Q&A: Eric Hansotia, chairman, president, and CEO of AGCO
In the midst of a global pandemic, Eric Hansotia succeeded Martin Richenhagen as chairman, president, and CEO of AGCO on January 1, 2021. As the former COO of AGCO, Hansotia has more than 25 years of experience in the agricultural equipment industry. Editor Natalina Sents sat down with Hansotia for a one-on-one conversation at a recent Fendt machinery launch in his home state of Wisconsin.
SF: We’ve all had to adapt to working differently in the last year or two. What has this looked like for AGCO?
EH: It was a shock to the system. I remember very clearly from one day to the next, we had to convert our whole operation to going virtual. Anybody we could, we sent them home, made our factories all safe, started building some of our own PPE, and figured out how to work with our farmers. We did a lot of new things to connect with them virtually, help them figure out what machine to buy, and support them.
Then, for a period, we were dead in the water. Some of our factories shut down for four to six weeks. All of Europe and all of South America were shut down. That was a very challenging part.
Since then, we’ve come back out of it. We had a pretty solid year in 2020, and now this year is a very strong year. Supply chain challenges continue. They’re very hot and heavy as our No. 1 issue. We expect that will be with us for quite some time.
Overall, I’m super proud of the organization. They rallied together and kept farmers first.
SF: Is there a piece of advice, quote, or nugget of wisdom that has helped you through the unique stress and challenges of the pandemic?
EH: The main thing is getting close to people. We started a video call for our top 150 leaders around the world every week. I would kick that call off. We would tell them any new information or decisions, the new focus areas, then we’d open it up for questions and answers. It was a wide-open, two-way dialogue. Nothing scripted, and we’d stay on the line until all the questions were answered. Then, the next week we’d do it again. We’ve kept that in place. We’ve gone from weekly back down to monthly now, but we’ve kept this two-way dialogue that allows people to know whatever is known. We all can get on the same page. In a big organization where you’ve got a lot of different variables, it’s critical to have the information flowing in, and then flowing out.
The second would be creating an environment of innovation. Right away we said, we’re throwing out the goals. The world has just changed. We’re putting out new goals. One of those things was keeping each other safe. Then right behind that is keep farmers farming. We said, as long as you’re doing number one, figure out any way possible to do number two.
Lots of new tools were created. We created this thing called Above and Beyond, and it was a recognition program where employees could recognize other employees. Once it started, it created this virtuous cycle of energy. The recognition caught fire.
To sum it up, stay close to employees, make sure their priorities are on health and our farmers, and then drive innovation.
SF: I’m hearing about supply chain constraints from everyone. What is AGCO doing to give farmers confidence that the company will have their back in the busy season of harvest when downtime is so costly?
EH: I think we managed through planting, another really critical time frame. Sometimes farmers only have four to 10 days to get their crop in. I think in some situations we’re actually able to get out and have a little bit more contact live now, which is a huge, refreshing step.
We can keep the virtual tools in place, and at the same time start getting more side-by-side feet in the furrow with our farmers.
We’ve really accelerated our remote monitoring as well. That means we can understand what is happening on the machine and be able to tell when we should be warning somebody of an upcoming issue.
We’ve got the remote monitoring, the virtual tools, more feet on the ground, and we’re committed that in these critical times, we’re wanting to be side-by-side with farmers.
SF: Is there anything you learned last planting season, the first busy season of this pandemic, that you’re going to change or do differently as we look ahead to this next busy season?
EH: It was a very planned out activity. We thought about all the virtual tools we can use, and where we could deploy live interactions. I think it’s a new approach this year compared with other years, but it’s a little bit the same recipe that we’re going to use for harvest.
We’ve got harvest going on in Europe right now already. And wheat harvest is underway. Corn will start up later, but we’ve already kind of been in the game with a lot of these things. I think it’s really continuing to use our track record of what’s working right now.
We’ve got custom harvest support trucks out, and extra tools like that, right with the farmers. I just got a note last night from a farmer who is just thrilled over the moon about an issue he ran into, and our guys drove a long way, got him a part, and got him up and running again. There’s all these stories, a little bit in line with that Above and Beyond program, that I think farmers are really appreciating all the things AGCO is doing to keep them running.
SF: There are more and smarter machinery offerings from AGCO for U.S. farmers since we talked in 2019. Help me understand the direction the company is headed.
EH: There are a couple of things. Number one, we’ve come out with a new purpose and vision. Our vision is to be the trusted partner for industry leading smart farming solutions.
If you think of an 80/20, our main focus and main investments are on smart machines. That’s machines that can sense their environment, understand when conditions are changed, make onboard calculations, and maybe be able to go into autopilot where they can adjust themselves. That means a lot fewer skills required by the operator, and the machine does a better job.
The Smart Firmer from Precision Planting, it takes over 2 million measurements an acre and can make over 8,000 adjustments an acre. Farmers are never going to adjust their planter 8,000 times.
Just like auto guidance, once a farmer experiences that, they generally don’t go back because the machine does a better job, it saves inputs, higher yield, and it makes it a lot less complicated task. So that’s where our energy is, on smart machinery development. It’s a stepping-stone toward what’s getting a lot of buzz and talk, autonomy, which is different. Automation is automating a task. You need to do those as stepping-stones before you can pull the operator out of the cab. We’re working on that, too.
You’ll see a little bit of that soon with our robot we call Xaver. It’s a single-row robot that plants one row at a time with a Precision Planting row unit. It’s got guidance on it, and machine-to-machine communication. It works in coordination with other machines. There will be six of them in a field. They all know where each other has planted. When they run out, they go back to the tender truck, refill, and come back to the field.
We’re developing autonomy in conjunction with automating tasks. We think autonomy is further out and more reserved for certain applications, whereas automating a task is applying for almost all farmers. That’s how we view the smart machine development. It’s a big deal for us. Precision Planting is the most successful ag tech company in the world. They continue to come out with new innovations. We’re broadening them beyond planting into other parts of the crop cycle. We’re developing these tech hubs all around the company.
SF: Trade shows and field demos are starting to happen again, and people are excited to connect in person. If you could sit down and have a cup of coffee with a farmer right now, what would you say?
EH: We’ve all been a little more isolated in the last year and a half. When I’m around a farmer, I like to listen more than talk. I would ask them, what is going on on your farm? What are your biggest pain points? What is complicated for you? What are you struggling with? I’m trying to absorb what’s going on with their machinery, what’s going on with their data, people, inputs – because we can influence those either directly or indirectly in a lot of ways.
After that, I’d tell them there are a few bright signals out of this. COVID showed the consumer how fragile the global food supply chain is. They went to the grocery stores and not everything was there. I think we can take heart in that the standing of a farmer went up. Consumers’ realization of the complexity farmers deal with, the risks they manage, the challenges they face are all more clear now. I think that’s a good thing.
We intend to be the most farmer-focused company in the industry, and I would tell farmers that. We’re doing a lot of farmer panels, even virtual now, where we hear directly from farmers about what’s going on for them and their challenges.
I’d also talk to them about sustainability. Our purpose statement is farmer-focused solutions to sustainably feed our world. We put sustainability right in there because we think agriculture has a role that very few other industries can play. That is to help solve the problem. In addition to minimizing the footprint of our factories and our equipment, we can help solve the problem with carbon sequestration practices, farming practices, and sensors. We’re investing in that. We’re at 42% renewable energy through our facilities. Our target is to get that to over 60% within the next five years. Sustainability is a big thing that we think we can make an impact in internally, but also through the whole farming community.