Working smarter

Why innovation is so important in changing industries

Some industries are in the midst of ongoing radical change, while in others, change is incremental. Regardless of its pace, change is inevitable. To keep up, businesses need to be willing to adapt and innovate – or risk falling behind.

Today, as much as ever, change is on the horizon. Marketplaces are becoming increasingly competitive, likely as a result of access to new and emerging technologies, the internet and an open global economy. While all of these could be seen as positive changes for business, a quick look into the recent past shows that not everyone has benefited.

Take Sony for example. The tech giant that wowed the world with the Walkman and the Triniton TV was once seen as untouchable. But, after reporting its biggest ever loss of $3 billion in 2012, the company quickly ended up in a fight for its life. Much of this can be attributed to Sony’s unwillingness or inability to adapt at the time, causing it to miss out on just about every big advance in consumer electronics.

As a result, nearly every area in which Sony competed was impacted by disruptive new technology and unforeseen rivals. Apple came along with the iPod in 2001, flat-panel display TVs arrived, and the rest is history.

While it’s no longer a conglomerate in freefall, there’s a lot to be learnt from Sony’s once stunning decline. Arguably, the biggest takeaway is that innovation is critical. Your core business needs to be able and willing to evolve fast enough to meet the demands of the new market – even if you risk making yourself obsolete. Or, as Apple’s founder Steve Jobs put it: “If you don’t cannibalise yourself, someone else will.”

What is business innovation exactly?

Fundamentally, innovation means introducing something new into your business.  This could come in the form of:

  • new products, services or processes
  • practices that add value to existing products or services
  • ways to increase your business’s efficiency or profitability.

At the very least, an innovation is new to the business, but it can also be considered ‘new to market’, when it’s new to the competitive set within a geographic region or product line, ‘new to industry’, ‘new to country’, and even ‘new to world’ if it’s the first of its kind.

There is more than one way to innovate and plenty of reasons for enacting change. For some, it may be in response to changing consumer demands or to find a new way for the business to generate revenue. For others, it may be necessary to move into a new industry altogether. This was the case for Australian-owned farming cooperative Oz Group.

Innovate or die

Officially formed in 2001 as Oz Berries, the co-operative started as a partnership between four banana-growing families in the Coffs Harbour region of the NSW mid-north coast. Beset by a number of ‘banana gluts’ (periods of oversupply that drive prices for the commodity below their cost of production), farmers in the region were beginning to worry that the banana trade, which operated on small margins already, had become volatile.

A move to berries saw the group expand to 18 growers, open their first purpose-built packing facility and, in 2013, launch Oz Group Co-operative. Today, they’re the largest producer and grower of blueberries in Australia with over 150 growers and a turnover of roughly $160 million.

How did they go from almost defeat to king of the mountain? Oz Group CEO, Brett Kelly, says it’s a result of non-stop commitment to innovation. “While quality standards – from the farm through to the finished product – are important, the biggest driver for us at Oz Group is the front-end of the business.”

He goes on to describe an oft-told tale of farmers investing all their energy and resources into the back-end of the business – that is, the actual growing and harvesting of the fruit. This can often leave businesses vulnerable to the pesky winds of industry change.

“It goes without saying that a lot of thought needs to go into best practice and the quality of your product, but if you don’t sell, you could end up in a situation where you have too much and the price is affected,” says Kelly.

This motivation has seen the company invest roughly $5 million in state-of-the-art processing machines, plant technology, agronomists and field officers. It also encouraged them to partner with industry experts like Driscoll, to help them access new markets in Australia and offshore.

As a result, Oz Group now exports berries to Hong Kong, Thailand, Singapore and Malaysia, with plans to add Japan and China to the list in the near future. “We’re developing export channels so we can grow – and sell – as much as we want,” explains Kelly.

Fruit or furnishings: Innovation is the same

Kelly, who was previously the CEO of Norco, an Australian-owned dairy co-operative, argues that milk or fruit, the same principles apply when it comes to promoting business innovation. He recommends following these five basic principles, and innovative thinking is sure to follow:

1. Find your experts: Employ people who are specialists in their field and who can bring fresh thinking to your organisation.

2. Establish partnerships: The right partnerships are the gateway to opportunity and understanding your industry.

3. Train your teams: Training is an investment in better practice, improved efficiency and quality of your product and service.

4. Have a strategy: A clear understanding of who you are in the market and what your point of difference is will help you focus your efforts on improvements that promise a capital return.

    Stay knowledgeable: Make a commitment to understanding your customer and the market and you’ll soon be able to make predictions about the future of your industry – and innovate accordingly.

Found this useful?

Subscribe to our newsletter and receive the best business tips and articles straight to your inbox.

Thank you for signing up to our newsletter. You're one step closer to receiving more insightful information to help better your business.

We take your privacy seriously and by subscribing to our newsletter you agree to the terms of our Privacy Policy available below.