Have you done a SWOT analysis on your business? A SWOT is something that everyone should do. If you are in Western agribusiness, you would be surprised how similar most organization’s SWOTs tend to be.
As a test, I built the following generic SWOT:
How closely does this align with your view on your organization? I’m sure it isn’t 100%, but I would guess that there would be a decent amount of overlap.
Strengths
We never talk about strengths, but yes, our industry has them.
People – Knowledge of business – Culture: We all have great people who have been doing the work for years. We’ve created a great GSD (getting stuff done <- polite version) culture. We are motivated to do right and be successful.
Barriers to entry: There are significant barriers to entry in what we do. How many have been born into it? Look at the capital required to start.
Willingness to try new things: You may disagree that it is a strength, but I believe we are willing to try new things. I remember my father getting a laser to level a field evenly, which was unheard of at the time. We also had failures as things were tried that didn’t work. Willingness to innovate has not been historically an issue.
Government Support: Finally, let’s face it: government support is a strength for much of Ag. Yes, they impose a ton of expense, which is a threat, but their support is also a strength.
Weaknesses
Of course, we all love talking about our weaknesses.
Lack of visibility: Too many of us do not have proper insight into our COGS, what’s in inventory, what our actual margins are and the like. It is a shame because data is the new competitive advantage for organizations. Visibility into that data can enable a company so much.
Margins and Costs: Our margins are too small, and our costs are too high. If you don’t agree with those two weaknesses, let me know…I’d love to talk to an actual unicorn.
Stickiness: We often don’t have stickiness. Our roots are in the commodity business. We must look at ways to manufacture stickiness.
Business Processes: We also don’t have processes. Yes, we have processes in quality. Our manufacturing is full of processes. But there are so many areas where we lack solid processes. It’s from our GSD attitude. If we had strong business processes, criminals wouldn’t be so successful with ACH fraud thefts. If we had robust processes, HR would inform IT when someone leaves the company to avoid cyber risks. Yes, that was a bit self-serving, but it is true.
Managing IT: Ok, this one is entirely self-serving. But people don’t know how to manage IT. It is often seen as black magic or an annoyance you must put up with. We need to understand that IT runs our businesses. It needs to be managed like any other piece of equipment. Don’t miss maintenance; you wouldn’t on any other equipment.
Facility Space: Does anyone have enough space? If you do, you must not be trying to automate enough. Remember, automation takes space. People can do work in smaller spaces than machines need. Humans do have at least one advantage over machines.
Opportunities
There are opportunities everywhere. Here are a few of them.
Data Visibility: We have one untapped resource that can make us so much better…our data. We collect a ton of data and promptly never use it. Data is the key to our efficiency and our competitiveness. Using data will make us better as we turn it into actionable insights.
Automation: Everyone understands this. Automation is our future. Our labor force is critical, but it isn’t guaranteed. We must automate more. Ultimately, so many incremental efficiencies can be gained through automation. And those efficiencies translate directly to the bottom line.
Vertical Integration: While a stretch for many, when possible, vertical integration can make organizations stronger, more competitive, and more resilient.
Threats
Government Regulations: Yes, government regulations seem to be ever-increasing. Technology can play a significant role in meeting these expanding requirements. How else can we keep up?
Labor Force: We have always had critical stressors on our labor force. Automation generally is our way out of this. At least, it is a solution we can control versus expecting the government to solve this problem.
Cyberthreats: Cyberthreats are constant in our industry. They have taken firms down for weeks at a time. This doesn’t work in the fresh vegetable reality. We must build to defend against attacks and to recover quickly when the criminals are successful. Cyberthreats go beyond this, but those topics are for another day.
Food Safety: Food safety is always on top of everyone’s mind. We spend a ton on it, study it and attend conferences about it. Enough said.
Some outstanding questions
Of course, there are other areas that I don’t know where they should land. Is SKU count increasing a strength or a weakness? It is a strength because they lead to increased margins and are stickier but are also more expensive to produce. Just the start-up and tear-down leads to higher COGS
The other is that VCs love Ag right now. They see the opportunities I’m describing here and are jumping on it. But they can be fickle. When they understand we are a low-margin business, will we lose them? Are VCs an opportunity, a weakness, or both?
Technology as a farming input
If you generally agree with the above SWOT, then take the next step and determine what technology can answer. I believe the list of where tech can help is impressive.
Technology should play a role in every one of those topics with an arrow. Isn’t it impressive how much technology can aid us? And I don’t believe I am overreaching in my estimate. Technology is the new farming input. We must lean into it to better our future.
