The business mindset that drives the move to leverage third parties – that is, to hire outside non-staff help – is this: “I can do this job, but can somebody else do the work at a radically cheaper cost?”
Farmers have learned to do most jobs on the farm. They also own, in most cases, the equipment needed to do all field, yard, transport and maintenance jobs. But is that the best, most efficient and lowest-cost approach in all cases? Maybe not.
That is the kind of critical-analysis question that Shawn Kanungo, a ‘disruption strategist,’ would encourage all business owners to consider. Kanungo worked at Deloitte for 12 years, with a mandate to help corporate executives understand and plan for the opportunities and threats associated with major changes to the business ecosystem. He is now a partner with Queen & Rook, a firm that helps organizations adopt exponential technologies and move to the digital age. He spoke at the Canadian Crops Convention, the joint Canola Council of Canada and Canada Grains Council event, in Montreal in March.
Kanungo lists the three traditional methods for business growth: make more stuff, hire more people or take over other businesses. Now, he says, businesses have a fourth more powerful option for “exponential” growth: leverage third parties.
He uses Kylie Jenner’s Kylie Cosmetics as an example. Kanungo says the billion-dollar company, which 21-year-old Jenner owns, has a tiny staff that basically manages the brand and markets it through her massive Kardashian-driven social media following. “She doubled-down on her core competency,” Kanungo says, “and out-sourced everything else.”
Of course we don’t all have the Kardashian media brand and background wealth, but Kanungo’s point is that her company activities are almost entirely done by third parties – and her business growth has been exponential.
A discussion about how your farm business can grow – in terms of profit per acre, in terms of time and lifestyle – might include a new approach to third-party work. These are important ways to innovate, Kanungo says.
When people get together to brainstorm innovative ideas, the conversation often steers toward new products. Farm-specific conversations on how to innovate might lead off with new technology or new crops to add to the rotation. “But shiny new products are not the best ways to innovate,” Kanungo says.
Bigger, more disruptive innovations to the farm business could be found in production methods, in team management, in time management or in the value chain. And any one of these steps could see significant improvement through more strategic use of third parties.
Kanungo encourages farmers to look beyond new products and brainstorm alternatives in areas you’ve never thought about before. Are there steps that take time or have low return on investment that can be eliminated or hired out at lower cost? Re-evaluate some of those old common questions: What is the cost to own and operate a sprayer throughout the year? A truck? A combine? Yes, when you own the machine, it will always be there when you need it, but what is the cost for that benefit? Is there an option that is considerably cheaper and almost as good? What are the biggest logistical challenges throughout the year? Why are those a challenge? What alternatives could provide a game-changing improvement?
Tips to guide the conversation
Using Kanungo’s input, here is a checklist that a farm business can use to discover new ideas and practices that could improve results:
- Look at challenges within the business and within the value chain. Where are the inefficiencies? What one or two things might make the biggest difference to time management or stress reduction? What jobs do you wish someone else would do for you? Where can we develop deeper and more valuable partnerships? (For more on this, Kanungo recommends the article “Business ecosystems come of age” by John Hagel at the Deloitte Insights website.)
- What farm management practices are done because of nostalgia – because ‘that’s they way we’ve always done it’? Kanungo says nostalgia kills innovation. Is there a better way? Can you let go of that old method?
- What are other farms doing? When you see things that might work on your farm, take the idea and give it a try. “You don’t have to come up with all the ideas,” Kanungo says.
- What are innovative start ups within agriculture doing? How are others reevaluating the way farming is done? If farming is changing, who is changing it? And is there a place for you in this new model?
Kanungo says the process of leveraging third parties for growth requires an open mind, experimentation and a willingness to “unlearn” hard-wired practices. One way to approach unlearning, Kanungo says, is to “imagine the business without any preconceived notions.” You have this land. What is the best way to use this land? You have this skill. What is the best way to use this skill? You have these connections. What are the best ways to amplify these connections for business?
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Kanungo encourages a business culture of experimentation to test ideas. “How do we do the smallest experiment to see if there’s something viable there?” Kanungo says. That’s the thing about third-party help. They’re not on staff. You can hire them to do one small job or one field to see how it goes. And it can be more than field work. Think bookkeepers. Family meeting coordinators. Accountants. Business growth consultants. Career coaches. Grain brokers. The list goes on.
Think of all the third parties that could help transform the business. Test drive a few of them. Leverage the ones that can lead to exponential growth. That is innovative thinking.