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Sixth Annual
Farmer Cooperatives Conference
October 30, 2003
The Speed of Execution
John E. Gherty
President and CEO
Land O’Lakes, Inc.
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Speed of Execution
Be fast or be gone!
Dr. Chris Peterson
Department of Agricultural Economics
Michigan State University
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Speed of Execution
Change … You don’t have to do
it. Survival is not mandatory.
Peter Drucker
Business analyst and author
In today’s business environment, cooperatives must
do things different, better and faster, if we are going to
survive and succeed.
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Speed of Execution
Success in today’s economic
environment depends greatly on
the ability to envision the future …
and get there first!
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Topics
 How cooperatives can accelerate
their “speed of execution”
 Laying the foundation
 Implementation
 What can go wrong
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Today’s Business Environment
 Accelerating change
 Economic globalization
 Industrialization of agriculture
 Intensifying levels of competition
 CONTINUED DRIVE FOR SIZE AND
SCALE!
Change – The Continued Drive
for Size and Scale
Must have the necessary size
and scale to:
 Meet the increasing demands of
large and growing customers
 Meet the challenge of large, wellfinanced, aggressive competitors
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Change – The Continued Drive
for Size and Scale
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Every market will be dominated by three
major players, with small specialty
players filling niche markets, and any
company caught in the middle will be
swallowed up or destroyed.
J. Sheth/R. Sisodia
“The Rule of Three … Surviving
and Thriving in Competitive
Markets”
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Change – The Continued Drive for
Size and Scale
Land O’Lakes Corporate Goal
“To operate businesses with
number-one or number-two
market shares or strong,
defendable market niches.”
Change – The Continued Drive
for Size and Scale
Focusing on growth is in itself a
change for many cooperatives …
focusing on achieving growth in
collapsed time frames
is a major change.
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Speed of Execution
Laying the Foundation
 Culture/operating state
 Strategic planning process
 Communication
 Balance sheet
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Speed of Execution –
Laying the Foundation
Culture/Operating State
 Commitment to the cooperative as a
business organization
Land O’Lakes is first and foremost a business organization.
The essence of Land O’Lakes mission is to create long-term
value for its member-owners through superior financial
performance. At the same time, the cooperative has
responsibilities to its membership that differ from those of a
proprietary corporation. However, only through achievement
of our business and financial objectives will the organization
accumulate the resources required to successfully fulfill the
economic, social and political expectations of its owners.
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Speed of Execution –
Laying the Foundation
Strategic Planning Process
 Good data
 Clear vision
 Board and management alignment
Other players skate to where the puck is,
I skate to where it will be.
Wayne Gretsky
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Board/Management Alignment
1.
2.
3.
4.
5.
We must continue to grow, if we are going to
have the size and scale necessary to compete
effectively, long-term, on behalf of our owners
Resources are finite and Land O’Lakes growth
must be consistent with proactive management
of our portfolio
Generating industry-competitive financial results
is critical to success
Exceptional people will be essential to our
success
The breadth of the Land O’Lakes system must be
leveraged where it creates competitive advantage
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Speed of ExecutionLaying the Foundation
Effective Communication with
Members and Leaders
 Essential, non-negotiable,
cooperative leadership responsibility
 Critical to member understanding
and trust
 No surprises!
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Speed of Execution –
Laying the Foundation
Balance Sheet Strength/Access to
Capital
 Intensified focus on performance and
balance sheet strength
 Commitment to proactive portfolio
management
 Development of alternative sources of
capital
 Willingness to explore new business
relationships
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Speed of ExecutionImplementation
 Leadership Team
 Board Role
 Communication
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Speed of Execution –
Implementation
Leadership Team
Select leaders wisely
 Clarify expectations
 Hold accountable
 The “intangibles”

“The old adage ‘People are your most important
resource’ turns out to be wrong, people are not
your most important resource, the right people are.”
Jim Collins
“Good to Great”
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Speed of Execution –
Implementation
Board Role
 Understanding of, and alignment
with, business objectives
 Willingness to act in collapsed time
frames
 Discipline in communicating and
advocating the organization’s
message
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Speed of Execution –
Implementation
Communication
 Go to the members
 Timely
 Honest
 Two-way
 Complete
Speed of Execution –
What Can Still Happen
 Failure to recognize the time it takes
to fully implement change/integrate
growth
 Reactions of customers and
competitors
 Management capability to lead a
larger organization
 Difficulty in evolving a new culture in
a larger, more complex organization
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