Sometimes Innovative Firms Are Large

by J John Swanko

11/02/10 (People Port) Lots of deep discussion on innovation. Most seem to believe only small firms can innovate. They are wrong of course. Innovation can be found today in old industries, government, and the much championed small firms currently having trouble raising capital.

For this article, I am defining innovative firms as those that expand their top line using new products, methods. They use innovation to lower cost, exceed customer expectations. As this article was researched, I looked to the often quoted Innovators. The deluge of innovation reports, symposiums, and the like moved this article now.

Most see innovative firms as startups. An old firm just relaunching a rebranded product would not meet the above innovative definition. That would be true if they doubled their exports with that relaunched (though noteworthy) because that is most likely the result of luck or market lockup. Frequently innovative firms, break the laws, step on patents, copyrights -however- an email, letter or two stops that and something is worked out. Innovation flourishes when it is allowed. Those that would deny a grant to study a new way of disposing of waste on one hand while taking credit for coming up with the idea, is one way, A narcissistic administrator wipes out innovation for years.

Government:

I went with the federal government here because it is constantly slammed. How can the government influence innovation, is often asked. Most would not even consider our military as innovators, however, they are becoming great innovators.

"At Quantico, the Marines built an expeditionary testing ground, an expeditionary experimental FOB, to look at new energy-efficient technologies. And as the chairman mentioned, several of the most promising clean-energy and energy-efficient equipment tested at the site were deployed to Afghanistan with the 3rd Battalion, 5th Marines, two weeks ago –just over six months from when they were tested. That’s pretty good. That’s pretty fast for this government," Navy Secretary Ray Mabus, Energy Security Forum, 13 October, 2010.

Our Navy is on track to cut its fossil fuel in half by 2020. Once again leading America into a new energy era. No it is not easy. It is an effort based on constant improvement. It is delivering large cost savings today, while improving the mix of renewable fuels available.

Industry:

Nucor Corporation is a favorite of business schools. This constantly improving firm is innovating at every level. A visit to its website will put a smile on those exporting firms, trying to enter any market (They are have some fun with China). This firm operates in an old industry, steel. They made it big turning used cars into rebar. Last month they announced the construction of a new Direct Reduced Iron plant in Saint James, LA. This is high tech. The plant deeply cuts carbon emissions, far more important, they introduced technology they created that limits the life cycle plant costs. They have come a very long way, innovating. "We have a saying, If something is worth doing, it's worth doing wrong. Meaning don't study an idea to death with experts and committees. Get on with it and see if it works." Ken Iverson, Nucor. Nucor does not have an R&D line, there R&D comes from the plant's floor.

Grocery Stores:

Winn Dixie is a small regional supermarket. Yes, still work there and I just filled up my truck with $2 gas (rounding). This firm uses every customer interaction as, a feel smart connection. They keep on trying new, innovative, sales options. They compete in a highly competitive arena -food. It is not unusual to see a long term sale item matched on a competitor's shelf, or lower, before the sale ends. Everyone selling groceries has to drive that price even lower. Winn Dixie uses every resource available, in this case -gasoline. To make their shoppers feel very special, smart. These -fuel perks- are slowly being rolled out across the chain. As with everything innovative firms do, It could change tomorrow. This one creates traffic. Should lower costs, while retaining customers.