Relevance - Standing the Test of Time

By Dave Christiansen, President and CEO

Regardless of what cooperative I happened to be serving at the time, it’s certainly been interesting over the years to pause and reflect on the relevance we possessed and to whom. The first time I recall listening to a discussion about relevance was in the mid-'70s when the co-op I was working for achieved record sales. That certainly seemed a big deal at the time and I recall our vendors treated us as such. As an employee group we took a lot of pride in what our relevance meant we could deliver to our customers. At the time, little did we know the bar to be considered relevant in the agricultural industry was beginning a very rapid ascent.

While recently searching through MKC’s history, we came across board notes dated September 1964 about the merger discussions between the first three cooperatives. I was simply amazed at the similarity of advantages identified by those board members and how they are still applicable today. The board groups noted by coming together and increasing their scale they could hire additional people, specifically fieldmen. 

Other items noted as advantages of a merger included better management of inventory, better use of labor, reduced costs per unit, serve a larger territory, improved buying power, wider use of equipment and facilities, increased sales, improved service, bigger patronage from regional coops, improved interest rates, and attract new business. In addition the board members identified another cooperative to visit with about entering the group, and for all the same reasons.

Only one disadvantage was listed in those notes and it was referenced as "sentimental attachment to the existing organization." Some things haven’t changed in 50 years! I am in awe when I think about the courage those men demonstrated at that meeting. To be that visionary and take steps to prepare for the future knowing a decision such as that would be received with mixed emotions had to be difficult. Those board members wanted to continue to increase their cooperatives’ relevance because they believed in what it would do for their members. They understood the bar for relevance was rising, even if they had no concept of how fast it would occur.

Today, faced with a world that is consolidating, collaborating and selecting partners in every business segment, we continue the course our founders laid before us. We continue discussions with partners who have the same vision, who make us better and enhance our ability to help our customers be more successful. We understand more so today that relevance in our industry significantly improves our ability to deliver value to our customers. Just as it was in 1964, the bar for relevance continues to rise.

We can make the choice not to pursue growth. If we had a retirement date or made a conscious decision to serve a limited niche market, it may be an applicable strategy. However, if our desire is to prepare for those farmers of the future, we should continue the same strategy as set forth by our founders so many years ago.

Over the years mergers somehow have taken on a very negative connotation. This is primarily due to the fact one party generally had to be suffering before considering a merger discussion. There had or was perceived to be a winner and a loser. This hasn’t been the case for many industries and as you are starting to see, many cooperatives aren’t waiting either. Many discussions today are occurring between very solid organizations that understand what relevance does for its members.

Since 1964 we’ve clearly demonstrated MKC’s growth has been beneficial to the customers in many ways. I will be the first to admit growth brings a new set of challenges and opportunities. In some cases we’ve learned new lessons and quickly captured the synergy. When the synergy doesn’t occur, we are recognizing failure earlier and taking immediate steps to fix it.

Today, I would add a few items to the list of advantages created by our founders. Attracting and retaining employees would be first on the list. Specifically, specialized skills required by today’s producer including risk management tools, precision ag, etc. One of the biggest challenges our industry will face over the next five years is the lack of talent to fill agricultural jobs. It is estimated there will be 52,000 agricultural jobs available and only 32,000 graduates in the field of agriculture to fill these positions. If those numbers aren’t bad enough, compound them with the fact we don’t live in an area of the country that students think of first when they graduate.

What this tells us is anything we can do to make ourselves more attractive to college graduates and anyone seeking a career in agriculture, the better off we will be. We know most people will lean towards larger, progressive, technologically advanced and growth-minded organizations first. They do this for many reasons but having a potential career with a visible path rather than simply a job is the main reason. In addition, larger companies can offer better benefits due to scale and may be a place where someone seeking a career will look first. We recognize great employees make for a great company and the longer we can keep them with us, the better the cooperative and its members will be. If we give employees a place to start a career and show them a future, even while in college, we will have even more opportunities to create success for our cooperative.

Vendor relationships with larger companies is another item I would add to the list of advantages. Love it or hate it, it’s simply part of our business climate today. Through strong relationships with our vendors and a mutual concern for each other’s success, we can deliver added value to our customers.

Local control is another advantage. While our founders probably didn’t think much about this, our desire to have the vast majority of decisions affecting customers made at their location makes a real difference as we expand our footprint. We certainly need consistent standards to ensure customers get the same experience when using multiple locations. Just as they were in 1964, most decisions affecting customer service today are made every day at the local level.

I want to sincerely thank our founders - many who are still around - for their effort and courage to grow our cooperative. Just like our founders, we can’t predict what agriculture will look like 50 years from now. All I know is we must continue to grow in order to attract and retain employee talent and develop vendor relationships that will be vital to the future success of the cooperative and our members.