Fast Company produced its list of 100 best workplaces for innovators. Companies committed to unlocking the potential of creative individuals and as a result the best companies to work for as an innovator in 2020. It expanded this year’s list to companies, schools, and nonprofits of all sizes. The list is certainly impressive, with ASLAC/St Jude, Google, Johns Hopkins University APL,  Dell Technologies, and Boston Scientific forming the top 5. It is however alarming, that service organizations are so underrepresented in this ranking, especially in this day and age.

Service organizations

Service organizations account for 68% of GDP in the USA, as illustrated in a picture from a Deloitte insight report, see below. Therefore, you would expect around 70% of the firms on the Fast Company ranking of 'best workplaces for innovators' to be service firms. Yet, technology companies seem to be dominating the list. That is bad news from an innovation or organizational perspective.

The difference between product and service firms

"Organizations can be divided into two broad categories: manufacturing organizations and service organizations, each posing unique challenges for the operations function. There are two primary distinctions between these categories. First, manufacturing organizations produce physical, tangible goods that can be stored in inventory before they are needed. By contrast, service organizations produce intangible products that cannot be produced ahead of time. Second, in manufacturing organizations, most customers have no direct contact with the operation. Customer contact occurs through distributors and retailers. For example, a customer buying a car at a car dealership never comes into contact with the automobile factory. However, in service organizations the customers are typically present during the creation of the service. Hospitals, colleges, theaters, and barber shops are examples of service organizations in which the customer is present during the creation of the service" (source).

We know from our research and experience, that unlocking the potential of creative individuals is even more important in (professional) service organizations than in product companies.

Service organizations featured

There are a few service companies featured on the list, two even in the top five. But a closer look, reveals that we are not comparing apples with apples here. Take for example these companies in the top 5.  Google, Dell technologies, and Boston Scientific are nominated as companies. Whereas St Jude and Hopkins - the two service organizations - are features as teams within these organizations, respectively the ALSAC and APL teams.

I don’t want to take anything away from the creativity, innovativeness, or awesomeness of these teams. Take for example the ALSAC team, they put St Jude on the map with their very innovative fundraising efforts. However, the innovation culture is that of one team, not the entire St Jude’s hospital organization. The same holds for Hopkins university’s third rank, which is lauded for its APL research facility, not for the entire university.

You may think that this is because service companies have many more employees, which is true. And these are certainly large organizations with many employees. Hopkins for example has 30,000 employees, and the APL research facility houses 5000 of them. However, Google is an even larger organization and it is the best workplace for all its 114,000 employees.

In that sense, AARP is a better example of a service organization that is a great workplace for innovators, as its innovation lab is accessible for all its 2250 employees.