Define your company
The first thing Richenhagen did was better define what the company should do.
He started by creating a team of less than 10 people to help him
map out the new strategy. The team came from different departments and represented a variety of ages and position levels in the
company. He also avoided a team of yes-men by choosing outspoken and opinionated people.
“It’s important to get all aspects of the problem reflected,”
Richenhagen says. “Maybe it’s black and white, but if you only
talked to the old guys, they would maybe tell you, ‘We need to go
on and have no change.’ The young guys may say, ‘We need to start
a revolution.’ You need to get into a balanced analysis of the problem.”
With a team in place, he next looked at what differentiates his
company.
“A lot of industries or a lot of companies suffer because everybody tries to do exactly the same,” he says. “You have to be different from your competition. You have certain choices. You could
be low cost. You can have other ideas.”
Richenhagen realized that while his company’s products were
about 20 percent more expensive than many of his competitors,
they were more durable and higher quality, so they lasted longer
and had better fuel consumption, so after just a year of ownership,
the extra upfront cost paid for itself.
“You have to benchmark yourself and think about what are your
customers expecting,” he says.
After defining how it would compete, the team then created a
mission and vision to articulate what AGCO wanted to be. But
even after that, Richenhagen chose to sleep on it for a few days.
“After you have discussed everything and everybody has agreed
to a solution, then you still should think over it,” he says. “I think
the vision is something that should be given by the leader of a
company. You have to think about it and think if this is something
you really 100 percent stand for.
“When you read mission statements, often they don’t fit to the
company or they don’t fit to the market. They’re me-too statements everybody had, and if you want something that really fits to
your business, then it needs some reflection.”
After reflecting for a few days, Richenhagen realized that
what the team had come up with was good but too long and complicated.
“What you would like to do is you would like to achieve a situation where you go out in a factory or you go out in a market and
ask your people, ‘By the way, what is our mission?’ and they would
know it immediately,” he says. “If this is not the case, either your
communication failed or it was just too complex or too difficult or
too long.”
With that goal in mind, he shortened the team’s original vision
into, “High-tech solutions for professional farmers feeding the
world,” and the mission into, “Profitable growth through superior
customer service, innovation, quality and commitment.”
Three months from start to finish, he now had principles guiding
AGCO into a new era of organic growth.
