AN EAR TO THE GROUND AND ONE FOOT IN THE FURROW
During his tenure, one of Bud Porter's core philosophies was that an organization must truly know what is on customers' minds. To keep in touch with customers, and to visit with those he most enjoyed, Porter hung his suit and tie in the closet and donned blue jeans, boots and a John Deere cap. Early in the morning, he'd slide behind the wheel of his car and point it down rural blacktop roads throughout farm country.
He remembers quite vividly why he went to such great lengths to "keep an ear to the ground" about what customers were saying. "If you're going to be in the farm equipment business, you've got to keep one foot in the furrow," says Porter. "My philosophy is to find out what's going on in farmers' minds. I made visits to farms, coffee shops, and John Deere dealers. I don't think there was a better way for me to find out in what areas they were struggling, and where they were triumphing. I enjoyed the coffee shop conversations and always took that information back to the boardroom."
Eventually, Porter implemented what became known as Customer Focus Meetings. Once per quarter, he arranged for the senior officers of John Deere to go out to various parts of rural North America. Farmers' comments ranged from production agriculture to politics to finances to the weather.
Meetings such as these were quite useful before new product introductions as well as afterwards. "Once a new product is introduced to the marketplace, it continues to be improved upon," says Porter. "We can no longer afford the luxury of turning an engineer loose to design a product and then just hope that a customer will buy it. We need to experience what's going on in the field so we can go back to the engineers and talk through new requirements as well as ideas for updating existing products. When the 8000 Series Tractor rolled off the line, we had successfully produced a tractor with revolutionary, cutting edge technology that also offered operator comfort like never before. However, once customers had the chance to operate them, there were items that they wanted fine-tuned."
CUSTOMER EXPECTATIONS CHANGE
Besides discussing product satisfaction with customers, the company was able to pick up on attitude trends. Customer expectations were changing. Farmers no longer considered John Deere as just an equipment company. Customers wanted the most value from a company's product or service.
"They demand excellent customer service and solutions to their problems," says Porter. "Today, customer expectations are as great as they've ever been. Customers are under a lot of pressure from low commodity prices, implementation of new technologies, and government regulations. We have to listen to them and continue to bring them more and more value through superior, high-quality products, excellent customer service, and technology."
Porter says that while John Deere continues to develop and implement cutting-edge technology, the company always evaluates the technology's viability. "Some believe that John Deere is chasing technology for technology's sake. That couldn't be farther from the truth. If we can't use technology to increase productivity or profitability to the customer, then we won't deliver it at all. Again, a good example was the 8000 Series Tractor. That tractor had more sophistication and features than ever before. We brought it to the marketplace at the same price as the tractor it replaced. Technology allowed us to do that. For years, John Deere has lead the industry in research and development. That won't be changing. Technology improvement and new product development will remain core commitments and strengths."
JOHN DEERE CHANGES WITH THE TIMES
Always taking pride in the fact that it was a vertically integrated company, John Deere is transforming itself from a manufacturing-centric company to a marketing-centric company. "I think John Deere is still viewed as a manufacturing company. However, it has evolved. Culturally, this was a huge step," he says. "In the past, more than 80 percent of a product's content came from a John Deere factory. Today, less than 60 percent of a product's content is manufactured in a John Deere plant. Employees had to learn who the customer really was in order to understand how they were a part of providing what's driving John Deere - superior quality and customer value. Getting 36,000 employees to understand how they contribute to the end-user has been a challenge. We're not quite there yet, but we will be."
The company felt it was getting too distant from its customers, and its sales branches were bogged down with administrative details. For the first time in the company's history, it separated the sales from marketing functions and consolidated marketing efforts at the North American Agricultural Marketing Center (NAAMC) in Lenexa, Kan., during October of 1998. "John Deere can now do a better job in all marketing areas, from advertising to whole goods distribution to training. There are experts working in each area," says Porter.
He adds that it certainly wasn't an easy move to make but it was definitely the right one. "Was it easy to accomplish? I would have to say an emphatic, 'No!' We had to start with key managers such as the former branch managers. Each of their jobs was going to change. Some of them would have to start new careers within the company. The move to Lenexa represented a tough time for many employees. There were times I even felt like backing off. However, in visiting with some of my strongest opponents today, they readily admit that the move was a great thing for John Deere. I'm glad I stayed the course. What really drove me was the fact that I knew so strongly that the business had changed and we needed to change with it."
GLOBAL MARKET OPPORTUNITIES
With customer expectations rising and market conditions on the move, John Deer is seeking to optimize its global opportunities. Every customer in North America is impacted more today by worldwide activities than at any other time in history, whether it's the Asian financial crisis or weather conditions in South America, Europe, or Australia. "Agriculture is a global business, so it is imperative for us to be a global company as well," says Porter.
John Deere has a presence in more than 160 countries including the United States, Canada, Argentina, France, Germany, Holland, Mexico, South America, and Spain. "Our global market positioning ultimately means better products and services for customers," he says. "This comes from being able to leverage a worldwide presence - having the ability to share good ideas and advances in technology, and being able to provide services on a wider scale that potentially bring more value to individual customers. For example, Western Europe historically has been a leading market in the development of new technologies. Being a global company helps us better leverage advancements from any area of the world, for any market. That's why centralizing our marketing efforts at NAAMC in Lenexa was such a strategic move for the company."
INTERNET IS A TOOL, NOT A DEALER REPLACEMENT
Whether you are talking about implementing new technologies or global marketing, the heart of how John Deere does its business includes a strong commitment to the company's dealer network. In selecting dealers, John Deere takes criteria such as the individual's character, capital, and capacity into consideration. High expectations are set for these individuals who are treated as customers as well as partners. It is because of this relationship that John Deere will not consider abandoning its dealer system.
"There are those who might not understand the operation of a John Deere dealership," he says. "They may think the Internet can replace the dealer. I feel just the opposite is true. I think the Internet is going to be a very valuable tool enabling the dealer to provide more timely information to the customer. When it comes to making a major machine purchase, such as a combine for $200,000, I don't see any of those being sold over the Internet. Why? First, there's usually a trade-in involved. Who's going to take the trade? Second, what about product-support issues? Customers also purchase support for the product they buy. When a combine goes down, it's probably costing the customer $350 to $400 per hour. If it's purchased over the Internet, whoís going to service it? Lastly, what about immediate parts availability? More than half the parts sold today are sold due to equipment breakdown, and the customer wants his machine going as soon as possible. Our goal is to have that machine up and running within two hours. You're not going to do that over the Internet! I clearly see the Internet as being an additional communications tool for our customers. We're already offering parts over the Internet, but they're sold through our dealer channels."
The company's dealer network has helped keep John Deere independent. Porter matter-of-factly states that staying focused on company ideals such as quality products, customer satisfaction, and return to stakeholders has been key to the success of John Deere throughout the last 164 years. "A company must stay focused and not deviate during tough times," says Porter. "A good example is our dealer network. We can't provide quality customer service without it."
He says those original ideals are what's keeping the company focused today. "The older John Deere gets, the more determined we are as employees to keep growing the company with those original ideals - quality products, customer satisfaction, and return to stakeholders. We may have changed the way we market our products and services and how we speak to dealers and customers, but our ideals remain the same. I think the key is sticking to these ideals and also to our greatest competencies - manufacturing superior products and marketing them through a dealer organization."
Porter says, "My main goal when I got into management at John Deere was to leave this company in better condition than when I started. I think I accomplished that goal. I look at this company's bright future and where it is heading in the next five years and hope it has some of my fingerprints on it." AM