Setting Bold Goals and Achieving Them with Eric Hansotia

There you can't stretch to the moon on every topic. So, there's an element of focus first. Team any business to ultimately be able to go fast. Where are we heading in the big picture? People are running in all different directions fast and the company doesn't move fast. As you get more responsibility, maybe take over a team, or you get in a larger organization. Hopefully you learn and you start practicing more and more of it. You're actually going to get better results, faster results, a more excited team if you can bring them along through questions and not being the problem solver yourself on everything. And so, try and organize yourselves where you're really focusing your personal time to be there fully, be fully present for the crystal moments.

Well, it's so great to be here with you, Nicole. I just love talking about agriculture and leadership and what we can all do to make it better.

Well, I mean, for this audience, it's maybe relevant to say I grew up working on a dairy farm in central Wisconsin, was in 4-H and FFA and kind of jumped into every kind of little competition I could with showing cattle and raising chickens and sheep and doing all kinds of projects. And it was a great way to learn a lot about agriculture, but it's a great way to learn a lot about leadership. And so I think that's probably a common background to many of your listeners. And then spent the rest of my time in the ag equipment business. And more and more it's morphing from ag equipment to ag technology. And so that's what I love. I love understanding farmers' problems and finding intersecting innovation to help them find that, whether it's on the product or with data or with changing how we do business. So that's kind of what makes me tick.

No, not at all. Not even close to that. In fact, you know, for many years I thought I was going to pursue being a farmer. And I was taking classes, you know, in high school and ended up being fairly heavy in math and sciences and so on. And my guidance counselor suggested, 'Well, why don't you get a degree in engineering?' And I was planning to go to college anyway and I thought, 'Yeah, I'll do that.' And that really I fell in love with engineering. The problem-solving nature of the tools, the innovation it brought. And so, that really lit my fuse and, you know, I pursued an engineering direction. I was engineering in the beginning of my career and then grew into a business leadership, but you still use a lot of those same tools. You use a lot about understanding how a farm operates and what's important to a farmer and you use a lot about the engineering principles of solving problems and how things work. So, that's kind of how I got here. But, I didn't have any aspiration of being CEO. It was just kind of like, I want to do a really good job at what I'm doing and try and create a little bit of excellence here and then that led to one thing after another and threw myself into new opportunities. Kind of restarted again. Did one thing for a little while and then would try something very different within the same company and built a broad base and one thing led to another and ultimately, I had the opportunity to have this wonderful job, which is to me my favorite job in the world. I wouldn't trade it for anything.

Yeah, absolutely. So, one of the things I tell maybe people earlier in their career is, you know, there's a I think a false advice that sometimes schools give younger employees or students and that is to kind of map out their career path. And I tell them, absolutely don't do that. Do the opposite. Instead of trying to look forward, 'I want this job and then that job and then that job and that's what I want to do.' Look at the job you're in and say, how can I generate excellence in this? If I'm in finance, how do I close the books 3 days faster? If I'm in quality, how do I cut my quality issues in half? If I'm in engineering, how do I design something that's not been designed before? Create excellence in whatever you're doing. And everybody can in one way or another. And then throw yourself into something new. Move from one kind of activity to another. Build a set of experiences and build a set of skills. And then create excellence in that second one. And if you do that time after time, then pretty much you get a reputation of that and people say, 'Well, we want that person to take on more and more responsibility.' And opportunities open up. It's a much better way to grow yourself and to build a team around you than to try and map your career. In fact, there's a quote that is on a plaque that I still have in my office that I got from my roommate, my best friend when I was going to college. And it says, 'Excellence is a result of caring more than others think is wise, risking more than others think is safe, dreaming more than others think is practical, and expecting more than others think is possible.' And I've tried to live that way and I've tried to lead that way. I think it's, you know, it's been something that's resonated for me and hopefully it'll spark something for others as well.

Yes.

I would say yes. I mean, when I look back to my days in 4-H or my days in FFA or sports or other things, you know, I always looked to do a couple things. And I didn't think about it at that time, but when I look back on it, there's an element of leadership of when there's a group standing around or trying to figure out what to do, I tried to rally the crew and gather up the ideas and establish a path forward. And so, I think there was an element of leadership that was a bit natural there, but it groomed over time through those organizations. I think they do a great job of putting you in situations, public speaking, all kinds of different skill-building activities to build your confidence and build your skill sets. So, yeah, I think I've always had ambition, but I'm happy. I think that as I look back, I tried to channel that ambition into what was right in front of me and not kind of look out too far down the road.

Well, I think there's a couple things in your question. You can't stretch to the moon on every topic. So, there's an element of focus first and saying, 'What really matters? What's going to really make a big difference to farmers? What's going to help our company get stronger? What's going to help our team feel more energized with what they're doing?' So, depending on the topic, you say, 'Well, what's the big thing right now?' And on that big thing, let's think big. And so, I really like setting on the most important topic a transformational goal as opposed to an evolving goal. So, a transformational goal most of the team, including myself, often doesn't know exactly how to get there. So, it's a big stretch, and what I like to use is something called right-to-left thinking instead of left-to-right. So, a traditional evolving goal will be left-to-right. Now, the reason I say that is people read left-to-right. They read one word and then the next word and the next word. So, it's kind of a natural evolution of where I've come from. So, that's left-to-right. But, right-to-left means I need to jump out into the future. Maybe it's a year away, maybe it's 3 years away, and say, 'What does the world look like that we're setting our aspiration to achieve out there?' We say, 'Is that exciting?' Yes, that's an exciting place. Great. Now, if we get everybody rallied around that spot, and like, 'Now, let's work our way back from that spot to today and figure out how to put the actions in place to get there.' So, that's right to left. Jump out into the future, have no idea how to get there first, but getting excited about that outcome, and then building the plan to achieve it. Recognizing that you may not have every, you know, there's a river to cross. You may not have every stone defined to get across the river. But, if you get enough of them, you can say, 'Well, let's get going, and we'll figure the rest of them out on the way.' So, it's having some stretch remaining, and not having everything predefined is reality in today's world, because it's largely about speed. You know, I'm a big believer that speed beats slow, not big beats small, or small beats big. I think it's all about speed. And so, setting big aspirational goals, quickly getting a team around it, and then quickly making progress toward that goal is, you know, some of the keys to success.

So, AGCO can have a few, a small number of them. Any given group probably can only have one, maximum two. But generally one. Focus is so critical. So, to go fast, and to really get everybody focused and aligned and marching together, you know, having one primary goal for that group is best. But now, everybody doesn't do the same thing in a big company. And so, you could have the product development group trying to set a stretch goal and a breakthrough improvement on that side. And then the customer acquisition group maybe doing something different and stretching themselves in that direction. So, you can manage a few of them at the beginning of the year, you know, if I get tactical about it, I create a little table and I say, you know, we're all the one goal is always about people. So, we all share that. I'm talking about for my senior leadership team where we start. One goal is about people. And then, one goal is about business results. So, those two are standard every time. And then you have two or three columns for transformation. Now, it could be that you're finishing up the last one and you're starting the next one or you're supporting someone else. So, you don't always fill all three boxes in. But there's three spots there. And then what I like to do is look for linkage where the engineering group maybe needing to support the purchasing group in redesigning for a new supply base or something like that. So, I get that matrix and the whole team builds that together just before the beginning of the year. And then we use that to cascade through the organization and say, 'Everybody's goals should feed up to these.' So, what that tells you is it's got to be a forced focus. It forces a real concentration on the things that really matter the most right now.

Well, there's a few elements I would suggest that you need to have in place on any team, any business to ultimately be able to go fast. And it creates some homework up front. So, first of all, you all have to agree where are we heading in the big picture? What is our aspiration? So, some people call it a purpose. Then in a shorter term, that's the purpose of the company for multi-years, then the goals for that year. So, you got to define the destination and work on getting everybody rallied around that. It's like we understand what it looks like, we understand how it's different than today, we understand how we're going to measure it, we understand some of the elements on how to get there. So, spending time getting everybody clear on that is super important. Because if they know where to head and then they know somewhat of guardrails about where they can run, then the decisions can happen as close to the front line as possible, as close to the farmer, as close to our production workers, as close to our suppliers. That's where all the detail is and things are happening real time and you want it to be able to push as many of the decisions to those front line folks so that you can be fast. And in order to do that, you just got to have everybody clear. If you have no plan and no direction, then people are running in all different directions fast. And the company doesn't move fast because it's like everybody rowing in a different direction in a boat. That doesn't work very well. The boat won't move fast no matter how fast you're paddling if we're all paddling in the same direction. Getting everybody focused on a direction I think is really key. Getting them clear on decision rates, things like that, getting them clear on their guardrails. You know, I have a saying that I like to use in the company that says success equals P times A. Now, what I'll unpack that means is the success of any transformation or change effort is the product of how strong is the plan, that's P, let's give ourselves a score of 1 to 10, multiplied by how strong is the A, the acceptance of the organization, the acceptance of the group. And more often than not, when I see change efforts fail, it's not because we had a bad plan. People come up with a great idea. Maybe they've enrolled a lot of people around them, but they didn't enroll the people who are going to be impacted, the acceptance of those going through the change. And so the A is the soft underbelly of the failed outcome. And so that's where, you know, I talked about getting clear on where we're going, it's also getting people enrolled and accepting of the change process, of where we're going and why that's so much better than where we're coming from. So success equals P times A is something I use all the time. Hardly a few weeks go by without me using that in a meeting somewhere to get people focused on where to apply their energy.

Yeah, I look, you know, all the way along I was, you know, you look at the individual contributor roles I had originally which many folks on this call perhaps. And then you get involved with project teams and so on. So I was fortunate enough to learn some of these change management toolbox items about how to think about a stakeholder analysis, who needs to get from where they are today to the future place, project charters, you know, disciplined project management, those kinds of toolboxes, facilitation skills. Those core skills I learned early in my career. I'm very lucky to be able to go through some training on those. And it was kind of a process improvement focus at that time. And so based on that, I was able to build those muscles. And I still use those tools today and I still try and help others use those tools. And so it's a tool set that serves you no matter where you end up and what kind of role you have. The skill sets of leading change are fundamental. And so for anybody that is interested in this type of topic, I would encourage them to skill up on those types of things wherever they are in their career.

Yeah, exactly.

Yeah, it's an evolution through one's career. I think it's a combination of as you continue to maybe grow experiences and grow skills, you also have to start letting go. And early in your career, you're rewarded about what questions did I answer? Like, did I have the solution to the problem? And can I solve something? And then as you grow in your career and you start managing teams or getting a little bit larger responsibility, you quickly realize in order to have that success equals P times A, in order to build acceptance, you need to bring a team along through questions as opposed to telling them, 'Well, here's the answer to this and this and this. Now, please go do it.' So, if you change your behavior and work more through questions than solving the problem yourself, you start seeing that teams actually do a great job of being more responsive than you could ever be because they're right there where the information is and being faster. And so, if you can trust that little bit, you see the results, you can say, 'Okay, I need to do more of that.' But it does require letting go.

Yeah, maybe there's two thoughts that come to mind around this topic. One is about building trust in the team around you and in your trust in them. And then the other one is about practicing the different behaviors yourself. So, let's tackle both of those. Let's start with tackling the evolving your own behavior. You know, when you're starting off in your career, you're typically rewarded by being a problem solver, having the answer, knowing the solution yourself. And so, you're like, 'Ooh, nice job, Sally. Nice job, Tom.' And you sometimes get rewarded for that. But then as you get more responsibility, maybe you take over a team, or you get in a larger organization, hopefully you learn and you start practicing more and more that you're actually going to get better results, faster results, a more excited team if you can bring them along through questions and not being the problem solver yourself on everything. If you just tell them, 'Hey, here's the problem solutions to this and this and this. Now, please go do it.' They become just doers of what you told them. And when the world around them changes, they keep going down the path that you told them when really they needed to pivot. Whereas if instead you bring them along through a series of questions, they learn the why. They have gone through the discovery process of arriving on that path. And now they understand the ultimate why. So, if the world changes and the conditions change, they can pivot and take different actions. And if you practice that as you're coming up through the organization or through your career, you start realizing, 'Wow, these are way better outcomes, way faster outcomes, and the team enjoys it a lot more.' So, I would encourage you practice it on the lower impact topics. Practice it frequently. And sometimes you get it right, sometimes you get it wrong, sometimes the team gets it right and wrong. So, you can practice those behaviors and try and fine-tune it so that when that big one comes along that you're referring to, you've already built up the muscle to maybe do it a little bit more skillfully. The second one is about trust. And it's a little bit parallel path that, you know, trust is built through kind of three layers, I think. The first one's benevolence. Like, they need to know that you care about them. Secondly, it's about honesty. They need to know that you're going to do what you said you're going to do. And then, finally, you get to the competence of can I do this well? Can I deliver results? But, you have to build those first two building blocks before you get to the competency. And so, if you can build a climate of trust among your team, along with these kind of adoption of these principles of more questions than giving them the answer. I think then you find that it's a multiplier. That you're getting a lot more decisions made. You're moving at a lot faster pace. And the team is developing and growing around you. I mean, one last thing, the other element is we kind of talked a lot about results and maybe a little bit about trust, too. But, inherent in all of that is what kind of culture are you creating around you? If you are a results person, whether you got there through answers or questions, but you didn't really care about the people around you, you get that reputation. So, then the next time there's a project that comes along, if you're just the results guy or the results gal, nobody really wants to join that team. Whereas, if you're the person who's developing the team around you, helping them understand the why, giving them the autonomy to make decisions, allowing them to go fast, fail sometimes, and help mentor them through that, they're like, 'Wow, I'm a much better leader when I joined his or her team than when I started than at the end than when I started. And I've grown myself. I enjoyed the journey. The next time that project comes up with that leader, I want to be on that team.' And suddenly, you have all the best and the brightest trying to join you. So, there's the element of the tools creating it, but then just the ability to draw great talent is maybe a side benefit that is another multiplier. And if you can string these together, that's what makes you, you know, a more powerful leader than you could ever be on your own.

Maybe a two thoughts there. One would be there's this phrase do what only you can do. And so, there's a number of things I can do or you can do and there's, you know, and I can end up doing and many of my kind enjoy doing. So, you end up going down that. But, if you run through those things with the same different filter and you say, 'What are the ones only I can do?' Now, maybe it's because I have access to different information. I have access to different perspective because I've had discussions with the board or a supplier, whatever it happens to be. Like, I need to make that one because nobody else has been in the intersection of information or whatever. Those are the ones I have to call or they have such an impact to the long-term direction of the company and, you know, that's really my purview as opposed to any of the individual business leaders. So, I try and zero in on spending my time on those things only I can do. Now, that's the primary filter. Then, there's also other things where I'll dive in to a given business area and try and help with a reset, which is a little bit what falls in that same category, do things only you can do. But, there may be a business that's going along fine, but

Then I'll try and step in and say, 'Hey, have we thought about where's our next breakthrough?' And my job is to help lift their eyes instead of kind of looking down at the ground at what's right in front of us. Every now and then figuring out when it's the right time to lift their eyes up and say, 'Where's the next breakthrough? How do we create a whole different outcome for our farmers?' It could be on product, it could be on a distribution strategy, could be how we help them with data and all those things. So, I'd say those are the two primary things. And then the third one is talent. I spend a lot of my time trying to mentor the existing talent and groom the future talent to make sure we've got a pipeline several layers deep with the rest of the leadership team that we're grooming and help giving them different experiences, training, mentoring, teaching, coaching, like people did for me to help them continue to grow.

I'd say probably two things. One is broader and one's more specific. The broader one is setting the culture. So, as a leadership team, we established the culture when we reset the strategy when our team came in. And we focused on three things. We want to be the most farmer-focused company in the industry. And think of everything through the lens of what makes the farmer more profitable, more successful, easier to do their job. Number two is team up. And so, instead of optimizing manufacturing or optimizing Brazil from the Brazil team or the manufacturing team, we want to optimize the company first. And so, working across functions, across geographies to make sure we're optimizing the whole. And then the third one is probably the hardest one. And that's speak up. And essentially we want to be able to raise a challenging topic respectfully and debate respectfully. So you can raise risk ideas, build on someone else's idea, you know, challenge the status quo. All of those types of things. So the mixture of those three is really powerful. Everything with you know, we're all on the same side of the table. We're not on you and me. We're all on the same side of the table trying to serve the farmer. We're trying to do that in a one team so that they don't care about departments, they don't care about functions or business. They just care about what we gave them and how it all works together. And then how do we make sure we keep challenging ourselves? That's the way to be innovative and fast. So setting the culture, constantly reinforcing that, recognizing people when they do it well, mentoring people when they don't have it quite right, is the first category. And then the second one is probably about again getting people clear on the objectives. So we talked about the outcome earlier whether that's in the purpose

or in our annual goals. But I'll maybe bring one more thing. There's a difference between, if you picture the image of there's the game on the field whether that's football or baseball or soccer or whatever and then there's the scoreboard. These are two very different things. In order for the team to do well on the field, they have to understand the scoreboard. So early work on the scoreboard about if we agree on what we're going to get and where we want to go, then how do we keep score? What are we going to measure? What are the competition? What are the incentives around those measures? Because sometimes there's some negative behavior that comes with that. Really thinking about the scoreboard up front. And having a scoreboard discussion. Now, the scoreboard doesn't change what happens on the field. It just enables the team to understand how score is being kept and what they need to do to win. So it's not going to change the game on the field, but it enables the team to go. So, there's a difference between a scoreboard discussion and a team playing discussion. How do you help the team succeed? But, working on the scoreboard up front it provides clarity and provides focus.

Again, it's about focus. So, it's a few number of measures that everybody can remember, and I'd like to be able to walk down the halls and say, 'Hey, Nicole, what are our three big things that are in your area?' You could go bam bam bam. And you say, 'Where are we relative to our goals?' You're like, 'Well, we're here and we need to go there.' Great. Everybody needs to be able to internalize that and remember it. Ideally, it's an integration of various items. So, there should be something for the farmer, something for the employee, something for the investor at the top of the company. But then as you go through it, it's also that way. And then as you get down in the organization, you'd like to have some leading indicators and some lagging indicators. So, sometimes lagging means it already happened, and what was the result? So that may be the financials or our warranty results or something like that. It already happened. What you'd like to do is have some leading indicators to say, 'If we do these things, we're going to get better results.' So, if I work on changing this activity, that will lead to better financials or better quality results or something like that. So, few measures, and then a mixture of leading and lagging.

Yes, exactly. [laughter]

Yeah, I was somebody yesterday. So, it's great timeless principles. So, good to see you.

Very good. I agree. I agree. I think they're timeless.