In the wake of the pandemic, business leaders continue to face unprecedented challenges. With the economy so deeply impacted by the global crisis, there has been concern that companies would struggle to survive. Indeed, many have not. Those who have weathered the proverbial storm have learned from the experience.
They are rising to meet these ongoing challenges with confidence and purpose that will propel their organisations into the future. In this year's annual global survey of business leaders, we explored how strategies for innovation are driving growth, evolution, and adaptability in the face of an increasingly unpredictable world.
As we scrutinised the agriculture and food sector data, we discovered leaders are increasingly reaching for opportunities to innovate, with 96% agreeing that more rapid and effective innovation is critical to future growth. In addition, 91% cited market disruption as their primary motivation for innovation, while 84% found they have greater confidence in their ability to innovate now than pre-pandemic.
So, what are the key ingredients needed to increase innovation capacity in the agriculture and food sector?
Smart use of technology
While customer feedback remains a powerful enabler for business leaders in the agriculture and food sector, that top spot is now shared equally (41%) by emerging technologies. Technological advances and the integration of technical solutions have been paramount in ensuring business continuity over the last two years. The sudden demand for remote working followed by the shift to hybrid work models has proven to many how technological innovation can reshape the way we work for the better.
While agriculture technology innovation can cover a broad range of initiatives, at the forefront of new technological solutions identified by business leaders in the sector as the most critical digital technologies are RPA, Cloud technologies, and Blockchain. RPA led the list of new technologies important to the sector with 48% of the vote, while 41% went to the Cloud and 30% to Blockchain.
Meanwhile, most business leaders focus their innovation on customer engagement (57%) and new product development (54%).
Harnessing emerging technologies will be critical for successful innovation. Agritech and foodtech are about to become more vital than ever to future-proofing your business. However, it's not just about digital technology. Almost as many business leaders ranked non-digital tech as necessary for innovation, with renewable energy standing tall above the rest, with 71% stating it as essential for the business's future success.
Understanding customer feedback
While tech may be the top point on most people's minds, customer feedback is still a very close second. Regarding key enablers, 41% of agriculture and food business leaders rank feedback as a driver of innovation equally crucial as access to technology.
The prevailing thought process in the industry is that while technology can facilitate innovation, the direction that innovation takes should be guided by informed insights into real-world customer needs.
This is also reflected in the belief that attaining new knowledge (ranked by 30%) is a vital driving force for innovation and change. However, the source of that new knowledge, it would seem, is frequently drawn from consumer feedback rather than independent research.
So, what is the result of all this focus on the customer?
With over a quarter of business leaders in this sector considering themselves far more innovative than industry peers, innovation efforts are being channeled towards improving customer engagement.
This is reflected in many of their additional concerns, showing a trend towards ensuring consumer satisfaction and engagement.
Some 73% of leaders are looking to improve their operational efficiency, while 47% are looking to reduce costs, and 41% are focusing on launching new products or services. These three areas represent the top three actions agriculture and food business leaders are looking to take in 2022 to grow the business. With this in mind, the need for customer feedback and data is quite apparent; both are critical ingredients for driving innovation.
The right people
While there's no doubt that innovation is the name of the game in the industry at the moment, it is not without its setbacks. Many business leaders throughout the agriculture and food sectors are convinced that successful innovation is the key to success. However, they all face a common challenge: putting the right person in the proper role with the right capabilities.
Talent is in incredibly high demand. Top-tier technical talent is increasingly hard to come by, with companies facing fierce competition when recruiting the best of the best. So, while business leaders are keen to rise to the challenge and innovate, they are frequently lacking team members with the appropriate level of technical knowledge for creative wizardry to implement any change successfully,
Indeed, talent acquisition has been identified as the second greatest weakness in the business, with 46% of industry leaders citing it as a significant issue that needs to be addressed in 2022.
The apparent dearth of great talent is, in part, a macro-economic issue that isn't likely to be resolved any time soon. And yet, the talent gap is not an issue confined to the agriculture and food sector. Many other industries, particularly those driven by technology, have faced similar problems.
In one respect, the pandemic has aided this issue, as it's provided the perfect solution to one barrier to finding great new hires: geography.
The rise of remote working has undoubtedly broken down boundaries, and with so many companies choosing to remain remote-first or switch to entirely remote operations, geography doesn't play such a crucial role.
In this sense, the lack of talent is also a micro-issue that is well within the control of innovation leaders. Intelligent businesses ensure good staff diversity and diversity of thought to provide a solid basis for their innovation strategies. Hiring remote workers is one way of doing this, as you are no longer limited to a pool of talent within a specific geographic area.
With 96% agreeing that a more diverse workforce will improve your team's ability to innovate, it's clear that the leaders of 2022 are far more open to diversifying their workforce and hiring practices than they were before the pandemic.
Strong leadership is an absolute necessity
Putting the right people in the right roles isn't just limited to those on the frontline of innovation and strategy. For example, 27% of existing leaders believe that it pays to be bold in your leadership style and that this is crucial to improving your organisation's innovative capacity.
In addition, a lack of vision on the part of leadership is seen as a barrier to innovation. Yet, oddly, 98% of leaders feel confident in their ability to challenge the way things get done in their organisations.
The execution challenge
The use of new technologies, the utilisation of customer feedback and data, and the provision of the best talent in the right roles is undoubtedly a potent recipe for successfully increasing innovation. Yet a recipe is more than the sum of its ingredients. To successfully increase innovation capacity, agriculture and food business leaders must overcome the execution challenge.
While these can be many and varied, the top three barriers to innovation identified were the capabilities of people (with 41%), company culture (with 39%), and lack of vision (with 38%).
The capabilities of individuals tie back to our discussion on the talent gap and the problem inherent in finding the right people. Interestingly, company culture has similar ties. One method recruiters and talent scouts are using to attract top talent is a heavy focus on developing company culture.
The notion is that the more appealing your company culture is, the more inclined they will be to work with you. Switching to hybrid and remote working models has proven to be an effective tool for them in this regard, as it gives access to a greater pool of talented individuals and reassures them that they will be able to continue to reap the rewards of being home more often.
Many workers are unwilling to continue in their current roles with their current company unless that company adapts to the change. At least some of the time, those unable to work from home have been actively searching for alternate employment to avoid returning to the office full-time.
This creates an opportunity where recruitment is concerned to capitalise on remote working culture and the popularity of the 'work from wherever' crowd, snapping up top talent by focusing on the improvement of company culture.
How are leaders funding innovation?
While it's apparent that change is at the forefront of everyone's minds, innovation does not - generally - come without a price tag, and often a fairly hefty one. So how has leadership been funding the drive for innovation?
Surprisingly, only half of the leaders surveyed have set aside a dedicated innovation budget. More than three quarters (79%) are funding innovation through cash flow. This presents a potential problem for the longevity of these innovation initiatives, as 70% and 63% ranked economic uncertainty and inflation, respectively, as the raking top risks to business and thus cash flow.
While it's clear that the current buzzword in the agriculture and food sector is innovation, it's unclear how long leaders will be able to maintain their efforts in the face of economic uncertainty.
With funding for innovation set to become more difficult in the near future, this is a bandwagon to jump on sooner rather than later.
About our research
Findings in this article are based on 56 survey responses from agriculture and food business leaders collected in quarter 4 of 2021, as part of HLB’s Survey of Business Leaders 2022. The majority of businesses surveyed are privately or family owned.
Get in touch
If you would like to find out more about our services check out our Food & Agriculture page or contact Mark Butler on 01-2915265 or at firstname.lastname@example.org