Cheryl Grisso never thought of herself as a creative type. Grisso, an accountant at West Paw Design, a manufacturer of pet accessories in Bozeman, Montana, spends most days poring over invoices. Nevertheless, one day last summer, she found herself on the company's production floor scavenging for fabric in a garbage can and gluing pompon eyes on her own creation: Wooly the Mammoth, a squeaky toy for dogs.

Grisso was taking part in a companywide design competition started at West Paw two years ago. Once a year, the company's 36 employees, from salespeople to seamstresses to the president, Spencer Williams, spend an afternoon designing and producing prototypes for new products. At the end of the day, staff members vote for their favorite designs. The winner receives the company's coveted Golden Hairball Award, an Oscar-inspired statuette topped with one of the company's cat toys.

West Paw's production manager, Seth Partain, came up with the idea for the contest after the company's five-person research and development team developed a case of collective writer's block. Hungry for ideas, the team encouraged employees to submit product suggestions on the company's wiki or by filling out forms in the break room, but only a few ideas trickled in. The company, which had been producing mostly eco-friendly pet products since Williams took over in 1996, was also facing increased competition from rivals eager to capitalize on the craze. "When we realized this eco thing would catch fire, we knew if we didn't have a pipeline of great ideas, the competition would take us over," says Williams.

He and Partain came up with a few ground rules for a contest. Teams of three would be assigned randomly by picking names out of a bowl, and they would have an hour and a half to come up with designs. Groups that created physical prototypes would have a greater chance of winning, and each entry had to include a name. At 2 p.m. on a Friday in mid-June, employees gathered on the floor of West Paw's production facility. With the clock running, they began to sketch designs and peruse materials laid out on a long cutting table. Two production staff members helped contestants work the sewing machines. By 3:30, the break-room table was covered with dozens of prototypes. "People were pumped," Williams recalls. "I was excited when I saw everything spread out on the table."

The staff voted by secret ballot, and Partain announced the winner: the Eco Bed, a stuffed dog bed made out of recycled materials. It was created by salesperson Sarah Acker, seamstress Suzie Traucht, and Tonya Tuliback, who works in West Paw's shipping department. The trio was given a $100 Visa gift card to share -- Williams wants recognition to be the main motivator, not big prizes -- and, of course, the Golden Hairball statuette.

The group's collaboration accomplished one of the contest's major goals: to encourage cross-pollination of ideas from employees in different areas of the company. For instance, when Traucht and Tuliback were thinking about making a dog bed out of the company's usual upholstery, Acker mentioned that more pet shops were requesting eco-friendly products. With that in mind, the team opted for a fleecy fabric made from recycled plastic bottles, a fabric that had previously been used for toys. Six months later, West Paw rolled out the design as part of its fall product line, and it was an instant hit. This year, the company began offering the bed in two patterns.

Most prototypes don't make the cut. Employee creations like the Barkerina, a plush dog toy shaped like a ballet slipper; Cat Truffles, catnip toys shaped like chocolates; and Roger, a dog toy made to look like a giant tick, may never make it into pet stores. Still, the contest has provided plenty of creative fodder for the R&D team, which meets after each contest to vet submissions. "It's not about producing things we can sell today," Williams says. "We look for one piece of a new idea." He is careful to focus on the positive attributes of each design and offers specific reasons why any given product would not work -- a toy might have safety issues, for example, or cost too much to produce. "You can't fire-hose ideas because they aren't perfect," Williams says. "If you do, employees will feel undercut and vulnerable."

The Golden Hairball has had the opposite effect on Grisso. When the accountant first heard about the contest, she was nervous. "I wondered if I could do it," she says. On the day of the contest, she and her teammates finished up their first prototype with time to spare. That's when Grisso spied some furry fabric in a nearby garbage can and got the inspiration for Wooly the Mammoth, which received an honorable mention. "We were all surprised by what we came up with," says Grisso, who now dreams up ideas for new products on a regular basis and even won a virtual-brainstorm contest on the company's wiki recently. "Other companies just want you to do your job," she says. "This competition has given me the chance to offer my opinions."