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Investing in innovation: The key to 11% annual growth over 25 years

3-minute read

Bernard Bélanger - Founder of Premier Tech

Bernard Bélanger thrives on watching the beehive of activity outside an expanse of windows in his office. Employees are loading trucks with products from his company, Premier Tech, destined for U.S. customers. Fork-lifts are whirring around the loading area.

And off to one side is Bélanger’s pride and joy — Premier Tech’s innovation, research and development (IR&D) centre. The ultra-modern, 2,000-square-metre building is the reason a humble peat moss harvesting concern in Rivière-du-Loup, 200 kilometres northeast of Quebec City, has grown into a $500-million conglomerate that is considered one of the most innovative businesses in Canada.

The IR&D team represents 200 of Premier Tech’s 2,000 employees, including 10 PhDs. The company invests 3% of revenues in its IR&D activities.

Thanks in large part to a constant stream of new products from the centre, the company has aver-aged an amazing 11% growth rate per year over the past quarter century. More than one third of the company’s annual sales comes from new or significantly modified products that the company didn’t have five years ago.

“If you want to grow, you absolutely have to have new products,” says Bélanger, 76, Premier Tech’s CEO and chairman (his son Jean is president).

Being different

Premier Tech makes a huge array of products — peat moss-based soil conditioning products used by gardeners, microbial inoculants for agriculture, waste-water treatment equipment, industrial packaging machinery and recycling systems.

It has also innovated in its core field. The world’s leading technology for peat moss extraction was once European. Today, Bélanger says proudly, it is Canadian and based largely on Premier Tech’s innovations.

Bélanger got the innovation bug in the 1960s when he realized the company had to do something different to stand out from the herd in a very conservative industry.

At the time, the business, founded in 1923, collected peat moss, screened it and sold it in bags to professional gardeners and farmers, who spread it on soil to improve its quality. Canada has one quarter of the world’s peat land.

The company’s first stab at innovation had mixed results. It partnered with researchers at Cornell University in Ithaca, New York, to develop a product called Pro-Mix, a soil additive for gardeners based on peat moss.

Pro-Mix would eventually become a big seller for Premier Tech, but it took 15 years of effort for the pioneering product to break into a very old-fashioned market that didn’t take kindly to anything new.

The experience taught Bélanger that innovation needs to be married with marketing from the start. This realization led him to found Premier Tech’s IR&D centre in 1983. Its mission: To bridge the gap between fundamental research in universities and government institutes, on one hand, and applied science needed in industry, on the other.

“We can’t spend 15 years marketing a product. It’s too slow,” Bélanger says.

Bélanger’s other realization was that it was vital to listen to the market. So he started to send em-ployees to conventions, expos and county fairs to harvest ideas for new products from his customers, whom he calls “the real heart of business.”

The IR&D team takes on 40 to 50 new product ideas each year, of which 10 to 20 typically become products that make it to the market. Such intense innovation is no less than the key to survival for Canadian industry as it competes against low-wage economies, Bélanger says.

“If we know how to innovate, we can protect ourselves.”

Bernard Bélanger’s innovation tips

Companies must create what Bélanger calls “a culture of efficient innovation.” Among his principles is an insistence that customer needs remain the focus throughout the innovation, research and development process, not just at the point of sale.

  • Companies must dedicate enough resources to innovation.
  • Motivate employees by offering competitive wages and by cultivating pride in products and the will to be industry leaders.
  • Work to ensure that business processes are efficient.
  • Build on knowledge and earlier innovations, a task that includes working closely with university researchers.
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