To say these are uncertain times in the feed and grain business is an understatement at best. Global challenges such as the wars in Ukraine and Iran, issues closer to home like trade and immigration policy, sorting out where and how AI will impact the industry and making sense of what it all means for farmer-customers add up to plenty of questions with no easy answers, or none at all right now.
That said, feed and grain managers still must identify a path forward despite the uncertainty. But a missed call or bad read on some future state may lead to lousy investments, low returns and a loss of momentum. At the same time, sitting and waiting for the future to become clear is rarely the answer and likely means missed opportunities and getting left behind while competitors who were more proactive.
We have written before on managing under highly uncertain conditions: improving your firm's ability to forecast the future, building resilience to the inevitable ups and downs of the grain and feed markets, and baking adaptability into your operating model and culture. Being nimble helps your business navigate a highly uncertain environment.
Another tool you can use to manage in highly uncertain times is the idea of pilot programs and projects: small-scale experiments that help you learn, reduce uncertainty and assess if an idea has merit. Test marketing a new promotional campaign, exploring a new geography, trialing a new service and evaluating a new process in your manufacturing facility would all be examples of pilots. In this Managers Notebook column, we'll look at how pilots can help you find the most profitable path in a highly uncertain business environment.
Why pilots?
As a manager, when the future is cloudy, you need a way to learn, to collect more information, to reduce uncertainty before making major commitments. Since you don't know exactly how things are going to play out, you need to place some small bets. Then, as things clarify and you learn more, you can run with the bet that makes the most sense.
A pilot is basically an experiment, a small-scale commitment to a course of action that lets you evaluate an idea before making a major resource investment. Once the pilot wraps up, you can build on what you learned and launch something new, or file it away as an idea whose time was not right. Either way, you learned something in the process.
Pilots also buy you time until you have more insight into where things are going, and let you de-risk an idea: learning what works, what doesn't, and how it might play out if conditions were different.
Finally, pilots can help build buy-in for a new idea. Those involved in a successful pilot experienced the program firsthand, helped sharpen it before launch, and can speak to its value more broadly. That kind of outside support can be a huge boost when launching a new initiative.
Having a portfolio of pilot projects at any point in time gives you flexibility, letting you ramp up or shut down projects as market conditions change. Let's look at some of the key elements of a successful pilot.
Defining the pilot
You need to be able to evaluate the pilot when you wrap up, and that means the pilot needs some definition and structure up front. Don't start with an activity, such as, "let's try this new service for three months and evaluate the results." Start with the decision you need to make and what you need to learn to reduce the uncertainty in that decision.
Are you looking for additional revenue through a new service? Do you want to raise awareness with a new social media campaign? Are you looking for cost reductions or quality improvements with a new operating procedure? What information do you need to collect to evaluate these kinds of decisions? What do you need to know or learn that you don't know now?
By focusing on the decision and what you don't know, you can structure the pilot to collect the information you need. Maybe that's customer response, maybe it's cost and staffing, maybe it's operational fit. The pilot should be big enough to collect what you need, but as small as possible to keep the cost of the trial down.
Another key decision is how long you will run the pilot. Pilots by definition are not permanent changes; they are experiments conducted to learn something about an idea, and they need enough time to prove themselves one way or the other. A social media pilot may run its course in a month. A new service may take a full production cycle. Regardless, a pilot needs an endpoint – a date where you shut it down and take stock of what you learned.
A final point here is positioning the pilot as a pilot. Clearly labeling it a pilot puts everyone inside and outside the business on notice that this is a trial, something temporary, and that it may or may not continue in the future. That positioning gives you some cover if it doesn't work out and you decide not to pursue the idea further. Some customers or employees who liked the idea won't like the fact you pulled the plug, but the fact they knew it was a pilot helps soften the disappointment.
One "watch out" here is parties affected by the pilot actively, or passively, working to undermine it, doing all they can to see it fail or simply refusing to support it. The reverse also holds: enthusiastic parties may jump on the bandwagon and minimize the downsides. Think about who might be most impacted by the pilot and filter their feedback accordingly.
Assess results
Many pilot programs fall apart here: there is no clear-eyed assessment. You roll through the "end by" date and just keep piloting. Or you trust your gut, and it "felt" like it was all working, so let's go big. Or you get a little pushback from employees who found that new process wasn't the old process, and you scrap the idea.
You can do better than that. If you structured your pilot properly, assessment is relatively straightforward. You had a decision to make, information to collect, a time frame and a set of target results. Did you hit the mark or not?
Being able to answer that question means you tracked the progress of your pilot. You know what was invested, what it cost. You have some measure of incremental revenue, social media engagement, customer contacts, quality issues, cost savings. And yes, you probably have some qualitative feedback on how the pilot went, what folks liked about it, and what they didn't. All of that puts you in a good place to carefully evaluate what you learned and make the right decision about the pilot.
To scale or not to scale?
When the pilot is over, what's next? Maybe you learned that things just didn't work, and it is an easy "we gave it a shot, but now is not the time" idea. Maybe the pilot did not hit the marks you set, but you learned enough to try a second pilot, incorporating what you learned to give the idea another chance. Or maybe the pilot exceeded all of your success metrics and, in your judgment, is ready for prime time. One point here: pilots don't really fail. Spending $25,000 on a pilot that tells you a $1 million idea is a bad idea is not failure.
Again, careful thought is the order of the day before moving ahead. Dig into why you have the results you have. Maybe the pilot failed because it was a bad idea, or because the implementation was poor. Maybe it succeeded because it's genuinely a great idea, or because of luck, enthusiastic supporters or favorable market conditions. This review is an important part of the process, and how you learn, no matter the outcome.
All that said, your pilot may clearly be ready to roll out across the organization. As you plan the rollout, think through what might differ between the pilot's conditions and the broader stage, and use any feedback you picked up along the way. Maybe complaints from your warehouse crew mean more training is in order. Maybe you need to modify the pilot slightly to better serve customers in a specific region of your market. The point is you learned a lot from the pilot, and you want to use all of it to give the rollout the highest chance of success.
Upshot
A highly uncertain business environment brings a lot of admonitions for feed and grain managers to be creative, innovative, flexible, adaptable. That's all well and good, but how? Building a culture where you encourage new ideas and move some of them into pilot programs is one clear path to innovation. The discipline a well-structured pilot brings to evaluating new ideas can help you separate the wheat from the chaff and stay proactive in navigating the tremendous uncertainty we see in the feed and grain markets.
