The key to development: If what you really like is salty caramel, don't get into the business of making pizza-flavored popcorn.
Innovation. Engineering. Leadership. Institute. Four powerful words, comprising the title of an energizing three-day class I attended in January where I learned fundamental tools and revolutionary ideas for, well, for any enterprise worth doing well.
Doug Hall led the class. He’s an enterprising native of Portland, Maine, alumni of University of Maine, where he received a degree in Chemical Engineering, and he’s founder and powerhouse behind Eureka! Ranch in Ohio. Doug took a sabbatical from his company to teach at U-Maine during the fall semester. For three days, however, he taught a class of 100 business leaders, non-profit staffers, and three Maine legislators. I was one of the legislators.
The purpose of the event was “to lead and teach the creation, communication, and commercialization of meaningfully unique ideas.” And that gets us back to the four words:
Innovation: That is, meaningful uniqueness. If it isn’t unique, it’s a commodity. If it is meaningful, your customers are willing to pay more for it.
Engineering: A structured approach to thinking and planning.
Leadership: Inspiring others towards effective outcomes.
Institute: A society created for the purpose of learning.
Recently, my husband I made the decision to sell our dairy herd. We came to accept the fact that we could not recover from a long period of record low prices. (I wrote about this decision in the Yonder here.)
Now the question facing us is how do we continue to farm? Without the routine, time constraints, and income from daily milking, will we be able to expand our natural meats and poultry production and marketing efforts in a strategic way that ensures farm profitability? That was the question I brought to Doug Hall, the same question many people in rural America are trying to find the answer to.
Hall told us the key to economic survival is innovation. We had to define and then communicate our “meaningful uniqueness.” And then we had to do the regular business stuff: create a management system to track costs and income, plan for investments, and continually watch the market for trends that impact our product lines and our customers.
Snafu Acres, our farm, has already been innovative. In 1990 we responded to market demand for local, humanely raised, natural and organic meats and poultry. In 2008 we created a home delivery system that has been more successful for us than any of our farmers’ markets.
I took away three unique ideas from the conference that may actually help our farm. They are about failing, partnering and passion.
• The most provocative thing Doug taught was the “Fail Fast, Fail Cheap” strategy. Innovation means risk, and risk arouses fear. Fear is a normal response to chaos, and will be a barrier to necessary change. To move forward with a new concept, break it into smaller components, and experiment, so risks are decreased to a manageable scale.
Want to find out if there is demand for your new idea? Rather than contract with a marketing firm that will cost you time and money you can’t risk during the early stage of a venture, talk to your potential customers one-on-one and get a preliminary sense of the market. Not sure what regulations cover your concept? Talk to the code enforcement officer, or the grocery store department manager, or someone already doing something similar. Talk to people already in the supply chain: customers, suppliers, and buyers. You won’t get all the answers, but you’ll learn key information quickly, and you can proceed from there. Risk is reduced when taken in small pieces.
• Partner/build alliances, even with competition. We farmers are an independent lot. But the same trait that empowers us to fix the tractor out in the middle of the field with a rainstorm on the horizon and hay still to get off the ground, works against us when it comes to building alliances.
I learned during Innovation Engineering discussions that even Fortune 500 companies are learning that it is smarter, more sustainable, to partner with those around you rather than build your own infrastructure. As much as we want to “control” all aspects of our farm, as any business owner does, we need to look at partnerships that will reduce our costs, improve the quality of our products, and therefore better serve ourselves and our customers than if we had done them ourselves.
We do this already with an agricultural cooperative to processing our poultry, and perhaps we need to look to other potential partners for value-added products like chicken pot pies and country style soups. In our own Snafu Farm Fail Fast, Fail Cheap method, we have talked with our customers and other farmers and see an incredible demand for these delicious, nutritious ready-for-the-oven meals.
We can better meet this market demand, and maintain our own sanity and add to the bottom line, if we can find a partner with a kitchen and a process that already meets government standards. I’d rather be a profitable partner than a struggling independent business owner.
• Do what you love. If you’re committed to doing something right, it’s going to take an incredible amount of your time and energy. If you are going to give up that much of yourself, make sure it is something you care passionately about. Otherwise, why bother?
In one exercise, we were charged with creating a new flavor of popcorn and developing a marketing plan for it. We had to show a certain profit margin on each package. Our group, frankly, succumbed to the energy of one team member who was adamant that pizza-flavored popcorn would be the most successful, since most popcorn is eaten by teenagers, and they also like pizza. None of us particularly liked the pizza-flavored popcorn, but we developed a marketing plan and brought it in on budget for the exercise.
We chose not to argue with our one adamant member, even though we all really liked a salty caramel version created by another team member. During our presentation to the other groups, we raised this issue. Doug said we had made the wrong decision. By going with something we thought would be more sellable, but which we ourselves were not passionate about, we were in a position of putting all our efforts into a product we didn’t care about.
Doug pointed out that when he has tough work to do, he will always choose the guy who is excited about the work over perhaps a person with a better resume, because he knows the passion will drive someone to work harder and more likely, to find a better solution.
As we work on re-inventing our farm without the core business of organic dairy, I’ll be using these three business strategies to improve profitability while remembering to remain true to the reason we are farmers to begin with: We enjoy working with animals, we find great satisfaction in selling our meats and poultry directly to our neighbors, and we want to be able to pass this farm, not just the land and the buildings, but a successful business, to our daughter.