one reason why a great deal of the innovation in our economy is in small businesses, that, when strapped for cash, design solutions that help their businesses survive and grow.

Heaton, who Winning Workplaces named a Best Boss in 2004, told of putting a $500 cap on the money available to solve a database software problem. An employee came up with a solution that cost less than the $500, while the lead software developer proposed a solution that would have cost thousands of dollars.

Linked to capped costs or not, innovation is a quality that has defined and continues to define the American business model. Innovation is what led Becky Minard, wife of 2006 Best Boss Paal Gisholt, to develop what she calls the “TV dinner” approach to horse and small animal supplement feeding, which led to SmartPak Equine’s profitable business model. It is also what led 2005 Best Boss Colin Angle, CEO of iRobot Corp., to find success pursuing his dream of building robots that would meet widespread consumer demand after his business failed 18 times beforehand.

Some observers, such New York Times columnist and author Thomas Friedman, go so far as to argue that innovation is the antidote to the trend of good jobs being sent overseas. “In a globally integrated economy,” Friedman wrote in a December 2006 Times commentary addressing competition from China, “our workers will get paid a premium only if they or their firms offer a uniquely innovative product or service.”

And although large organizations make national headlines and serve as Wall Street indicators, small organizations are making the kind of innovative strides that lead to business growth and robust financial performance. In a recent FORTUNE Small Business article highlighting “10 big ideas coming from small businesses in 2007,” John Jankowski, the director of the National Science Foundation’s R&D Statistics Program, says that R&D growth rates among small firms have exceeded those of large firms.

Innovation is not only tied to new product development. In business after business we see innovation in processes and delivery systems that lead to new ways to think about traditional businesses or better ways to serve customers.

This trend stems from the ability to “build a better mousetrap,” according to Michael Mulqueen, former executive director of the Greater Chicago Food Depository who co-paneled another Conference session, “Tips and Strategies for Internal Leadership Development.” In his 15 years at the food bank’s helm, Mulqueen empowered his people to help him improve the food bank’s inventory management system and refine the volunteer experience to be more seamless and positive. When he retired from the food bank last summer, he had built up a corps of 8,000 committed volunteers who handle nearly a quarter of its annual production. As with Heaton’s firm, Mulqueen’s resourcefulness strengthened the bottom line – in his case, to the tune of $1.2 million a year.

We’ve just received 800 nominations for the Top Small Workplaces recognition project that Winning Workplaces is partnering with The Wall Street Journal to conduct. The vitality of the small business community is a source of optimism for the economic future of the nation. For it is in these workplaces that engage employees to make a difference through their work that innovation is occurring. We’re unapologetically bullish in them!

Winning Workplaces' goal is to provide small and midsize employers with proven, practical, and affordable people practices. Too often, the information and resources needed to create a high-performance workplace are out of reach for all but the largest organizations. Winning Workplaces is changing that by offering employers affordable consulting, training and information. We help employers assess needs and develop strategies to improve their workplace practices.

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