FROM TRACTOR MAKERS TO LIBRARIES, SMART ORGANIZATIONS ARE TURNING DIGITAL THREATS INTO OPPORTUNITY
ohn Deere’s digital technology lab in San Francisco sometimes raises eyebrows.
“There’s a Wework space not too far away, so startup people walk by our of ce and say, ‘Hey, what’s John Deere doing here?’” said John Stone, senior vice president of Deere’s Intelligent Solutions Group.
Now and then, someone pops in looking to buy a tractor.
Set amid tech companies like Linkedin and Salesforce is exactly where Deere wants to be. Countless companies, large and small, have been blown to bits because they underestimated the impact of digital disruption, the changes in
Jcustomer expectations it has created and the unexpected competition it can bring. The 181-year-old tractor maker has turned to software, connected sensors, machine vision and deep learning so it can keep delivering value to the farm customers it serves.
“We opened that of ce out there to get ourselves plugged into the startup tech scene,” Stone said. After it opened in San Francisco, Deere acquired Silicon Valley machine-vision startup Blue River Technology. Its “see and spray” system uses cameras and AI to let machines in the eld recognize and target individual weeds with herbicides, instead of spraying a whole eld. It can reduce use of chemicals by 80 percent or more. Stone feels he has a strong pitch to machinelearning engineers who want to make a difference: “You can apply your expertise to building a better spam lter, or you can apply your expertise to reducing herbicides in farms. It’s pretty compelling, I think.”
There’s no paint-by-numbers playbook for mastering digital disruption, but there are solid guidelines. A rst step is to understand your core value to customers — and strengthen it using emerging technologies. It may be a product line or service. Often it’s about a relationship, a trusted brand.
“My group is supposed to push boundaries. We’re supposed to identify and invest in leading-edge technologies,” Stone said. “But the value is still connected to the machine that turns the soil, plants the seed, cares for that crop as it grows, and harvests that crop and turns it into income for the farmer.”
Then it’s about attacking yourself as others would. “Look at the landscape for startups that are encroaching into your space. Think about how you might create a partnership or move to acquire them. Smart organizations launch incubated teams and/or services that could cannibalize their own status quo business,” said Steve Hill, global head of innovation for KPMG LLP. “These startup efforts may in fact shine a light on a lifeboat for the future.”
Across the country in Princeton, New Jersey, leaders of the public library saw users’ needs shifting dramatically in the early 2000s.the World Wide Web was rendering reference books obsolete. Did people even need libraries?
“We said, ‘Let’s kind of explode the whole concept of what a library is,’” said Leslie Burger, who was library director during the reboot. The library rebuilt itself as a community space and “lifelong learning partner” for families. A oor was turned into a coworking space, where freelancers can reserve conference rooms and use of ce equipment, with gigabit internet access. There’s a café, a usedbooks store and multiple daily events, from lms to classes.
“I think it’s about paying attention to your customers,” Burger said. “That’s as true for a library as it is for a technology company or a retailer. How to position your organization to be an integral part of the lives of the people you want to serve.”
Sometimes you need to dive into a digital remake, not just dip a toe. “A toe in the water allows you to test and pivot and iterate, but you may not have time for that,” said Fiona Grandi, national leader for strategic investments at KPMG LLP. “Organizations should create environments that reward ‘successful failure,’ where new ideas are explored and developed, including rede ning “ROI” in innovation terms.”
Brett Bon eld, executive director at the Princeton Public Library, agrees: “You should constantly be trying things and have an appetite for failing. If every single thing we do is working, we’re not trying hard enough.”
Deere has a long history of disrupting itself. The company is celebrating the 100th anniversary of making its plows obsolete by adopting internal combustion engines. “Today, that means sensors and software and data,” Stone said.
Every one of Deere’s large agricultural machines leaves the factory today with a 4G LTE modem to connect to other machines, the cloud and mobile devices. Vehicles have in-cab touch-screen displays and Gps-based auto-steering systems. Farmers can access data about their crops and equipment at MyjohnDeere.com, and the company has built a digital application platform with 90 software partners.
“We’ve got computer-vision systems now, internally developed, on basically all of our large ag equipment,” Stone said. “It’s on tractors, on our sprayers, on our harvesters. These vision systems have deep neural nets underneath them. That is de nitely the future of our equipment. I think machine learning is going to be as core to John Deere as the diesel engine.”
weekends, Courtemanche found progress on the house moving at a glacial pace. So he did what he knew best and coded his own program to keep track.
By 2004 Courtemanche had signed up contractors for Hollywood stars like Eddie Murphy, Ben Stiller and Barbra Streisand to monitor their home renovations with Procore. Courtemanche spoke the language of construction uently. Growing up in the a uent La Jolla area of San Diego, Courtemanche was an indi erent student, more interested in girls than schoolwork. But construction was another story. A er school he’d sweep out the oors of a cabinet shop, and by 17 he’d become a journeyman carpenter a er completing a 6-month apprenticeship.
A disastrous year at the University of Arizona, where he unked out with a 0.3 GPA, led to a security guard job and then community college, where Courtemanche got the grades to be accepted into a premed program in San Francisco. Once north, he got caught up in the construction boom of the early 1990s, “swinging a hammer” for two years. Feeling burned out, he took up a family friend’s o er to learn the telephony so ware business, then taught himself HTML. By 1993 he was a so - ware engineer; by 1996 he’d founded a tech consultancy.
When Courtemanche built the prototype for Procore
ve years later, he was shocked. Construction made up nearly 10% of America’s economy, but even as late as 2002 its workers barely used the internet. “Holy crap, I’ve been given a time machine,” he thought.
For a edgling so ware business, Santa Barbara was no San Francisco. But what it did have was plenty of well-heeled refugees from the Bay Area and Los Angeles looking for a quieter life. One investor, Steve Zahm, who had founded and then sold the e-learning company Digital ink for $120 million, joined Procore as president in 2004 (a role he still holds today). A bigger sh, DoubleClick cofounder Kevin O’connor, wrote Procore’s rst institutional check, leading a $950,000 seed round and joining the startup’s board.
Procore grew, but more modestly than hoped. ere’s a saying in investing: If you’re early, you’re just as good as wrong—and Procore was very early. In 2006, four years a er Procore was found-
“HOLY CRAP, I’VE BEEN GIVEN A TIME MACHINE.”