Wanna be a _____ co? Prove it.

Prime Future 163: the newsletter for innovators in livestock, meat, and dairy

Rhishi Pethe: I noticed Bayer Crop Science executive team does not have anyone with pure digital or technology experience.

Head of Digital Farming Solutions for Bayer Crop Science: As far as pure technology experience goes, the beauty is that our current leadership team at Climate brings that expertise.

This exchange in Software is Feeding the World was part of a broader discussion on the future of tech within Bayer.

I have mega respect for Bayer - you don’t lead in as many categories as they do, for as long as they have, without getting a lot of big rocks right.

But I found the Bayer leader’s response unsatisfying.

Monsanto acquired Climate Corp for a reported $930M in 2012, Bayer acquired Monsanto for $~63B in 2018, and since then Bayer has continued investing in agtech plays, both via minority investments and acquisitions.

It's clear that technology is a stated central piece of the organization's go-to-market strategy moving forward.

But not a single person on the leadership team has direct tech experience?

I don’t highlight this to pick on Bayer, rather, this is a good example of a common disconnect between what a company states about its strategy and how they resource the leadership team responsible for the execution of the strategy.

It’s especially common across all segments of agribusiness right now, as most companies are attempting to fashion themselves into some sort of a technology company, without rethinking leadership team composition and what new skills/POV/insights/capabilities might need to be heard in the board room.

IMO the agriculture company that has most seamlessly incorporated technology, and set itself up strategically to continue doing so, is John Deere.

Perhaps one reason Deere has been so effective is that its leadership team’s capabilities seem to match its strategic bets.

A quick glance at the corporate website yields the following info on leadership:

• Tech is at the center of the CEO’s role AND his background: "As Chairman and CEO, he is focused on the execution of the company’s Smart Industrial strategy, which accelerates the integration of advanced technology with Deere's legacy of manufacturing excellence. The strategy’s areas of focus include aligning operations by production systems, or the way Deere's customers work, delivering breakthrough technologies through an intuitive technology stack, and enriching a customer ownership experience over a product’s entire lifecycle. Previously, May was President, Worldwide Agriculture & Turf Division, with responsibility for the Americas and Australia, as well as for the global harvesting, turf and utility, crop care, and intelligent solutions businesses. He also served as Chief Information Officer and as President, Agricultural Solutions. In these roles, he spearheaded initiatives to develop the Deere family of "smart" machines, systems, and solutions to unlock customer economic value through enhanced precision, automation, speed, and efficiency."

• The CTO is also legacy John Deere, a mechanical engineer by training but according to Deere's website his "doctorate focused on the application of artificial neural networks in heavy-equipment applications." Okaaay, that’s pretty relevant.

• They did bring in an outsider to lead customer support/recurring revenue but he was involved in developing smart industrial strategy.

The fact that the words 'tech stack' are mentioned in the bio of multiple members of the leadership team is a mega signal that makes it much more believable when Deere talks about a tech-integrated strategy.

When a company is pursuing a mega transformational strategy, there are two obvious paths:

(1) Promote from within.

When a company is transforming itself, the challenge with promoting from within is that most leaders within aren’t equipped for a transformation. They simply don’t know the new thing - whether it’s technology, a new market, etc.

The upside is that they know the nuances of the company and its culture. They’ve been in the trenches with people and have built trust, presumably they know how to get things done.

(2) Bring in outside talent.

The alternative is to bring in someone with completely new experiences. Tyson Foods did this a few years ago when they brought in a new CEO from Alphabet, which has to be about as opposite of a POV on the world as you could find from a typical meathead.

(Here’s what I wrote at the time which shockingly aged ok 🙃)

The upside is an outsider brings a new POV, new capabilities, new networks, fresh eyes, etc.

The downside is that they are starting at ground zero with the people inside the company, and (depending on how far outside they are from) perhaps starting at ground zero with the industry and its realities.

My hypothesis is that 15-20 years ago, Deere basically said, “Hey what if there’s a hybrid path to get the best of the 2 obvious options? It would take a long time to execute but would be super powerful if we could pull it off…”

Deere rejected the downsides of both options to play the long game, cultivating new capabilities within the company over time.

No apparent tradeoff was made in new business (tech) versus core business (tractors), or in new capabilities versus existing culture. Time was the only cost, and it has been paid so now they’re reaping the benefits of the strategy.

So leadership understands the core business and technology.

So technology isn’t some other thing, some moonshot, some ‘let’s dabble’ kinda thing.

Technology IS part OF the core business.

In an industry where incumbents are clamoring to reposition themselves as tech and/or tech-enabled companies, it often seems like Deere is the only one that is…perhaps this is why.

For the genre of companies still beginning the journey into tech, the Deere path may or may not work.

Maybe it is the path that Bayer and others intend to take, but at this point do they have time to cultivate talent within the company without creating execution risk?

Another relevant cliche is 'what got us here won't get us there'. And yet it is totally common to resource a company trying to get to some daunting & unknown There with only the people who got us Here.

Whether it's an analog company betting on digital and only putting analog leadership in place, or a meat processor betting on branded programs and expecting commodity-minded leaders to pull it off, it’s the same idea.

By definition, if you set out on a mega transformation then there will be implications on how the business is run, how the organization thinks & operates, business model, customer interaction, go to market, etc.

…and if your leadership team's capabilities don't match your strategy, it’s virtually impossible to get There.

It’s so obvious though; why does it even need to be said?

Because it gets missed, overlooked, downplayed, and/or ignored. Often.

Oh, and I’ve highlighted this point at an executive level within the biggest agribusinesses, but it also holds true for leaders much deeper within organizations.

You say you wanna be an (insert new capability) company?

Prove it. Build a team like you mean it.

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