The Innovation Effect
The one-two punch of a recession paired with the digital revolution has kept Midwestern companies on the ropes. Proprietors who want to stay competitive have adopted innovation as an essential strategy for maintaining knockout growth.
"Innovation is absolutely vital to compete in the 21st century global economy, [and] the recession's only heightened the importance of innovation," says Columbus Chamber President and CEO Michael Dalby.
The 2012 Innovation Quotient Survey, conducted by accounting firm Plante & Moran and Michigan's NewNorth Center for design in business, analyzed more than 550 private and public organizations that have profited or grown due to innovative management, development or production strategies.
The second annual survey identifies innovation constraints, organizational factors that contribute to innovation and best practices by industry. Successful revenue and cost-cutting were required for inclusion in the results; collectively, respondents generated 16.1 percent of their revenue from new products and practices adopted in the past three years.
"The Midwest has been for many years a hotbed of innovation in manufacturing," says Dalby, pointing to medical device technology developers, such as Cardinal Health, as strong local innovators.
Smaller high-tech firms and supportive institutions play a crucial role, too, Dalby says. "I think of Homage, the T-shirt company here in Columbus that went back to the future [with vintage-themed apparel] and caught an interesting new niche in retail sales." Dalby also singles out local tech startup Acceptd as an innovator in revolutionizing fine arts college admissions with its online application solution.
Lisa Delp, executive director of the Ohio Development Service Agency Third Frontier Fund, says that synergy between large and small businesses, academic institutions, and civic and government agencies strengthens and grows Central Ohio's business ecosystem. "By and large, Ohio companies are really looking forward. They're thinking of innovation," says Delp.
The Third Frontier program spurs business innovation through commercial development grants to technology-based companies and large corporations with strong R&D initiatives, universities, nonprofit research institutions and other organizations. "If you're not as an organization innovating then you're not moving forward. And if you're not moving forward you might as well be moving backward," cautions Delp.
Plante & Moran's survey identifies four categories of innovation: accidental innovators, disciplined innovators, top innovators and superstars. Companies that stumble upon innovation by accident, embrace positive changes and develop future growth strategies around them are on the path to becoming superstars.
The chamber itself has become a model of successful innovation. "We changed up our business model and pricing model to help not just the chamber but the businesses we serve," says Dalby. "[We had to] change or become irrelevant."
Reprinted from the November 2012 issue of Columbus C.E.O. Copyright © Columbus C.E.O.