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Editor's Note-Innovation, the Economy, and Government
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Editor's Note-Innovation, the Economy, and Government

As businesses continue to innovate, governors and legislators must learn to do so, too.

Innovation has become quite the business buzzword in recent months.

In a McKinsey Global Survey last October, 84 percent of executives considered innovation to be extremely or very important to their companies’ growth strategy. A month later, U.S. Senator Al Franken told a group of manufacturers in St. Cloud, “While times are tough, and many businesses are struggling, history has shown that some of our country’s darkest moments produce some of our greatest innovations.” During his January State of the Union address, President Barack Obama mentioned the word “innovation” 21 times.

Innovation undoubtedly is a key ingredient to a successful economy. And it takes “innovatives,” such as the 15 profiled in this month’s cover story (page 30), to make it happen.

One innovation can launch an industry, fuel the growth of a city, even help millions of people. Consider just a few that have come out of Minnesota:

 

Albert Butz invented the furnace thermostat, which became the basis for Honeywell (1885)

Edward Kendall and Philip Hench developed the anti-inflammatory medication cortisone (1948)

C. Walton Lillehei and F. John Lewis performed the first open-heart surgery (1952)

General Mills invented the flight data recorder (1953)

Dalhberg, Inc., marketed the first in-the-ear hearing aid (1955)

Earl Bakken developed the implantable pacemaker and started Medtronic (1957)

Control Data produced the world’s first supercomputer (1964)

The University of Minnesota performed the first pancreas transplant (1966) and the first kidney and bone marrow transplants (1968)

For many, innovation is an innate part of doing business or practicing a skill. Medtronic, 3M, General Mills, Pentair, Ecolab, and a long list of other companies simply keep innovating. For some, though, it can be seen as a threat, especially if they’re used to doing something the same way for several years, or used to running things the way they want. Innovation, after all, requires collaboration, which means letting others have a voice in how things should be.

Embrace it or resist it, the fact remains: You innovate or you die. It’s like evolution, survival of the fittest, the circle of life—you move forward to adjust with the changes that inevitably come up. It’s a matter of whether you rise to the occasion and change in creative ways, or simply follow along for the ride and risk eventually becoming less and less relevant to those you’re aiming to serve.

Take, for example, the conflict in Wisconsin between public-employee unions, Democratic legislators, and the Republican governor.

Unions were originally innovative. A key reason for unionizing was to set things up so management and labor had to work together. Both sides were forced to find new solutions to complex issues. Want wage and benefits to stay the same while revenues are flat and margins are shrinking? Help management find ways to improve workplace efficiencies and reduce costs. When disputes arose, most labor contracts called for the parties involved to resolve their differences through a grievance process—and if that didn’t work, through arbitration. The process was hostile at times, but still collaborative, and potentially innovative.

Today, unions are on the brink of extinction. While they started out with a clear focus on helping the average worker at the local level, they evolved into massive lobbying conglomerates playing in the world of politics, far removed from the factory floor or public employee cubicle. They evolved, but they didn’t innovate in ways relevant to society.

Then there’s Scott Walker, the governor whom Wisconsin voters had hoped would lead the development of innovative solutions for the state’s budget crisis and other pressing issues. Instead, he’s set things back by months, if not longer. It isn’t because of what he’s proposing or achieving. It’s because of how he’s doing it.

I’m not taking sides on the Wisconsin labor issue. But it’s odd that Walker starts out basically with “Screw you” to public unions, and that even when the unions agree to the cost reductions requested, he keeps trying to eliminate them (in essence, anyway). It’s also strange that he thinks it’s okay to divide his constituency—just when unity is what’s needed most.

Can innovation flourish in such an environment? Walker may win this and a few other battles. But Wisconsin’s union roots run deep, and starting a fight with a union can be like lighting a peat bog—it’s going to burn for years. That will add further uncertainty for Wisconsin businesses already worried about oil prices, the national economy, and other issues. It’s anti-innovative.

Meanwhile, here in Minnesota, DFL Governor Mark Dayton and Republican legislators in the state’s House of Representatives have their own complex issues to work through. But through mid-March, there’s at least some promise of collaboration and innovative solutions. Both sides agreed to an alternative teacher licensure measure, a pet project of former Republican Governor Tim Pawlenty. Dayton also signed legislation allowing environmental assessments to be done by corporations doing projects that require such reviews—a Republican-backed measure.

Albeit small, they’re steps in the right direction, demonstrating the desire to collaborate and the potential for two opposing sides to develop solutions to our state’s more complex business issues. Such solutions, and how they come about, would make our state stronger, longer, than the “budget repair” measures being forced on folks in Wisconsin.

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