The buzzword among many small businesses is innovation--and it's not all product-driven. It's also about creating a worker-friendly culture.

"Research supports the thesis that good workplaces contribute to profitability," said Mary Corbitt Clark, executive director of Winning Workplaces, an Evanston-based clearinghouse on best workplace practices.

She pointed to a number of organizational studies, including one published in 2005 by consultant Watson Wyatt Worldwide, that backs the premise.

"Companies with superior human capital practices can create substantially more shareholder value than companies with average human capital practices," Watson reported.

Winning Workplaces consults with for-profit and non-profit firms and also publishes an annual Best Bosses list in collaboration with FSB: Fortune Small Business magazine. The 2005 winners included Evanston-based Go2Call.com Inc.

A positive work environment "is a complete package... there's not one silver bullet," said John Nix, co-founder of Go2Call. Started in 1999 with Larry Spear, the company provides voice-over-Internet protocol services worldwide.

The company's biggest differential "is a combination of open-book accounting [sharing financial results with employees] plus management by consensus," Nix said.

Keeping 30-plus employees fully informed about the company "helps people stay motivated," he said.

"We're interested in sticking with people who are in it for the long term," Nix said. "Our employees now average about four years with us."

Another firm Winning Workplaces cites for its creative retention strategies is Emmett's Tavern & Brewing Co. in West Dundee, which has had success keeping employees in an industry known for high turnover.

Andrew Burns, chief executive of Emmett's, a family-owned venture with about 150 employees, started the business in 1999 after a stint in the Marines.

"One of our strengths is that we know how to motivate and lead people," Burns said.

His father, Tim Burns, retired from a career in human resources to join him. Several of his siblings also have jumped on board.

In addition to the West Dundee location, the family operates restaurants in Downers Grove and Palatine and plans to open a fourth in Oswego later this month.

To keep his employees committed, Burns said he stresses "a certain level of professionalism" and employee communication. The company subscribes to open-book style accounting, holds regular staff meetings and publishes an employee newsletter.

Also unique is Emmett's once-a-year retreat for managers and a standing invitation for workers to spend a day helping brewmaster Ryan Clooney produce a batch of beer.

Burns said Emmett's turnover rate is 57 percent, compared with an industry average of 70 percent to 80 percent.

Working in a very different sector, Karen Laing started her Chicago-based business, Birthways Inc., in 1997. She also stresses the importance of staff communication. "For me, the culture is as important as doing the care," she said.

A for-profit service that offers non-medical support--known as doula service--for new mothers and their families before and after their babies are born, Birthways has 28 full- and part-time employees, she said.