It has got to be one of the biggest corporate turnarounds in agricultural history, even if it didn’t actually change any red ink into black. Indeed, as turnarounds go, this one had only a passing connection to anything as simple as current accounts and balance sheets.
Instead, the challenge was even tougher — to completely re-invent the way farmers think about Monsanto, the company with arguably the worst damned-if-you-do, damend-if-you-don’t farm image of any ag company in over a generation,. In part, it was that tough because Monsanto is just so big and affects so many farmers around the world, and partly because the animosity toward it was just that deep.
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Indeed, for farmers who have been trying for over a decade to woo Canadian consumers and to get them to update their appreciation of agriculture, today’s Monsanto may be a case study in exactly how you orchestrate a change of heart on that kind of massive scale.
From the Monsanto perspective, it rides on three key elements:
- Focus on hiring the right people and giving them the resources so they can be very, very good at what they do.
- Know everything about your customers.
- Earn the respect of others by respecting yourself as a business.
Unless you’ve been living under a rock for the past 15 years, you’re already familiar with the broad brush strokes of Monsanto’s corporate history. The St. Louis, Missouri-based multinational all but invented the agriculture biotech industry in the mid-1990s with the introduction of its Roundup Ready suite of crops including canola, corn and soybeans.
Monsanto was first out of the blocks with the commercial introduction of controversial new GMO technology, in the process becoming a lightning rod for Greenpeace and anti-GMO forces around the world.
On the farm front, at the same time, Monsanto launched a new way of doing business. Monsanto wouldn’t be a seed company like any other, developing varieties and hybrids and then jealously protecting those varieties in order to gain market share. Instead, Monsanto wanted to do business with everyone, even its toughest competitors, because if its business proposition was going to work, Roundup Ready’s numbers not only had to be big, they had to be more mind-blowingly enormous than anyone had ever even imagined before.
They had to be, because the cost of developing biotechnology were on exactly that scale.
Indeed, the company had gone all in, shedding its portfolio of products like Astroturf, Nutrasweet, pharmaceuticals such as the arthritis medication Celebrex, Tide laundry detergent and other consumer goods. They’d then taken that money — roughly a billion 1980s dollars — and rolled the dice on the then embryonic agriculture biotechnology sector.
Making that big a gamble created a new reality for the agriculture industry. It meant that older, informal ways of doing business on a handshake had to disappear, replaced by a contractual agreement between the company and individual farmers. It also meant the company had to enforce its ownership of its intellectual property through its new technology-use agreements, complete with often unpopular measures like field inspections and suing farmers who had brown-bagged seed containing the Roundup Ready gene.
Farmers were already getting their first lesson in the Monsanto brand, i.e., this is not a company that does things by halves. Nor is it a company that second guesses itself, or apologizes.
That created a PR problem for Monsanto in farm country, but it also contained the seeds of its eventual redemption, because at the same time farmers were upset by Monsanto’s tactics, they were leaping into the Monsanto fold, buying its technology as fast as they could get it.
That was the opening that Monsanto needed, says one Saskatchewan-based academic who has followed the company’s story with great interest in recent years.
Peter Phillips is an agricultural economist at the Johnson Shoyama Graduate School of Public Policy at the University of Saskatchewan, and his CV includes work in intellectual property management, innovation systems, the impact of new technologies and the economic impact of agricultural biotechnology. He says Monsanto got both the benefits and drawbacks of what’s known as “first mover” status.
“Monsanto has proven themselves a wonderful marketer in terms of getting the product into the hands of farmers and getting them to adopt the technology,” Phillips said in a telephone interview with Country Guide. “Beyond the farm gate, where there’s a much longer supply chain that needed to be satisfied and managed, they’ve struggled more.”
For example, he says the company wasn’t as well-prepared when consumer resistance began to build in the U.K. and continental Europe, and didn’t anticipate that the backlash would be seen by some competitors as an opportunity to differentiate their market offering and build a new strategic position for their own companies.
“It was really one small, almost marginal, High Street retailer that began to label itself as GM-free, and then others followed,” Phillips says.
It put Monsanto on the defensive in unfamiliar territory, making it defend their products in the consumer marketplace while facing a brewing backlash against what were seen as heavy handed tactics back on the farm.
Faced with these challenges, Monsanto didn’t muster an especially good response, according to one surprising source — the head of Monsanto Canada.
Mike McGuire is a transplanted Ontarian who’s held senior positions in the company’s global operations, including responsibility for corn and soybeans, before taking on the challenge of sitting in the big chair at the Canadian operation’s Winnipeg headquarters. During a meeting with Country Guide he conceded that Monsanto may have made some strategic errors early on when dealing with the backlash.
“If we look at how we’ve matured and this industry has matured, Monsanto is a fabulous research and scientific company and I think in the early days as we started to tell our story, we literally said, ‘This is great science, why don’t you understand?’ and we just didn’t get it,” McGuire said. “We didn’t pause and say, ‘If you have concerns, let’s listen to them.’”
“We’ve learned that there’s more to it than science. There’s emotion involved, there’s business processes — it’s a whole lot larger than just the science.”
To illustrate his point, McGuire told about a recent telephone conversation with a concerned caller from New Hampshire who’d gotten his number somewhere and called him up out of the blue. She’d been reading a “green magazine” where Monsanto was called out for mistreatment of organic farmers and she had a list of questions she wanted to find answers for.
The old Monsanto might have quickly circled the wagons, and mounted that strictly science defence. Instead, McGuire spent some time talking to her and suggesting some alternative information sources that might give her a more complete picture. It’s a critical thing in a world where poorly sourced information can make the rounds in a blink of an electron, and Monsanto is sometimes still seen as the bully on the block.
It turns out, a similar strategy is equally effective with farmers.
“The most powerful counter… is actually talking to someone,” McGuire says.
Peter Phillips says he has certainly noticed the company’s tone change over the years. He says he spends a lot of time at meetings that discuss biotechnology issues, and he’s noticed a very clear trend.
“If there’s one of the major companies that you can always count on being in the room these days, it’s Monsanto,” Phillips says. “And it’s not just the official spokesperson there telling you how it’s going to be, either — they’re management and technical people, who are there to listen and talk to you. They’re a very interesting company in that way, and I’d say that they’re easily the most transparent of the major life-science companies.”
Farm challenges
The challenge of winning over the general public is definitely playing the long game. A shorter, but even more critical game, was winning back the respect and trust of the farm community in light of the company’s public relations challenges. It was even more critical, McGuire points out, because without any consumer products to rely on for income like some of the other major life science companies, Monsanto has just one pool of potential customers — the farmers who plant the seeds bearing Monsanto’s genes.
A dozen years ago, Monsanto’s name might not have quite been mud out on the farm, but it wasn’t far from it.
The company was again bearing the costs of being first out of the gate with the new technology — and the accompanying modifications to the way farmers were used to doing business. Technical-use agreements, field inspections, and threats of lawsuits simply didn’t sit well with farmers.
Today that backlash has largely receded, McGuire says, for a few very important reasons. One of the most important is the passage of time and evolution of the business of agriculture.
“The whole business of farming has evolved,” he says. “We kind of got in at the front end when I think there was a transition phase, where there was this move towards agriculture being looked at more as a business than a lifestyle, and I think in the time since we’ve had the first agreements and today, it’s really moved quickly, with consolidation, with complexity, and growers realize these are fundamental things they need to do to be good businesspeople.
“The majority of growers understand why we do it,” McGuire says. “We learned as the process evolved and growers learned at the same time.”
One of the most important ways Monsanto has paid more attention to its relationships with farmers is through a Grower Advisory Panel that taps key commodity groups, who then appoint members. They meet twice a year with the company to discuss upcoming developments, grower needs and any other issues that may arise. It’s a model that was first employed in the U.S. and that the Canadian operation began to mirror around 2006, says Trish Jordan, Monsanto Canada’s director of public affairs.
It’s interesting to note that, while Monsanto is the only major biotechnology company making the effort to have such a panel, they’ve also been roundly criticized for their trouble — in some quarters the move is seen as window dressing, or a cynical attempt to co-opt the voice of farmers for their own ends.
Others darkly suggest that the farmers involved are somehow now beholden to the company, and members of the panel have been criticized for being overly-cozy with the company. Despite this Jordan says the panel is still the right direction for the company to go.
“There’s always going to be some party that’s going to say we’re just doing it to improve our image or influence these guys,” Jordan says. “It’s important that we focus on our goal — to get closer to farmers and our farm customers, because they’re our only customers.”
One farmer who’s been a long-term member of the Grower Advisory Panel roundly rejects this criticism of the company’s motives. Kevin Bender, who farms near Bentley, Alta. and is president of the Western Canadian Wheat Growers’ Association, says he’s always found the company ready to talk about anything, and that the meetings almost always involve key company decision makers and technical staff.
“I’ve found them to be very open and transparent,” Bender says. “They also don’t just want to hear the good things. They’re always telling us ‘Don’t be polite at the risk of not being completely honest.’”
Bender describes the twice-annual gatherings as forward-looking and surprisingly open, where farmers can get a preview of technical developments. He also says they’re frequently focused on how to meet the market needs of farmers and keep them competitive.
“I’m very impressed by the whole process,” Bender says. “I got to a lot of meetings, and this is one that I look forward to the most. They’re productive, useful, and I feel they listen to us. It has definitely increased my respect for Monsanto as a company.”
Stittsville, Ont. farmer Don Kenny, who’s past chair of the Grain Farmers of Ontario and a current member of Monsanto’s advisory panel, says any criticism of Monsanto’s motives are baseless. He describes a process where the company seeks growers’ honest opinions.
“The meetings are very open and frank, where they’re generally sharing information that’s not out in the public sphere,” he says. “We’re able to see what’s coming down the line, and play a bit of the futurist role. It’s a good, open, two-way dialogue. They appear to be very keen to work together.”
Kenny agrees with the University of Saskatchewan’s Peter Phillips assessment of the company’s challenges based on being first in the market.
“They were first out of the gate, therefore they’re immediately associated with any biotechnology issues or controversies,” Kenney says. “It’s almost like they’re seen as being guilty by association.”
Monsanto Canada chief Mike McGuire is convinced that these new efforts are beginning to pay dividends already. He points out that with the expiration of the patent for the original Roundup Ready soybean genes in Canada and the U.S., the company’s efforts have been put to the test.
The company wondered if its gut feel about grower attitudes was wrong, and if farmers would run as far and as fast as they could from the Monsanto TUA.
“It’s interesting,” McGuire now says. “Most of the growers we’ve talked to weren’t feeling the contract agreement was an obstacle anymore.”
Maybe, though, the change was about there being a new kind of farmer on the back roads, instead of a new kind of Monsanto.
McGuire for one sees a convergence in the evolution of farmers and Monsanto.
“The growers that are commercial producers and are really forward-looking are driving agriculture these days,” McGuire says. “They manage their business in much the same way as we started the whole thing 10 or 15 years ago, so the whole concept of having agreements, having relationships based on more than a handshake, has become commonplace.”
Again, though, this is a process that Monsanto has actively encouraged, especially with aggressive new hiring across the country and the assembling of a field team that is characterized overall as young, sharp, and very loyal to the Monsanto philosophy.
McGuire refuses to take credit for this, preferring to emphasize the team dynamics within the company. In behind the scene interviews with Monsanto staffers, however, the talk always turns to McGuire’s keen strategic mind.
Unique, American
One challenge that won’t be going away any time soon for Monsanto is the fact it’s an American company, says Phillips.
“The fact they’re an American company shouldn’t be discounted,” Phillips says.
There’s also another key difference, says Phillips — the fact that Monsanto is an entirely agriculture-based company, what he says is very close to being a “pure biotech play.” As McGuire puts it, if there’s an R&D dollar to be spent it’s going into agriculture, and there are no discussions about whether it would be better spent developing a better house-wrap or a new medication.
“The European companies have said different things, they’ve hidden a bit behind some of the industry groups, and they’ve had the luxury of Monsanto being willing to say some of the hard things,” says Phillips.
Another key difference has been the way some of the other companies have changed their corporate identities through a series of mergers and rebranding, points out Phillips. When a new company, with a new name, emerges it then immediately distances itself from any past controversies.
“Monsanto hasn’t done this, even when it’s had the chance,” Phillips says. “When they introduced their first biotech crops, their Roundup herbicide was just coming off patent, and they could have called them anything they wanted to — but they stuck with the Roundup brand.”
Likewise, when the company shed its consumer products it had the perfect pretext to shed the Monsanto name — and associated baggage — but chose instead to stick with its established brand for better or worse. Phillips says the challenges the company faces can be seen mirrored in other emerging sectors, like computing and the Internet.
“When you’re the first mover, you always get shot at,” Phillips says. “It happens everywhere. Look at Google, Microsoft, even Apple now. When a company is seen as being too big and too successful, they’re seen as being dangerous.” CG