Abstract
This paper presents detailed insights into the nature of innovation dynamics of an SME operating in the food industry. Furthermore, the paper highlights how Action Research has changed and enhanced SME’s capability to innovate. Within the exploratory action research based case study described in this article, the researchers interacted closely with one company with regards to a newly launched innovation process over a time period of more than 18 months. The analysis contributes to the fields of action research and innovation research in three respects: First, it exemplifies how systemic action research as a method can be applied on the organisational level in the private sector. Second, it demonstrates how useful action research can be for fostering the innovativeness and creativity of a company. Lastly, the analysis illustrates the extensive time horizon of an action research project.