Expert Says Fonterra Backing Current Strategy With New CEO Appointment
The appointment of Richard Allen as Fonterra's new chief executive signals execution, not strategy, according to agribusiness expert Dr Nic Lees.
This month, Fonterra marks the one-year anniversary of TIAKI – our sustainable dairying programme that helps farmers make their operations more environmentally compliant.
In doing so we will also celebrate more than 1,000 Fonterra farmers who now have a tailored improvement plan to help address environmental risks on-farm.
Achieving this wasn’t easy and while a significant amount of progress was made pre-Tiaki it often felt like we were trying push a rock uphill. We knew there had to be a better way.
Let me back up. It wasn’t that long ago that we had a programme called “Supply Fonterra”. As the name suggests, it was essentially a “to-do” list for farmers if they wanted to supply Fonterra.
While the programme was intended to help farmers become more sustainable on-farm, and it did achieve a great deal, it came across more like a parent telling their kid to clean up their room.
While farmers made good progress between 2012 and 2016, environmental expectations were also increasing at an exponential rate. We were adamant not to lose the momentum or progress made by our farmers in this time. Our approach had to change.
We needed to listen. We asked our farmers what it was that they wanted? How did they want to be treated and perceived, not just by management but by the public and their communities? What help did they need to farm more sustainably? We also asked our farmer-facing employees what they needed to become stronger champions of sustainability.
It was quickly apparent that the co-op’s management, farmers and employees had similar motivations and goals.
We all wanted to produce and sell high quality milk that got the best return for our farmers. We wanted to meet the expectations of our customers and the New Zealand public. Without a doubt, we wanted to ensure a future for the dairy industry so it could be a viable option for future generations of farmers.
And like anyone, we wanted to be proud and respected for the work we did. We needed to change our approach in three ways.
We focused on our shared goal. We threw out the name “Supply Fonterra” and called the new programme TIAKI - a Maori word meaning to look after, to guard, to care for, keep and nurture. While the name change was minor in the grand scheme of things, it underlined the purpose of the programme and put the shared goals of the Co-op’s management, farmers and employees at the heart of the programme.
Next, we changed the way we communicated with our farmers about sustainability. Instead of focusing on the “what”, we started with the “why”. We explained that by farming sustainably we could make sure future generations of New Zealand dairy farmers could do the same. We could use evidence of the good work being done on farm to demonstrate to our neighbours, country and customers that we are all committed to doing the right thing by the environment. The resulting compliance data supports Fonterra’s Trusted Goodness brand that is estimated to deliver $15 million back to the co-op this year. By approaching it this way, we could start a two-way conversation based on our shared goals and motivations.
We changed the way we worked with our farmers to improve sustainability. We increased the number of our Sustainable Dairying Advisors who provide their knowledge, expertise, and services to help farmers stay ahead of regulatory requirements and rising expectations. No longer is it a “to-do” list – but instead it’s a “we-do” list. We help farmers see how best practice can boost their bottom line through lower fertiliser costs, greater milk production or better pasture management. We tailor our services to fit our farmers’ needs, recognising that every farm, budget and region is different.
It was by changing our approach in these three ways that we have been able to have a more positive, focused and motivating conversation about sustainability with our farmers. And this is the first step to long-term, wide-spread, sustainable improvement.
• Charlotte Rutherford is Fonterra’s General Manager of Sustainable Dairying
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