Today, agriculture and technology have combined to create a completely new business sector, says Jonah Kolb, vice president, Moore & Warner Ag Group, an Illinois-based ag consulting and farm management. This new enterprise is fueled by the energy of the investors and technology gurus who continually push for innovation and the creation of new markets; and progressive farmer CEOs who desire new tools to help them feed a growing global population and get a return on the technological investments they have made.
In Part II of “Navigating the New Tech Frontier,” Kolb talks about the different goals of the key players in ag tech and what future farmers will need to do to remain in the technology mix.
Investors and farmers: A great divide?
Broadly speaking, Kolb believes that investors tend to think in terms of potential, while farmers tend to think in terms of results. Though both groups have a stake in the success of ag technology, they see it as serving them differently.
“The best farmer CEOs realize that the financial and time investment they’re making in new technology is going to take a while to pay off,” says Kolb. “Still, they are thinking, ‘Is this a wise use of limited cash this season?’ and ‘Is this technology doing what it promised?’” Conversely, investors have a higher appetite for risk and are possibly looking at industry-changing potential and the realization of billions of dollars if they succeed, says Kolb.
He offers another example. It’s common knowledge within the venture capital world, that for every 10 investments, the expectation is maybe one is a slam dunk, two or three or four are reasonably successful, and investors break even or lose money on the rest. “That’s a fundamentally different view than farmers who are evaluating practices or equipment or software on their operations. They don’t approach operational or capital expenditures with the expectation that half of what they invest in and pay for is going to fail,” says Kolb. “It’s a profoundly different way of thinking about risk and what success is.”
Is the strategic plan dead?
In the past, a strategic plan helped a company visualize and achieve its goals and objectives by creating a solid strategy and executing effective tactics. Today, that is probably not enough, says Kolb.
“Static planning and getting from Point A to Point B in a straight line with predetermined milestones is not as relevant as it once was,” he says. “It’s more important to be a nimble and learning farming operation. That means approaching human capital and personnel and management in a more thoughtful way. It’s thinking about how to evaluate opportunities on an ongoing basis. It’s having a mindset of ‘We want to have the capability to evaluate a new technology in four weeks to decide what three things we’re going to trial each year."
“Ongoing learning and adaptation is more important than hard-and-fast goals and planning that might have been better suited to 20th century agriculture.”
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