Upstream Ag Professional - November 26th 2023
Essential news and analysis for agribusiness leaders
Welcome to the 19th edition of Upstream Ag Professional!
I hope everyone celebrating US Thanksgiving had a wonderful holiday!
Index for the week:
Ecosystem Innovation Through the Lens of InnerPlant
Upstream Ag Professional Video Summary for Q4 To Date
Anglo American’s high-stakes bet on a new way to feed the world
Carbon and Deveron Q3 2023 Results
Rock, Paper, Scissors and Enhanced Rock Weathering
John Deere Q4 2023 Results
FMC Investor Day 2023 Highlights and Analysis
How to Miss By a Mile
1. Ecosystem Innovation Through the Lens of InnerPlant - Upstream Ag Professional
What agribusinesses can learn from *InnerPlant and applying The Wide Lens to their strategy.
Ecosystem Approach in Agtech: The collaboration between InnerPlant, John Deere, and Syngenta exemplifies the importance of an ecosystem approach. This approach, as emphasized in Ron Adner's "The Wide Lens," highlights the necessity of aligning various technologies and stakeholders, like sensors, satellites, and seed companies, for success with new technologies within plant-by-plant disease management and beyond.
Managing Co-Innovation Risks: InnerPlant's success in navigating co-innovation risks is notable. CEO Shely Aronov's strategy of aligning InnerPlant’s solutions with the financial and operational goals of major agribusinesses like John Deere and Syngenta has been effective. This includes addressing problems crucial to company profits and creating a vision that engages these companies, fostering strong partnerships for mutual growth.
Importance of the Adoption Chain: For InnerPlant’s biotech traits to be successful, it's essential to create value for all stakeholders in the agriculture value chain, including input manufacturers, distributors, retailers, agronomists, and, ultimately, farmers. This comprehensive approach is vital for overcoming adoption chain risks and ensuring widespread acceptance and success of the technology and signals future initiatives.
Two weeks ago, I highlighted the announcement surrounding InnerPlant, John Deere, and Syngenta creating an ecosystem in working toward plant-by-plant disease management.
I used the term ecosystem to describe it very pointedly.
The reason stems from reading professor and strategist Ron Adner’s book The Wide Lens.
I think using just a few of the concepts from the book helps us understand why InnerPlant is seeing success and paints a picture for future players within the ecosystem.
InnerPlant through The Wide Lens
The back page of The Wide Lens states the following (emphasis mine):
How can great companies do everything right— identify customer needs, deliver excellent innovations, beat competitors to market— and still fail?
Many fail because they focus too intensely on their own innovations while neglecting the innovation ecosystems on which their success depends. In our increasingly interdependent world, winning requires more than just delivering on your own promises. It means ensuring that a host of partners—some visible, some hidden— deliver on their promises, too.
When looking at the InnerPlant technology— a biotech trait that enables farmers to understand what a plant is experiencing (stresses such as disease, insect feeding, etc), it becomes apparent that there is an array of other technologies necessary for InnerPlant to be successful— sensors that can interpret the plant signal, satellites inexpensive and ubiquitous enough to deliver constant signal readings, pieces of equipment in a field with the ability to interpret the signals and act on them, a higher quality germplasm to place the trait, and crop protection companies that want to leverage that novel signal to deliver a better outcome to farmers as just some of the examples.
Much of this can be done in an integrated fashion by InnerPlant itself. However, there is an ability to collaborate with various influential players, increase value throughout the supply chain (more on this later), and embed itself in the fabric of industry best practices.
In a 2006 Harvard Business Review article on the same subject called Match Your Innovation Strategy to Your Innovation Ecosystem (I highly recommend purchasing the book, though the article is very insightful, too) by Dr. Adner, he stated the following (emphasis mine):
For many companies, however, the attempt at ecosystem innovation has been a costly failure. This is because, along with new opportunities, innovation ecosystems also present a new set of risks—new dependencies that can brutally derail a firm’s best efforts. Even if a firm develops its own innovation brilliantly, meets and exceeds its customers’ needs, and successfully excludes its rivals, a market may not emerge. Whether—and when—it emerges is determined as much by the firm’s partners as by its own performance.
InnerPlant CEO Shely Aronov has not only acknowledged this in regards to InnerPlant’s innovation but has also leaned into it by establishing collaboration initiatives with the likes of John Deere, Syngenta, and others:
To lean into this approach, there is the need to navigate and optimize around, as Dr. Adner identifies, new types of risks for ecosystem development:
Execution risks—the challenges you face in bringing your innovation to the required specification within the time necessary.
Co-innovation risks—the extent to which the successful commercialization of your innovation depends on the successful commercialization of other innovations.
Adoption chain risks—the extent to which partners will need to adopt your innovation before end consumers can assess the whole value proposition.
Execution risk is generally within a company’s control— in the instance of InnerPlant, this comes down to being able to place the trait into seeds successfully, delineate the signals effectively, etc., so I won’t get into that today.
Co Innovation Risk
Optimizing co-innovation risk is what the InnerPlant team has done effectively to this point.
A company like John Deere is a large entity with particular focuses. It isn’t necessarily interested in another pilot or trial project. John Deere wants to work on things that will drive its business forward, consistent with its vision.
That means the most crucial aspect of co-innovation risk is overcoming the initial threat that no one wants to commercialize with your innovation. The co-innovation timelines and alignment are still necessary, but I want to focus on getting the initial collaborations moving forward.
Being that the InnerPlant team has driven multiple partnerships in which significant resources have been committed from leading agribusinesses, I asked Shely what the key to this was.
Three specific things stood out to me from her commentary: