R&D Spending Pays Off in Minneapolis

Yesterday we blogged about innovation and how staying ahead of that curve is important for manufacturers. That’s true whether your company is large, medium or small.

Minnesota-based Tennant Co. has learned that lesson and has found a route to successful U.S. manufacturing through increased spending on R&D. Tennant manufactures industrial floor cleaners and, like many manufacturers, it has faced rising and cheaper competition from overseas. One option Tennant had and discarded was to move its production abroad.

According to a recent article in the Wall Street Journal and the Pioneer Press, the option its management took was to boost R&D spending to outwit the competition with signifcantly different products that would give it an edge:

In 2007, Tennant’s R&D spending was an estimated $23 million, the company says, up 38 percent from 2003. About 10 percent of that went toward developing breakthrough products.

Tennant brought in a new director of the research group, whose background was in aerospace and defense contracting. He and the team brought a new focus on improving technology rather than just durability. Engineers were encouraged to visit trade shows unrelated to their specialities to cross fertilize new ideas and that approach,, along with its new financial suport for R&D, worked for Tennant. To find out more about how this Midwest manufacturer developed new carpet scrubbers and other essential products for keeping factories, schools, malls and other large spaces clean, check out this very insightful article.

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