Small Business Drives Innovation In New Economy
By Samuel Fromartz
Saturday May 8 2:49 AM ET
WASHINGTON (Reuters) - You probably know someone who works out of their home, collaborating by e-mail with other associates, breaking off in the middle of the day, then working again late at night.
Or perhaps you've heard about companies where traditional production-line relationships have broken down and teams run the process.
Then there are companies who were once fierce competitors who have decided to bury the hatchet and share their expertise. The high-tech industry is littered with examples.
A soloist's flexibility, manufacturing teams, corporate cooperation -- it's easy to see something's afoot in the economy. What is difficult, though, is to grasp the patterns that link this discrete activity.
It's those patterns that interest Thomas Petzinger Jr., a longtime Wall Street Journal reporter and editor. In his recent book, The New Pioneers: The Men and Women Who are Transforming the Workplace and Marketplace (Simon and Schuster), he tries to make sense of this new economy.
To do so, he turns to biology -- finding the way natural systems are reflected in the economy itself.
Innovation, or evolution, occurs at the margins, at the point where the forest meets the swamp, where different species and ecosystems intermingle.
This isn't a mechanical model of development -- like an assembly line -- but rather one based on experimentation, feedback and adaptation. This model is especially prevalent among small companies.
''Innovation is occurring down in the trenches,'' Petzinger said in an interview. ''When you're just two payrolls from going under, you've got to explore and invent, so the early adopters tend to be small- and medium-sized firms.''
The book is peppered with examples -- much of it culled from Petzinger's Front Lines column in the journal. But in telling these stories he also illuminates broad principles that appear to underlie the new economy.
What's in, he finds, is collaboration, cooperation, constant improvement, improvisation and values -- and he devotes nearly a chapter to each subject.
What's out are the traditional models of competition, command-and-control management, hierarchy, planning and business for business' sake.
To be sure, what Petzinger finds is not universally shared or acknowledged. One need look no further than the book title by Intel CEO Andrew Grove, ''Only the Paranoid Survive,'' or the author's favorite example, Albert ''Chainsaw'' Dunlap, known for his serial firings at Scott Paper and Sunbeam.
But across the economy, companies are following a new and more enlightened paradigm in which work is no longer viewed as a means to satisfy needs (such as food and shelter) but rather becomes a way to express one's own identity.
Supplanting necessity with fulfillment partly comes with affluence: baby boomers who have made money and achieved success in their careers might be looking for better ways to express who they are.
And those values may include looking at the relation of oneself to one's community and environment. ''No doubt these sort of values have been present but not nearly as widely as they are now,'' Petzinger said.
He describes a billion-dollar carpet manufacturer that completely changed the way it handled its resources and waste because of concern about its impact on the environment. He also writes about a Harvard MBA who began a business employing inner city kids as Web page programmers.
These values-driven companies, however, do not exist on their own. Rather, because they thrive on trade they become linked with others trying new approaches as well. They become one of the species in the economic swamp where innovation, adaptation and evolution are occurring at a rapid pace.
In this new world, it seems, it isn't the paranoid who survive. It's the collaborators.
(Sam Fromartz is a Washington-based journalist who covers entrepreneurs and emerging companies. He can be reached by e-mail at entrepreneur(at)iname.com. Any opinions here are his own). |
