Australian
Agri-Food 2000 Research Forum
Melbourne August 17
Innovating Australia 2000 Report May 2000
Jeff Hastings
Centre For New Industries Development
Agriculture Western Australia
Prepared by: School of Commerce Murdoch University
| Executive Summary |
| Summary of the results |
| The Innovation Process for Australian Agribusiness |
| Conclusions |
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Innovation is often regarded as the single most important factor to the long-term survival of a business. Thus this research seeks to understand how Australian agribusiness firms can foster innovation in their firms, and to develop a framework to assist firms with this process. In particular, the research problem is: How can Australian agribusiness firms increase their ability to innovate and develop new products and industries?
Despite more than three decades of empirical research there still is not a prescription for successful innovation within firms. However, recent literature allowed the development of a framework built on the staged format of culture, process and implementation. Culture is associated with creating an environment conducive to innovation. Process is incorporated innovation across the functional business area, while implementation is associated with putting the whole strategy into practice.
The research used case study methodology for 39 sites across three regions of Israel, United Kingdom /Europe and Canada/United States. Four streams made up of participants in the Innovating Australia 2000 Tour collected the data. There were four to five members in each stream. The case data were analysed using qualitative and quantitative techniques, particularly cross-case analysis, matrix displays, pattern matching, ranking and geographical displays.
The findings revealed several outcomes. Firstly, the research identified that successful firms have both formalised activities to foster innovation but they also have behavioural aspects in place (termed the X factor in this report) that together make these companies special. Formalised activities included areas such as teamwork, staff training and development, planning and controlling, relationship marketing, networking, supply chain management. While the X factor showed behavioural aspects such as encouragement of ideas, having a positive attitude, striving for improvement as equally important.
The top six critical success factors for innovation was identified as initiating new product development and product adaptation, relationship marketing, technology, networks, investment in human capital and government assistance.
This study provides a framework for fostering innovation within rural Australian firms. It provides a guide to the formal activities employed by highly innovative and successful companies as well as highlighting many of the behavioural "X" factors that have been determined to be so importance in the innovation process.
This research was conducted to answer the research problem how can Australian agribusiness firms increase their ability to innovate and develop new products and industries? This study concludes that firms can develop innovation in their firm by following the framework for innovation that has now been adapted using the results from this study, as shown in the table below.
The Table shows that innovation is a three stage process of building a culture for innovation within the firm, providing a process in which innovation can take place and allowing for the implementation of innovation. This study found that innovative firms use both formalised activities and what we have termed as X factors to create innovation in their firms.
The Innovation Process for Australian Agribusiness
| Stage | Areas | Formalised Activities | The X Factors |
| Culture | Human Resources | Teams
Key individuals Reward staff Staff training and development |
Encourage ideas
Embrace change |
| Organisational Structure and Management | Flatter management
systems or multidisciplinary teams
Invest in quality people Open communication Commitment from all levels of management Shared values and visions Leadership |
Positive attitude to
work and environment
Ownership and belief in the innovation process Entrepreneurial |
|
| Process | New Product Development | Commercial focus
Teamwork Time to market Planning and control Product improvement |
Can-Do attitude
Strive for improvement |
| Marketing | Relationship marketing
Be the market leader (first) Build an image Build a brand Market research |
Building trust and
commitment with customers
Listen to the customers A belief in being the best |
|
| Production | Market focus
Cutting-edge technology Quality systems Cost control Protection of intellectual property |
Ways to do things better | |
| Finance | Targeted research
Internal vs. external funding Budgeting Risk assessment |
Preparedness to accept risk | |
| Implementation | Macro environment | Access government
programs
Evaluate economic conditions Apply latest technology Monitor competition |
Be active politically
Keep up to date on all developments regarding your firm |
| Networks | Knowledge exchange
Promote image and positioning Out-sourcing needs Opportunities |
Talk and share ideas
with everyone
Look for opportunities |
|
| Customers | Customer service
Build relationships Communication Data management |
Exceed customer
expectations
Provide feedback from customers to firm |
|
| Suppliers | Relationship building
Supply chain management Integrate systems |
Think of suppliers as being on the same team |
Culture
Culture is about providing an environment for innovation to be developed in
the firm. The business area of the firm it is associated with is human resources
and organisational structure and management. The formalised activities include
using teams, rewarding the staff, training and development, flatter management,
investing in people and communications.
The X factors are behavioural and concerned with providing an environment that allows the firm to be innovative through the generation of new ideas but to also feel that it is safe to change and indeed good to change. Change was seen as necessity to stay in business; therefore having a positive attitude, believing in the process and having an entrepreneurial flair were considered an essential part of the innovation package.
Process
Process is the way innovation can be incorporated into the functional areas of
the business; new product development, marketing, production and finance.
Formalised activities included having a commercial focus, planning and control,
relationship marketing, cutting-edge technology and risk assessment.
These factors worked together with X factors such as a can-do attitude, building trust and commitment, a belief in being the best and looking for ways of doing things better.
The final stage is implementation as innovation is rarely kept within the boundaries of the firm. Formalised activities as accessing government programs, evaluating economic conditions, monitoring competition, exchanging knowledge, building relationships and supply chain management were complemented by X factors such as being political active, keep up-to-date on developments that will affect your firm, talking and sharing ideas, exceeding customer expectations and thinking of suppliers as part of your team.
In conclusion, this study found that innovative firms adopt a range of formalised and X factors to be successful in their industries. This study recommends the adoption of the same techniques listed in the table above, for the fostering of innovation in Australian agribusiness.
The managerial implications of this study are that it provides a framework for fostering innovation within a firm. That is, it gives managers a guide to the formal activities that should be incorporated together with the behavioural "X" factors that are an integral part of successful innovative firms.
This project was supported by -
- Agriculture Western Australia
- Agriculture, Fisheries & Forestry Australia
- RIRDC
- Primary Industries and Resources South Australia
- Queensland Department of Primary Industries
- Natural Resources and Environment Victoria
- ACER
- Ericsson
