FKI Logistex manufactures palletizers:. Here, a palletizer right out of the paint shop is inspected by Mike Mund, a body engineer, as he uses a flashlight to inspect for loose fittings and bolts. In an ever-changing business world, innovation is crucial for the survival of many companies.
But innovating is difficult to do, hard to maintain and not an automatic boost to the bottom line. Just ask 11 St. Louis-area based companies ranked among the top 500 most technologically innovative companies by InformationWeek Magazine.
The challenge in (information technology) is how to promote more money toward value building and less money to support the existing environment, said John C. Parker, executive vice president and chief information officer of St.Louis-based A.
G. Edwards Sons Inc. A.
G. Edwards devotes 80 percent of its information technology budget to maintaining existing technologies. The rest goes to developing new ones, said Parker, whose company has made the InformationWeek list four years in a row for its advances in technology that assists their clients and internal operations.
There is no single recipe for successful innovation. The companies on the InformationWeek list approach innovation differently. But they agree on one thing: To remain major players in their respective industries, change is vital.
The marketplace today has become so competitive, said Gil Hoffman, senior vice president and chief information officer for Maritz Inc., which made the list. If you don't differentiate yourself in some way, you are not going to grow.
The Fenton-based company has made the list six consecutive years for its advances in business and consulting services. Hoffman said innovation has deepened client relationships, giving the company a competitive advantage. We have a keen interest in evaluating areas for improvement and finding the new technologies that promise to have a positive impact, said Hoffman.
While the 11 local companies were cited for their technological advances, experts say businesses tend to innovate in areas other than technology. Defining innovation might be just as difficult as doing it. Jerome Katz, Coleman chair in Entrepreneurship at St.
Louis University, looks at it broadly. Virtually any creative way to improve revenue and profit, or strengthening customers' experiences, can be called innovation, he said. Companies can innovate in processes as well as products, said Jackson Nickerson, professor of organization and strategy at Washington University.
Processes can be internal manufacturing and operation processes as well as designing new processes that benefit customers. Innovation in biotechnology, medicine and a growing biofuels industry have put St. Louis on the map.
When it comes to innovation in St. Louis, we have a world-wide recognition in these areas, Katz said. Innovations don't have to be radical or major.
Many come from making incremental changes to current processes or products, Katz said. And in some cases, businesses are creative copycats, watching what competitors do and doing it better. More than 95 percent of businesses are imitative and not innovative, Katz said.
(But) businesses still need a twist; something that makes the business stand out in the minds of customers. This was true for Olivette-based FKI Logistex, which was not on the InformationWeek list. We do a healthy amount of strategic planning analyzing our strengths, competition and marketplace needs, said Ted Clucas, president of FKI's manufacturing systems division.
The company is a global manufacturer of automated cars and conveyors for products in the retail, food and beverage industries. One of the products is called a palletizer, a machine that loads packaged materials onto wooden pallets in warehouses before they are distributed. Clucas said FKI typically supplies the palletizers to large companies such as Coors, Target and Wal-Mart.
Smaller companies have inquired about using FKI's products, but they didn't need all of the functions or the cost of a standard, large palletizer. The larger palletizers can move up to 240 cartons per minute. FKI will debut a smaller 30-carton-per-minute version next week at a trade show in Chicago.
The smaller palletizers have three different models and will cost from $50,000 to $80,000, about a tenth of the price of the larger machines. If we don't do this, our competition does new products, features and services, ultimately capturing a new market share, Clucas said. Innovation is not an easy concept to define or achieve for businesses.
Simple change doesn't necessarily cover it. But history books cite lots of examples, from Benjamin Franklin to Thomas Edison. Innovation has been the hallmark of humanity in the golden ages, Katz said.
Nations prosper through innovation. Businesses use innovation to avoid becoming stale and to stay ahead of the competition, but not all innovations work out. Take the effort by employees of St.
Louis-based Trans World Airlines to save the company after Carl Ichan's takeover in the mid-1980s. TWA's employees had to innovate out of desperation, said Katz. They gave up pensions and other benefits to help the company recover from what Katz called Ichan's corporate greed.
But the effort failed after American Airlines acquired TWA in 2001. About 20,000 TWA employees lost seniority when they joined American's unions, resulting in layoffs when American reduced payroll after the Sept. 11, 2001, terrorist attacks.
Katz called the TWA case one of the most heart-rending stories in St. Louis, but cautioned that companies should recognize that they can learn from failed attempts at innovation. To keep innovating in your processes, you have to have an environment that is supportive for both failures and successes, Katz said.
Maritz Inc., Fenton: Provides services suite that includes a wireless handheld device that gives fast access to information on more than 50,000 attendees at conferences. A.
G. Edwards Sons Inc., St.
Louis: Has information security personnel conduct seminars for customers on ways to prevent identity theft to customers. Savvis Inc., Town and Country: Offers customers with multiple-function servers, fire walls and host systems through a process called virtualization.
Ameren Corp., St. Louis: Provides a map on its website that allows customers to see power outages by zip code.
Brown Shoe Co., Clayton: Adopted a process of manufacturing shoe samples that utilizes a 3-D spray-like technology instead of molds. Charter Communications Inc.
, Town and Country: Offers products such as digital video recorders and super fast high-speed Internet access. Graybar Electric Co., Clayton: Provides managers immediate access to reports evaluating company performance through an internal website.
Sigma-Aldrich Corp., St. Louis: Has an interactive website that allows researchers and scientists to make educated buying decisions.
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