• The Wall Street Journal, Monday, January 28, 2008 11:45 AM

Tennant--a big name in the small market for industrial floor-cleaners--faced stiff competition from cheap imports and a slowing economy in 2002. That October, Chris Killingstad, then the recently installed head of North American operations, visited a trade show and decided that every product looked alike. He convinced management to place a big bet that it could outsmart its competitors with innovative products.

It worked. In 2006, Tennant had a profit of nearly $30 million, up from just over $14 million in 2003. Along the way, the company has had to persuade customers to buy machines that clean in markedly new ways and sometimes had to bet heavily on products that showed promise but needed more funding to exploit their potential.

Killingstad became president and CEO of Tennant in 2005. The company's decision to push innovation over cost-cutting mirrors that of several other successful U.S. manufacturers. Like home-appliance giant Whirlpool, motion-and-control-device leader Parker Hannifin and others, it gambled a substantial portion of its resources to developing products that anticipate and solve customers' needs.

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