Innovation deserves more than lip service


Without an understanding of the benefits innovation can bring, it can be difficult to envision exactly how it translates into practice for your organisation. Let’s look at Marel who have grown from a small business in Iceland to a Global Powerhouse in their sector.

What Does Investing in Innovation Give You?

Many organisations will claim to have an innovation strategy. Dangerously for some this can equate to a tick box exercise. They have a strategy, but how does that manifest into practice.

Developing an innovation programme and fostering a suitable culture throughout your organisation requires a much greater level of commitment. The results however can be spectacular. Marel commits 5-7% of all revenue to innovation - last year alone this resulted in $60m being invested. A substantial step to take and one which has played a part in the company growing turnover to over $1 billion.

Iceland has a population of approximately 335k, and with labour costs significantly higher than most other countries, Marel adopted the innovative approach to invest in food processing machinery to improve production time and increase yield. Development of bespoke machinery and automation has produced equipment that removes the two sides of a fish and in just 1.2 seconds portions the fillets ensuring that the product is ready to be flown around the globe to be consumed within 24 hours.

While Marel’s hi-tech approach to production may be costlier initially, it offers a more productive and reliable approach to food processing which increases profits for their business. Many of these innovations of the past have become the standard for the industry.

Informing Your Decisions

Committing to such a significant investment can be daunting. Many organisation leads would struggle to win over the relevant stakeholders without providing a compelling list of justifications.

When Marel first entered the Chinese market 15-20 years ago, they struggled to fulfil demand. In order to increase efficiency and productivity, it was clear they needed to invest in the mechanisation of fish processing. Within 2 years the brand had grown so much that it began selling equipment to Canada and the USSR (Russia).

Research and data ensured that Marel knew by investing in innovation they would decrease production time, reducing waste and increasing yield.

Commit to Innovation

If Marel decided to cut back on their investment and incorporate more human labour into the production process, they would have missed out on some revolutionary ideas. This would have severely limited profits and expansion. Marel’s business model now sees it make 60% of its income from sales, and 40% from after sales servicing and maintenance.

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