Balancing innovation and growth Featured

9:36am EDT July 22, 2002

Innovation is at the core of A. Malachi Mixon's business philosophy.

The chairman and CEO of Elyria-based Invacare has proved himself a titan of the home medical equipment industry by building a global public company with annual revenue of $875 million from a small wheelchair manufacturing firm he and a group of investors purchased from Johnson & Johnson in 1979.

"Innovation in health care" is the company's trademarked slogan and one that fits it well. Mixon orchestrated the purchase of the firm 21 years ago by way of a leveraged buyout, a then nearly unheard of financial transaction. Over the years, Invacare has acquired 35 companies and become the most powerful distributor in the home health care market.

"We're always challenging everybody not to accept the status quo," explains Mixon, when asked how he keeps the fire of innovation burning inside such a large company. "I ask how can we get better ... What are your plans to improve and how are you going to measure that improvement? That's something that permeates our company."

His experience in leading Invacare from its modest roots has given him a clear view of what it takes to balance being an industry innovator while also handling the inevitable growing pains of a successful company. Recently, Mixon sat down with SBN to share how he keeps Invacare on the right track and ahead of its competitors.

Never underestimate the competition

If you think that tiny company with barely a shred of market share is no threat to your secure industry foothold, Mixon says your success might already be slipping away.

Today, Invacare dominates the health care equipment market, but it wasn't always that way. There was a time when Mixon was the small fish, trying to chip away at a deep-pocketed competitor that had incredible industry reach but had grown stagnant from the inside out.

"The major thing that happened was a principal competitor didn't realize we were a serious threat until it was too late," recalls Mixon. "As they began to react, they were lumbering and lethargic and weren't creative and weren't really coming out with innovative products. As we began to take them by storm, their only response was to cut price and brutalize us in order to hurt us.

"It just made us more resolute, our people were even more committed that we were going to beat those guys."

The hunger with which he and his employees fought to become a market leader is never far from Mixon's mind. Today, as a global leader in the wheelchair market, he makes it a point to constantly take a hard look at whether there are weaknesses in his company that competitors could use to their advantage.

"I would say to my credit department, 'How do you know you're any good? Who are you comparing yourself to? Who is your benchmark?' he says. "You really have to benchmark yourself and not have a big ego because there is always somebody doing better than you are."

Listen to your customers

Mixon wants his customers to tell him what they don't like about Invacare and its line of products. Praise is not necessarily bad, he explains, but it is not what drives innovation.

"You have to have the mentality that no matter what you're doing, it isn't good enough for the customer," he says. "The day you think you're good is the day you're going to get in trouble."

Listening to customers is what has driven Invacare to the top of the industry and helped it evolve products like wheelchairs from their former stiff, strictly operational look to today's models that offer designer colors, added comfort and a sleek design. Mixon looks at the relationship between Invacare and its customers as more than a simple business relationship.

In fact, the company listened when many people with disabilities voiced their frustration about living in society that refused to accommodate people with physical limitations. That resulted in Invacare sending a lobbyist to Washington and the development of a governmental affairs arm of the company -- positions that exist at Invacare to this day.

"There's really no magic to why companies succeed, but I think that most of the ones I know have an insatiable focus on the customer," he says. "Most of the successful entrepreneurs and builders of businesses are very, very customer focused. They have a vision of a need that hasn't been satisfied, and they keep innovating to continually give the customer something better."

Fight bureaucracy

One may wonder how the CEO of an $875 million company with locations scattered across the globe can spur innovation and manage change. Mixon says it is not all that difficult once you trust others inside your organization to make decisions that would eat away at time, bog down those in the top office and expose the company to the risk of becoming stagnant.

"I can guarantee you that there are hundreds of decisions being made today about individual products and pricing and design and strategy that aren't coming all the way up to the top floor," says Mixon, sitting in his second floor office at Invacare's Elyria headquarters. "You have to release that, and a lot of entrepreneurs have trouble releasing because they've been successful. Therefore they think they're smarter than everyone else and should make every decision."

But, if you want to attract young creative minds to your organization, Mixon says cutting away the red tape will separate your company from the old-line, stodgy corporations in which those new to the American work force have no interest. In the end, it's about survival, and much like a champion boxer, it is the company light on its feet with a killer punch that is going to have the competitive edge.

"Companies that get bureaucratic and lumbering start losing the lightness on their feet and the ability to move quickly so the competition is surprised and doesn't have time to react," explains Mixon. "It's an issue that every company that grows has to think about and it's something I worry about a lot in terms of trying to keep the culture and the process alive." How to reach: Invacare, (440) 329-6000

Jim Vickers (jvickers@sbnnet.com) is an associate editor at SBN.