It may well be one of the most challenging jobs in a seed company; managing the products (plant varieties) that you put out in the market. When do we promote a variety? Where do we focus our R&D efforts? How will it affect my market position? Often these questions are asked; and answered, during product management sessions based on partial information and intuition. With ever growing competition and the availability of more market related information companies ask themselves how they can improve this process of product introduction. And also, how can we manage this process.
What is plant variety management?
Plant variety management is typically organized around 3 main areas of expertise in a seed company; production, sales and R&D. The job of a product manager is to create an optimal effort of the three departments. Important tasks are:
- Identify potential in the market
- Identify potential technology
- Match sales with demand and production
- Feed R&D with market information
- In the end, Product Management is typically responsible for the end result.
Segmentation adds to the complexity
To effectively carry an interesting portfolio of plant varieties, most seed companies define so called market segments. This helps them to put focus on specific areas and helps to connect to specific areas that R&D in working on. The given Tomato example in figure 2 simplifies a typical segmentation in a vegetable seed company. For every market (for example Sauces) one or multiple products can be identified; the so called Product Market Combination (PMC). Typically, this segmentation also include regions to account for variation in culture and climate.
This means a typical product manager is working on a long list of varieties that are included in one or multiple PMC’s. How do you make sure product management is keeping focus and is not overlooking the overall opportunities? What would be a structure to allow for this process to be managed properly?
Structures to support product introduction
The current trend in many industries nowadays is working in small, committed teams. This “project- or subject based” organization tends to be agile in their setup. The struggle often is how to define those teams. PMC’s tend to become smaller and smaller, in some industries to the point where 1 variety is developed for 1 exclusive customer. In management terms it is considered good practice to divide work based on the aspects of greatest variation. In seed companies this typically leads to segmenting on a functional basis, for example “production” and “R&D”. The day to day activities differ on a functional level. However, when you would assess the total process flow of a product from initiation until its sale, there are of course processes in which the departments are both involved (or even more departments).
To account for this, companies introduce coordination mechanisms. A “product introduction meeting” is an example, during which topics are discussed that touch both the production, sales as well as the R&D department. The goal of this meeting is to align processes between the departments. This organizational design strives to optimize the processes between production, sales and R&D as much as possible. By drawing a boundary around the department, people tend to be more able to focus at their work and optimize the internal process. The question then is however, does this enable you to manage the processes that do cross the boundary you introduced.
Hug your customer
The current trend for seed companies shows an increased attention for the customer. The definition of a customer varies; but is mostly the retail, and with them the consumers, that get an increased voice in the process of R&D. This “customer intimacy” approach tends to conflict with the above described functional division of work. The functional division is driven by more internal factors such as efficiency and quality; not so much by specific customer demands. This leads companies to a situation where they are willing to compromise on factors like efficiency within production or R&D if it would enable them to better satisfy their customer.
Break the walls
One approach to become more customer intimate and allow products to be created more smoothly throughout the organization is to introduce multidisciplinary teams. In an ideal situation working with people from different departments will easy the process steps that involve more than one department. The team needs to consist of people that represent every step in the process. When traditional, line oriented, companies introduce multidisciplinary teams, they tend to struggle with topics like responsibility and accountability. When a sales person sees an issue within the R&D phase, is he able and willing to step up and tackle the problem? Or will he sit back and think this is not his (primary) responsibility.
This example shows that not employees but also management needs to rethink their way of working. When spring comes and production work peaks, what will the production team member do? Will he keep on working on the new to be developed tomato variety of will he get back in production to help get the seeds shipped? And how is he being held accountable for the choice he makes?
Share people and information
Figure 4 shows the process of variety development that is common in most seed companies in a nutshell. Within this simple scheme almost every department in a seed company is involved.
This process repeats itself over and over. When the new variety has been developed, it enters the next phase of product management. One could draw a similar figure for the process of introducing a variety in the market. The input tends to be a bit more strategic; it often raises questions like when do we introduce, or what is a good mix of new variety introduction. For every company the situation will be different; however what remains of the utmost importance is the availability of reliable information.
In every process there are key information components that influence decision making. A good example is the segmenting of crops. Typically, marketing creates other (more market oriented) product segments. For example tomato’s for the fresh market in northern Italy. Because this region has very specific needs, they defined a separate PMC.
Within R&D however they tend to work with more a botanical segmentation. This example might fall into the “fresh market tomato – Mediterranean region”. When it comes assessing the need for new varieties for the PMC in northern Italy; the team has to translate between the two different information sources. What is their basis for decision making? This underlines the need for a shared information platform that supplies information that is comparable between the different departments to support decision making. That enables management to discuss based on facts, rather than intuition and hidden information to ultimately improve the process of product introduction.
About Evert Keuken
Evert Keuken MSc is a senior consultant in the seed industry. He works for Agri Information Partners where he advises seed companies on challenges around information management and organizational design.
