Founder of the Happy Cow Milk Company, Glen Herud is developing a business model that allows small farmers to process their own milk for local customers.
The old executives are gone, and some even older executives got promoted. Farmers fired some of the directors and re-elected some other, old directors again. They also made an old director the new chairman.
The problem with Fonterra is they only employ the best, most intelligent, educated and competent people.
These people are high achievers and they are used to being successful.
You don’t see Fonterra executives in the wild very often. Occasionally we get a glimpse of one doing a radio or television interview.
Looking at them, it’s like there’s someone holding a gun against their back. About to pull the trigger if the executive makes a wrong move or worse, an admission they may have made a bad decision once in their unblemished lives.
Each word is carefully considered, just the right amount of professionalism and corporate speak. All the time making sure they don’t actually say anything, to ensure they won’t say something wrong.
Being wrong to these types of people is a very bad thing indeed.
These high-achieving people tend to succeed in life because they are so damn talented.
They just do things better than the rest of us.
It’s great to have these people on your team, but too many have some downsides. Intelligent and competent people are used to being right and being right has always worked for them.
The problem with being right is it also means your mind is closed. You’re not open to new ideas if you believe you are right.
Being right is based upon knowledge and experience. Knowledge is drawn from the past which makes it easily provable and safe.
Experience is built from the solutions that were used to solve the problems of the past.
The problem with people who have experience is they rely on it. They overrate its relevance.
They try to shoehorn the solutions of the past into solving the problems of the future.
Knowledge and experience are technically out of date.
Of course, knowledge and experience are valuable and critical to success. But we should be aware that knowledge is the opposite of originality, and experience is the opposite of creativity.
If you’re scoring 10 on knowledge and experience, that leaves no room for originality and creativity.
Fonterra employs an army of PR agents to communicate to the public and even their own farmers.
Being right is very important to these people, they need to control the message so nothing can go wrong.
But if you don’t mind being wrong, suddenly anything is possible.
You don’t need to be infallible anymore. You can just tell the truth. In this environment, there are so many more options, so many more possibilities.
Of course, there’s no way of knowing what’s going to happen. Things could get wild really quickly. But there’s a good chance something amazing will happen, too.
This is where smart, competent people come in handy. They create order from the chaos and make it all work, which makes them tolerable.
Anything that is amazing, new, fresh and exciting is still hidden from view. These things haven’t been discovered yet.
The discovery of amazing things requires originality and creativity to uncover them. It also requires that you must be wrong more than you are right. It’s risky being wrong. Many people avoid risk at all costs.
People who won’t take risks are trying to preserve what they have.
Fonterra is owned by 10,000 risk-averse dairy farmers.The last thing they want is “wild”, “new” and “amazing”. They’re trying to preserve their land, their wealth, their way of doing things and their way of life.
Fonterra HQ is filled with high achievers all preserving their careers, high pay packets and self-worth.
These stakeholders have a lot to lose and people with a lot to lose don’t take risks.
The irony is, this aversion to risk is likely to be the riskiest approach to take in today’s world.
Successful inter-generational companies are not afraid to reinvent themselves, even when it means cannibalising their existing business.
Kodak and Fuji Film were two identical companies who approached the future differently. Only one exists today.
The least risky thing to do is to let go of the past and the old ways of doing things and embrace the freshness of the new world.
Dairy has a big part to play, it just has to be done differently.
Fonterra should start hiring some people who are going to cause a ruckus.
Glen Herud is founder of Happy Cow Milk Company.