Doing business in a complex world
What should a business strategy look like in today’s world? A world that is impacted by globalization, climate change, geopolitical relations, economic crises, environmental issues, public health threats and loss of biodiversity? Lecturer Krijn Poppe and student Rob van Dijk of the Executive MBA in Food & Agribusiness question each other.
“We do not pretend to have the answers to all the questions that arise, that would be an illusion. In the MBA we offer our students theory and materials from disciplines such as economy, psychology, sociology, marketing, public and business administration that are relevant for the management of organizations.” says Krijn Poppe, emeritus senior economist at Wageningen Economic Research. As a lecturer he is involved in the Food & Agri Integration Module ‘Doing business in a complex world’.
“We interactively discuss cases and practice working on them in groups. This way we can ingrain certain attitudes and show students how to handle issues and gain a better understanding of the situation, which is paramount for decision making,” Poppe explains.
One of the tools is a scenario analysis that Poppe uses in this long read to identify changes in the Dutch food system which can be brought about by the Covid-19 crisis.
Responsibility and energy
As for working in a complex environment, student Rob van Dijk can relate. He is a plant & logistics manager at a medium-sized animal feed cooperative ‘Voergroep Zuid’. After Van Dijk obtained his master’s degree in work and organizational psychology, he started to work in the feed industry. “My family has an agricultural background and I feel connected to the sector,” he stresses. Soon Van Dijk found he was much more interested in being involved in operations than in a staffing role and he became an o
perational excellence m anager before moving to his current position. “After leading small teams for years, I now have the responsibility to lead both our biggest plant and the logistics department. While working longer hours it gives me a lot more energy,” says Van Dijk.
His study in psychology being a rather unusual preparation for the job, Van Dijk took up the Executive MBA in F&A in September 2018. He will graduate in September 2020. “I wanted to learn more about the backgrounds of the agricultural sector and gain more knowledge on theory and concepts, besides working on my personal development and expanding my network,” Van Dijk clarifies. He feels that the study has helped him to develop strategic insight and to take internal and external factors into account which are relevant for the long-term.
Krijn Poppe is very interested in the working context of Van Dijk. The animal feed cooperative is located in the Dutch province of Noord-Brabant where livestock farming is under debate. “The intensive scale of livestock farming in this region causes air pollution and health problems. The sector also contributes significantly to the high levels of nitrogen emission in the Netherlands that are severely damaging nature. The environmental impact will certainly lead to a livestock reduction in the near future. But a group of farmers resists change and is supported by some politicians. The debate is becoming more polarized”, Poppe illustrates.
Despite its resistance the agricultural sector will have to become more sustainable, Van Dijk admits. “Livestock farmers tend to be rather conservative and focused on the short-term, even though it is a long-term business. The current business models are based on mass production for export and do not take the environmental and societal costs sufficiently into account. I am passionate about the agricultural sector and I have the farmers’ best interests at heart. I know they really care for their animals and the environmental impact.” Poppe agrees: “Farmers receive a lot of unjust criticism nowadays. Basically it is a system problem.”
Part of the module consists of the ‘Living Business Case’ of Flevoland, a Dutch province that has been reclaimed from the sea. The polder harbors a lot of agricultural activity and a big city as well. During three days the students work together on agribusiness cases situated here. One of the cases is an export company in seed potatoes, a crop that over time depletes the soil if grown in high rotation. Also there is an organic arable farmer that rotates crops to maintain soil quality and collaborates with colleagues in processing and marketing of beet root. The third case focuses on urban agriculture. To provide the students with background knowledge they attend various lectures and visit the World Soil Museum in Wageningen.
“In this assignment we bring theory into practice and learn how to combine seemingly conflicting aspects such as sustainability and profitability,” says Van Dijk. Poppe adds: “The question arises whether we can afford an agricultural system aimed at export that has no connection whatsoever with the city or the people in it, the same people who ultimately make up the governance and administration of the province and the water authority.”
As for his own company, Van Dijk believes that the farmers need support in the form of legislation from the government and in the form of extension and innovation from the feed companies and other chain partners. But since the animal feed cooperative depends on its members, the farmers, it is not prone to sustainable renewal either. For instance his company could invest in renewable energy and circular use of raw materials but the management is not considering the options yet. Van Dijk exemplifies: “If a machine breaks down, will we replace it with a similar one or invest in a machine that can also meet the demands of more sustainable production in about ten years?”
Poppe advises Rob van Dijk to segment the members into different target groups that can be approached according to their values. “This will be a more gradual method than diversification, since we do not want to distance ourselves too much from the farmers”, Van Dijk responds. “Also tools from the module such as scenario planning, business model innovation, game theory and change management, can be helpful”, he adds.
Ultimately the solutions for the agricultural sector in the Netherlands have to be found on the local level, Poppe believes. “The solution cannot be trumped up by Brussel or The Hague. The government needs to develop a vigorous strategy according to which regions and villages can see for themselves what is necessary. Farmers, inhabitants, administrators, nature managers and other stake holders need to drink coffee with each other and discuss how they want to live together in ten or twenty years.”
Because of the demands and challenges in the sector many professionals in agribusiness keep looking for ways to innovate. “The Executive MBA is a trajectory for personal development and creates a lot of enthusiasm, insight and the capability to use different methods”, Poppe says. He continues: “Sometimes students realize it is difficult to apply their newfound insights in their work environment but we hope it has the effect of an oil stain. When you can share some of your insights and decision making processes within the management team it will create more awareness.”