Innovation Diaries: Dealing with an Uncertain Future
In the midst of these crazy times, most industries still haven’t gotten their shit together. However, a few bright minds managed to understand the paradigm shift, act accordingly and reap the rewards. So, Bente Zerrahn and I talked to some of them! Join us on our learning journey over the next few weeks to see how completely unrelated industries deal very differently with the same challenges we all share – and let’s become better together!
Sepp Maier was born and raised on a family farm in Bavaria. Therefore, he’s always been devoted to food production and interested in how ecosystems can be impacted. He turned this passion into a career: After working in strategy and product management for Fendt, he’s now @AGCO’s global product manager for windrowers and square bales. Generally, he’s always been involved in building new businesses for the corporations he worked for. When we talked to him, he just returned from a trip to Silicon Valley and UC Berkeley which is part of his studies of “MBA in innovation and business creation” at the technical university of Munich.
AGCO is an international agricultural machinery manufacturer. Their mission is to combine agriculture with digital transformation to find smart solutions for tractors, sowing, and harvesting. In doing so, they want to help farmers and their fields thrive.
Growing up on a farm, you’re used to getting your hands dirty – what motivates you in your daily work at AGCO?
I’m enthusiastic about feeding the world – we’re not only dealing with hunger, but with obesity and diet-induced diseases at the same time. I want to develop a better understanding of the impact humans have on the global environment. I am convinced that we can overcome many of the major societal problems such as global warming, a growing population, and water shortages by changing the way our agricultural practices work. At AGCO, I can be at the forefront of technical development in order to make a real impact on these pressing topics.
Personally, I’m a bit of a nerd when it comes to soil. I’m certain the foundation for all agricultural approaches is achieving soil health; a good farmer doesn’t only cultivate crops, but their soil. Activities that sound great like mechanical weeding may work in some regions of a country but there are more factors to be considered in the ecosystem, like water erosion. Increase soil organic carbon with sustainable practices that fit to your region helps as well to increase yields. Some interesting startups have been coming up in this context, for example, Stenon, which we love to use on our family farm.
What’s your innovation process like?
Something I really want to stress is the fact that we don’t have a dedicated innovation department. We firmly believe it to be the responsibility of every single person and division to shape our future. Firstly, we have an agronomy team that focuses on what problems our customers are facing. Reviewing those issues, we ask ourselves how big the challenge and its impact on our customers is. Then, we use an innovation funnel in which different stakeholders can contribute ideas and new technologies. There, we look at currently available technologies and where new development is necessary – either by us or our suppliers – before handing it over to our product development.
Whenever something that’s not part of our standard development process pops up, we have a so-called SmartAg team, which takes the fast-track approach. This helps with tackling completely new topics that our existing organization structure might hinder in pursuing otherwise.
Finally, we have a PrecisionAg team that deals with our latest acquisitions, which really are the rising stars in technology. It’s important to integrate them into the ACGO family and to be able to generate value together without destroying their uniqueness and motivation.
How precisely can the other employees who are not part of these teams have an impact?
As I already mentioned, we don’t have an innovation department itself; we live innovation as part of our culture, to speak up and team up. So, if there’s an idea for solving a customer’s issue, we look internally where to focus our budget and resources before bringing the issue onto a roadmap or further elaborating on the problem and technological challenges. Everybody is part of that. We as product managers have the role to give the final go, oversee the roadmap and ensure implementation into the organization. Personally, I like this approach because it involves everybody and gives an organized structure to ideas so they can be turned into products and services. And overcoming this is currently a big challenge for many companies because oftentimes, their innovation departments get stuck in the ideation phase and don’t have the power to pull it through the organization toward a marketable product. Don’t stop ideas. Same with acquisitions. Try to learn from those companies and see where you can adopt something from their culture instead of forcing yours onto them.
How do you ensure a culture of innovation at AGCO’s scale?
You’re never done with implementing a culture of innovation, it’s not like a project you run once and then you’re done. Innovation is a constant process of asking questions like “What can be improved internally and externally?”; you constantly question the status quo. The resulting internal organizational and leadership changes, which often come with strategy changes, are major driving forces for innovation because it shows employees that they’re heard and taken seriously. They develop a sense of playing an active role in changing the culture and the company.
As someone closer to the innovation process, it’s essential to stay humble. Nothing kills innovation faster than assuming you have all the answers and others who are less involved can’t contribute. Additionally, it helps bring you back to your purpose should you ever lose sight of it and drive change.
What does AGCO do to contribute to overcoming global challenges?
There are so many challenges we need to tackle right now: Population growth, for example. The overall world population is expected to grow by over a third – 2.3 billion people– between 2009 and 2050. We need to have enough food for everyone around the world without resorting to destructive and exploitative farming practices; that’s a social responsibility we all need to take on.
We’re working on bringing enough food to the right places at an affordable price as well. That’s a real challenge. There, we also focus on how we to support the farmers and ensure their profitability. To do so, we help overcome those many taxing cost and input factors, e.g. rising energy prices by supplying them with our technology, thus increasing their yields, or reducing their inputs.
Additionally, we are looking into what opportunities lie outside our machinery business, especially within startups in that area. In that context, we ask ourselves how we can support them and how it would affect our business. For example, one of our new family members, a Canadian startup called JCA, helps us to solve the global challenge of labor availability. They are experts in autonomy frameworks and provide us with their operating system alongside other ventures and companies.
Making farming machinery more autonomous is one of the most significant issues in our industry now. Linked to that are two essential topics as well: data availability and predictive maintenance. If you want to support farmers, you need to provide them with transparent data on the machines and their needs.
Talking about M&A as an innovation strategy: How much data generation and software development do you yourselves do and where do you collaborate with startups?
Our focus is always on our customers, the farmers, and their challenges. So, decisions like this are solely based on whether we have the competencies internally and can deliver solutions as quickly if not quicker by ourselves than with external partnering. We do develop software ourselves, but not in situations where we see that startups or established experts already worked on it. In that case, collaboration gives us many advantages, especially to achieve the relevant speed necessary for staying ahead in our fast-paced market.
How do you ensure actual learning from the startups as opposed to “just” being a holding company?
Within AGCO, we have great opportunities to come together with events like e.g. our internal Christmas market; this is important in order to strengthen personal relationships and ensure flow of information. Additionally, it helps new family members – acquired companies and their teams – to connect more with our company and vice versa. Additionally, we have regular, dedicated exchanges between the companies; we meet their employees, visit their facilities, and bring a part of their spirit and our learnings back home.
Agriculture is one of the major areas to generate a significant impact on sustainability goals in order to slow global warming. Where does AGCO contribute?
One example is reducing fertilizer usage to ensure a positive environmental impact, especially on groundwater. Additionally, this results in lower costs for the farmer. We approach this by supplying the farmers with technology that finds the zones within their fields with the biggest potential to deliver yield. These, incidentally, need more fertilizer, and now can be specifically targeted.
In addition, we’re doing agronomy trials. For example, in Switzerland, we’re partnered with the Swiss Future Farm, a great testing ground for innovations in agriculture. These trials show us the impact of different practices and environmental conditions on the fields. By opening this knowledge, farmers have access to amounts of information like never before.
My big appeal is: Let’s all work on bringing transparency to sustainable agriculture. Ideological guidelines alone can only do so much; crucial however are the farmers who cultivate great produce and ensure their work is continued long-term, over generations. Sustainable in truly every way.
Tl;dr for the lazy
- Transparency within the company and its organization is important to ensure a work and idea flow and therefore fundamental for innovation.
- It’s necessary to involve every employee when it comes to decisions and changes in terms of cultural development and organizational issues.
- Integration of collaborating startups and companies and learning from their spirit is necessary to drive innovation in large corporations.
- Communication happens on a personal level and companies should enable that.
- Innovation should be part of the company’s culture, not an isolated department.