The Lexus and the Olive Tree - Tire Review Magazine

The Lexus and the Olive Tree

I’m 27 years old and I’ve never lived in a world without the Internet. I got my first cell phone when I was 12 years old and I joined Facebook back when you had to have a college email address just to sign up. I promptly gave up Facebook in favor of Twitter when my parents finally figured out how to use Facebook.

I was born in 1987, which makes me a proud member of the Millennial Generation. You know, that generation of lazy, over-privileged, under-appreciative and technology-addicted kids who are probably going to ruin this country. But this isn’t about all of the over-privileged 20-something’s out there.

I graduated from Ohio University in June 2009 and immediately entered the second worse job market for college grads since the Great Depression. It was then that I realized just how unimportant and under-qualified I really was.

I was one of the lucky few who walked from a commencement ceremony on a Saturday to my first real job on the following Monday at the Akron-based tire manufacturing company I’d wanted to work for since I was 12 years old.

Change slaps you in the face. It’s frightening and unfamiliar and it keeps me up at night. My hair is going gray and I haven’t even had my 30th birthday yet.

Change is something we all face in our lives, and while it can be scary it’s also necessary. It can even be wonderful. Our world moves at the speed of change and that’s not going to slow down – ever.

Based on industry statistics, there is an above average chance that you and I grew up in different worlds. The only difference, though, is that I didn’t experience the same change as you, but we are experiencing today’s change together.

In 1999, Thomas Friedman wrote The Lexus and the Olive Tree, triumphantly proclaiming that the world was 10 years old. What Friedman was really saying is that the Industrial Revolution was over. It had brought some truly incredible innovations to the world and firmly established the U.S. as a global economic powerhouse, but it was over and done.

From the day the Berlin Wall came crashing down, there arrived a brand new era of total globalization, unprecedented wealth, and perhaps most notably, a period of unparalleled change.

None of us is immune to it now. As sure as the sky is blue, the rate of change will continue to increase.

Consider Buckminster Fuller’s observation that until 1900 human knowledge doubled approximately every century. By 1945, knowledge was doubling every 25 years, and today our knowledge level doubles about every 13 months. IBM suggests that the “Internet of things” will lead to human knowledge doubling every 12 hours.

Massive change twice a day, every day, until the next exponential iteration.

We have reached the point where those who fail to evolve and adapt risk following the Industrial Revolution into oblivion.

The farm tire segment of the tire industry has seen some impressive incremental innovations over the past 20 years or so. More recently, we’ve seen manufacturers like Bridgestone, Titan, Michelin and BKT experimenting with new compounds and materials to fight back against stubble damage.

We’ve seen IF and VF and LSW technology. In other areas of the industry, we’re starting to hear more about nanotechnology and the importance of compounding.

Change spares no one and no industry. I believe that today there are five key drivers of change staring down farm tire dealers. Each threatens to send us to an early retirement and together, but with proper planning, embracing change as a process, and viewing each step in the continuous improvement journey as an investment in ourselves and our futures, we can tame this five-headed beast.


Consolidation in the field has resulted in increasing demands for high-horsepower equipment. Steel-like stubble is pushing the innovation needle faster than ever. Larger and more powerful equipment creates new training and safety challenges for our people. Drone and mobile technologies are making precision farming more accessible and more effective for more farmers. All of these changes are aimed at improving yields and maximizing efficiency.

Sound like something out of a sci-fi movie? Get ready because these changes are already here. And that’s not to mention the next generation workforce you’ll depend upon to capitalize on these changes. Still think those 20-something kids are over-privileged and entitled? Guess what? You need them a heck of a lot more than they need you. It’s time to invest in your workforce. Provide continuous training, invest in your equipment, and engage your Millennial workforce. You can’t afford not to and investing in your people will always pay the best dividends.

As farmer demands, equipment requirements and new technology continue to flow into the farm tire industry, educating and training your people and your customers has and will continue to become increasingly important.

Digital Marketing

Maybe you’re one of the lucky few who can open your front door in the morning, close up shop in the evening, and your customers simply show up. If you’re not in that rare group, you have to work a little harder to earn your customers’ business.

Are you happy with your current mix of customers? If not, it’s time to work a little smarter to be where your customers are. And although there’s probably still a place for radio advertising in your marketing strategy, your best ROI now and until they invent something better will come in the digital arena.

One of the greatest results of the information revolution is how simple, inexpensive and effective digital marketing has become. Online tools like Google AdWords, Facebook for Business, and Google Analytics make it simpler and easier than ever to precision-target the right customers for you.

If you think digital marketing is just for retail tire dealers, think again. Farmers are probably far more technologically savvy compared to consumers. And they deal with it at a high level; that’s their livelihood. It makes sense that they are also the most connected, and the most apt to react to a digital approach.

Equipment Innovation

Ag tires are becoming much more application-specific and you can bank on that trend not going away anytime soon. Bigger and more powerful equipment will continue to bring new tire technology. Are your people crystal clear on proper repair procedures and protocols for IF and VF tires? Is your team knowledgeable enough to make proper tire recommendations that will help your customers produce more and faster? And to keep up with swift change?

As that equipment continues to get bigger and more powerful and more expensive, down time becomes even more of a headache. Down time may not kill anyone, but it sure puts a beating on your customers’ bottom line.

Environmental Impacts

Before anyone starts tossing out the tree hugging jokes, let’s consider the facts. California’s 80,500 farms account 15% of national cash farm receipts and 7.1% of the livestock in the U.S., according to the California Department of Food & Agriculture.

Nearly 60% of the entire state of California is currently considered to be under a D4 drought, which is the most intense drought category and the water year 2014 (which ended Sept. 30) was the third driest in the past 119 years.

And we’re only talking about one state. Other regions in the U.S. are also experiencing drought conditions.

Set aside any opinions you may have about global warming and you start to see the grim picture. Changing weather patterns aren’t some fictional crisis or some political ploy from Washington. It is very real and it’s not going away.

Market Challenges

Like the consumer tire segment, look out for SKU proliferation to become more and more of a challenge. Driven by new and increasing OEM demands and application-specific products, stocking the right products in the right places at the right times will continue to be difficult.

My suggestion is to find a buddy at one or two of your favorite tire distributors and let them know what you need help with. You may be surprised to find that a little loyalty goes a long way with those guys and they really can help you get the right stuff so you can take care of your farmers.
Look for tire pricing to continue being a challenge. Just-in-time raw materials sourcing, global supply interruptions and geopolitical conflicts (among other factors) make a mess of forecasting for manufacturers, distributors and bolt-on locations, alike.

“We’re seeing some pricing volatility in 2014 and we expect that to continue into 2015,” said Mark Knippen, vice president of purchasing for Ohio-based tire distributor K&M Tire. “Prices have generally trended downward across the board all year due in part to demand that was pretty flat this year.”

There’s something to be said about having the tires and brands your customers are asking for, but nobody can be everything to everyone. Picking your brands and, more importantly, your partners, and then building those relationships can help to mitigate some inherent risks.
Change will keep us all up at night. But with a little planning and the mindset that each and every day is an investment into your business and your people, you’ll be well on your way to embracing change in the age of information.

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