Last week, we were invited by John Deere to attend an event for both financial analysts and the media, focused strictly on the company’s technology strategy. It was said at least a couple of times by speakers that this was the first time the company ever did a deal like this where the iron was not in the spotlight, making it extra intriguing for me going in.
As an aside, sitting on a bus to the demonstration farm I got a chance to be a fly on the wall as analysts “compared notes” about the event. Their reliance on preconceived notions and wild generalities to come to some remarkable conclusions probably should not have surprised me, but I was still a bit taken aback. One analyst exclaimed as she exited the bus, “Wow! I’ve never been on a farm before!” Indeed.
Anyway, we reported on some of the technologies that were released last week, including some important puzzle pieces in its master plan to create a platform for streamlining data movement and management (under the FarmSight brand) and placing Deere dealers at the hub. So now it’s time to reflect on the totality of the event and what it appears to mean for Deere, and for agriculture going forward. Here’s my take.
Recognizing The Revolution
David Everitt, the outgoing president of Deere’s Agriculture and Turf division, spoke eloquently about the time and place that agriculture finds itself in, relating it back to turning points in the company’s past.
The one familiar to most ag folks is the story of Deere’s purchase of the Waterloo Gas Engine Company in 1918, which thrust Deere into the tractor business that’s still at its core today. Everitt paraphrased a letter from the head of advertising at that time. The letter explained while Deere understood that “the horse is going to continue to be the primary mode of production work on farms, we did it to satisfy a few of our customers.” Said Everitt, ‘if we had followed conventional wisdom we would not be where we are today.”
He compared that moment of inflection to the moment we’re experiencing with technology today. Citing projections of an historic increase in world population between now and 2050, and the resulting need to raise more food on the same amount of land and water and with more stringent environmental standards, Everitt asserted that it’s all about productivity.
He also acknowledged that we’ve seen the upper limits on practical equipment size, and that it will be interesting to see what the future of combine and tractor development will look like if technology makes smaller equipment equal to, if not more efficient than their gigantic cousins.
"John Deere increased productivity using a bigger, faster, better strategy, and it has been a great model for us,” said Everitt. But there’s a limit to how big you can make a combine and actually get it from field to field.
With a 120 foot planter, he continued, “you can’t even see the ends of it from the tractor. What happens when you have technology that allows you to go through the field twice as fast with a 20-foot planter?”
“The capability to change the dynamics of productivity is where we are at today,” Everitt said of emerging technology in agriculture. “We will be successful around the world because of the technology we are talking about here.”
One of the presentations was given by John Deere engineer Aaron Senneff, who described the company’s new approach to cultivating innovation called “agile development.”
Most common among software giants like Facebook and Google as well as smaller startup companies, agile development seeks to create innovation by regularly reevaluating the customer and the marketplace and embracing market changes and fluctuations that are usually ignored or pushed aside under traditional equipment engineering approaches.
"Every two months, we meet with the management organization to about what is going on marketplace, what is going on in terms of technology and what the organization’s priorities are as a result."
Small, highly empowered design teams demonstrate innovations from the previous two months, and the process starts all over again. Its efforts have created a buzz in the technology community, and even earned it a feature story in Computer World magazine.
There are other details about the agile technology approach I won’t highlight here, but it’s a bold and from my view an altogether necessary move for Deere to make.
It’s Not Happening Next Week
If the final solution for data and technology compatibility for American farmers is the ultimate goal, there is still clearly a long way to go. Like other technology companies Deere has an overall vision that makes a lot of sense, with dots that can be connected. But solutions are coming out piecemeal, with improvements here and there but no ironclad connectivity between those solutions. The issue of data standards and connectivity is still very wide open, and until this aspect of agriculture technology gets settled, fully functional connectivity solutions are not on the immediate horizon. But there's a lot of great thinking that's getting vetted out, which is great to see.
Green Will Take Care of Green First
I thought about this a lot over the weekend and discussed it with some of my trusted friends. You know, I love talking and hanging out with the early precision adopters … they have passion and a willingness to try anything. They are also less likely to be patient or loyal when a manufacturer is not providing precisely what they are looking for.
Conversely, there are lot of folks who are fairly loyal to a brand who might like to use a technology but won’t unless it provides a simple and seamless way to use it ... and which features tech support when it is needed. A third group might be growing farms that want all the benefits of technology when it is proven to work well, and would buy in if the right system were available.
Last week Deere seemed to be recommitting to its loyalists and big grower prospects by developing and advocating a Green on Green systems approach with Deere dealers at the fulcrum. Whenever anyone was asked about mixed fleets, there was a lot of feet shuffling and looking down. The right things were said about offering ways to tie mixed fleet machines (and certainly, solutions are available), but the message to me was, ‘Well, sure you can, but why would you want to do that when we can offer you all this under a Green umbrella?”
With data standards coming along nicely, facilitated by AgGateway, there could be a growing benefit to building a branded technology system that works effectively. Everitt said that ag technology is at an inflection point every bit as revolutionary as the tractor was almost 100 years ago, and they’ve put the systems in place to expedite innovation. The next three to five years should reveal the winners and losers in the battle to dominate the technology space in ag.