Leading a successful feed and grain business today is no small task. With commodity prices at or near historic highs, a world economy perched on the edge of another recession, and a political process so divided and contentious that few real solutions have been forthcoming, “planning for the future” can sound a bit like a pipe dream. Despite these challenges, most would argue that these are heady times for agriculture, especially the crop-related industries. Livestock looks a bit different, but even the livestock industry can get excited about the prospects of global demand for animal protein. Long-term issues such as feeding and enhancing the diets of 9 billion people, addressing energy security issues, providing substitutes for petroleum-based industrial products, and doing all this on existing acreage and with even more modest environmental impacts and resource utilization suggests a bright future for the agricultural industries.
But, no matter how positive the long-term story, firms must survive (and thrive) in the short run. Balancing this need to adapt for the long term, with the need to execute in the short run is not an easy thing to do. A McKinsey Quarterly article by Eric Beinhocker quotes work done at the University of Memphis and the University of Texas-Austin that looked at 6,772 companies over 23 years (E. Beinhocker, “The Adaptable Corporation,” McKinsey Quarterly 2006). Only 5% were able to deliver ‘superior performance’ for 10 years or more. Most firms studied enjoyed short bursts of strong performance, but lost their way once the business environment shifted.
Why is it so hard to balance the need to execute today with the need to innovate for tomorrow? Part of the story is that it takes different skills and capabilities to do these two things well. Think about a successful innovator and you think of flexibility, research, creativity, experiments, failures, risks, and so on. Think about a firm known for execution and you think of process, focus, efficiency, standardization, limited choice, scale, etc. Just a quick review of these skills and capabilities starts to explain the challenge.
Beinhocker takes a deeper look. He would also suggest that another reason innovation for the future is hard is what he calls “the double-edged nature of experience.” As we grow as managers, we accumulate more and more experience with different situations. We then draw on these collected experiences for guidance in new situations. This works well as long as the new situation is somewhat similar to the current situation. But, put us in a “brave new world” where everything/most things are different, and our experience can become a burden and limit our creativity as we struggle to apply our experience base to a situation where it does not fit. An example might be determining how to use social media to connect with our customers (see our recent Manager’s Notebook column — “How to Work with the Facebook Generation,” June/July 2011). The set of technologies, the generational issues with utilization, and the interface with more traditional marketing, among others, make navigating here difficult for the veteran marketer.
Another issue here is something that management scholars call “path dependence.” The idea is pretty simple: Who we are affects who we can be. If we operate a string of country elevators scattered over the western part of our state, those physical assets say a lot about our future strategy. It is certainly true that given enough time and money, anything can be changed. However, for most organizations, this idea of path dependence does put some bounds around what we can and cannot do as we adapt to an evolving marketplace.
While obviously challenging to do well, this idea of doing things right today while laying the foundation for tomorrow is a fundamental goal of feed and grain firms that want to be successful today and tomorrow. And, balancing these somewhat competing ideas does come down to human talent. What can you do as a leader in your organization to ensure your team is not only successful today, but laying the foundation for a successful future? Let’s take a look at some ways you can help your team be great today and tomorrow.