Welcome to the 32nd edition of Upstream Ag Professional
Index for the week:
Bayer 2024 Capital Markets Day and the Toughest Job in Agribusiness
TELUS Formally Announces Proagrica Acquisition: Strategic Acquisition or Act of Desperation?
Generics, Biologicals, and the Volatile Farm Inputs Market with Sam Taylor, Rabobank
21 Ways To Guarantee Failure in Agribusiness
Climate-Data Startup With All-Star Investors and Roots in Africa Nearly Collapses
Regardless of Age, Selling is About Knowing Your Customer
The forgotten investment class - Prime Future
There’s zero value in learning signaling.
Learning investments should generate returns in better thinking, mental models, processes, ideas, articulation of ideas, and results. That’s the end goal, anyway.
None of this is for the sake of some certification you can share on LinkedIn because, my brother, no one cares about that.
My friend Janette Barnard has very similar viewpoints to investing in oneself to constantly adapt and improve.
One of the beliefs I have is that every serious agribusiness professional should allocate a set amount of two resources to amplify their career and business: time and money.
I came up with the 10% rule for myself over a decade ago to ensure I had a framework for investing in myself and improving every single week.
The 10% Rule
Learning and continued self improvement is a priority of mine. To keep myself accountable, I developed a simple framework.
I think it is an adaptable framework for any one as well, no matter how busy.
Some take experience as it comes at them, some take opportunities if they are convenient and some show effort for short bursts of time.
None of these are a recipe for prolonged personal or professional growth.
Just like our muscles need to be consistently pushed and worked out to be healthy; our minds need to be consistently stretched to grow.
The framework I use to help accelerate my own learning breaks out like this:
3% of annual income + 7% of my time devoted to learning, networking and getting outside my comfort zone = 10%.
Breakdown
Someone with $75,000/year salary would invest $2,250 in themselves through books, e-mail subscriptions, courses etc. ($75,000 * 3% = $2,250)
168 hours/week x 7% = 12 hours/week.
This equates to 12 hours/week devoted to reading, consuming subscription emails, taking courses etc. that the 3% expenditure bought to ensure a consistent focus on developing.
This framework has ensured consistent investment in myself. And I think it’s applicable to everyone.
Understandably, not everyone can afford that sort of financial investment or time commitment, but I highly encourage you to adapt it to what works for you (Note: It still surprises me that in a knowledge driven industry we don’t have companies that offer a percentage of salary as a spending account for courses, books, newsletters etc, and expect the individual to spend it, just like some companies offer “health spending” account benefits.)
For example, try a 4% rule: 1% of income and 3% of time.
The point is consistency and holding oneself accountable for it weekly or monthly.
With the constant progress in technology, scientific breakthroughs and continuous demands of people, our only real option to thrive as knowledge driven professionals is a commitment to self improvement.
I always have these two quotes in the back of my mind:
We are only limited by what we’re not willing to take the time to learn.
And the other from marketing legend Seth Godin:
In a competition between someone who knows the most and someone who is willing to learn the most, the edge usually goes to the curious and empathic professional, not the one who is simply protecting what’s already known.
In the rapidly evolving world of agriculture, the difference between leading and lagging behind often comes down to one key element: knowledge.
One of the goals of Upstream is to deliver thinking frameworks to improve agribusiness professionals understanding of the industry and ability to make informed strategic decisions to catalyze your career.
Upstream Ag Professional offers not just news, but deep insights and analyses on the latest innovations and business trends that matter.
Investing in your yourself through Upstream Ag Professional is an investment in your professional future. Each issue is a seminar in the forces shaping agriculture today and tomorrow, from technological breakthroughs to market dynamics— it enables you to understand deeply, think critically, and act wisely with the most relevant insights at your fingertips.
Become an Upstream Ag Professional member today – because in agribusiness, being well-informed isn't just an advantage, it's essential.
1. Bayer 2024 Capital Markets Day and the Toughest Job in Agribusiness - Upstream Ag Professional
Key Takeaways
Bayer opted not to spin out any of their business units and instead prioritize the following areas (related to agriculture): addressing glyphosate and PCB litigation, reducing debt and continuing to implement its new operating model, Dynamic Shared Ownership (DSO), to improve performance. The street did not seem to like the news.
Specific to Bayer Crop Science, the changes coming are immense, even more so than the other business units due to initiatives such as digitally enabled sales and a focus on regenerative agriculture, plus DSO and headwinds on the glyphosate and dicamba front. Does that make Rodrigo Santos job one of the hardest in agribuisness?
Last week, Bayer shared its FY 2023 results and had its Capital Markets Day.
The event was highly anticipated as CEO Bill Anderson had stated he would share the go forward plans with Bayer’s three business units:
Pharmaceuticals
Health Care
Crop Science
Anderson and the Bayer executive team shared the news that the business units would be kept as is, stating the following during his prepared remarks:
In short, on the question of structure, our answer is not now. And this shouldn't be misunderstood as never. Of course, we'll keep an open mind. We always do that, but our priority is on tackling our challenges, boosting performance and creating strategic flexibility. We're convinced that this approach is what's best for Bayer.
With that, Bayer highlighted the four pillars for moving the business forward, deemed the “challenges greatly limiting” Bayer’s ability to choose their own destiny, whether that be as a 3-division company or in smaller parts.:
building a strong Pharmaceuticals pipeline
addressing glyphosate and PCB litigation (along with new strategies to mitigate that include lobbying efforts)
reducing debt (cutting dividend)
continuing to implement its radical new operating model, Dynamic Shared Ownership (DSO), to improve performance
The “street” didn’t appear to like the news or the guidance delivered on March 5th, with the stock dropping that day and ending down for the week:
Source: Google
The Bayer executive team elaborated on the rationale:
We seriously considered the structure of our company. We did this with the help of numerous external advisers and a set of assessment criteria that included valuation levels, value creation, speed of execution, execution certainty, timing of cash generation and the resulting leverage ratios and the impact on our future optionality.
When it comes to an IPO or a spin, this would require an all-hands-on-deck effort for 18 to 24 months, and cash contributions would be delayed beyond that time frame. In the meantime, the leverage ratios of RemainCo or NewCo could go up significantly, and that could jeopardize our access to reasonable financing.
I incorrectly predicted a Crop Science spinout— whether that meant breaking up the business itself (eg: selling CP separate from seed, or spinning it out together). The trend in all industries, along with in agriculture, is towards a singular focus— focusing and simplifying the business from an internal and external perspective and becoming more attractive to outside investors not wanting the company to “diversify” industries for them.
For now, Bayer has opted to operate in it’s continued pre-existing form.
DSO
It can’t be understated the emphasis on bureaucracy that Bill Anderson sees within the business.
Two weeks ago, I highlighted the Dynamic Shared Ownership model laid out by Bayer in Dynamic Shared Ownership and the Bayer Transition: What is it and Can it Work?
Conceptually, I follow the logic behind DSO. But also see the more pertinent challenges in having a less authoritative, top-down structure along with the pain of transitioning— which means a more significant leadership presence from the top is needed to instil confidence far outside the President’s reach.
In and of itself, this an immense lift for the leaders in each of Bayer’s three business units.
The thing is, DSO isn’t the only change coming to the Bayer Crop Science unit. And I think that’s the key takeaways from this week’s news.