| Nate Clark ||Largely & Wholeheartedly Innovating a Future |
For the Logging Community
Oregon Logging Conference
Remarks by Nate Clark, Director of Public Affairs
John Deere Construction & Forestry Division and John Deere
February 25, 2010
On behalf of John Deere and Pape Machinery, I would like to thank the Oregon Logging Conference for the privilege of providing this year's keynote address.
I would also like to thank you on a personal level. As part of John Deere's Construction & Forestry Division, I have had the chance to work closely with loggers across the country, including those represented so well by the American Loggers Council. In my collaboration with loggers, I have met tireless workers, devoted family members, insightful business managers, passionate political activists, and good friends. It is these and other qualities — qualities to which we at John Deere and Pape Machinery certainly aspire — that have driven us to serve you in our products, services, and beyond.
For the keynote address today, I will focus on one value that the logging community will need to embrace and promote more than any other as it strives to recover from the economic recession. I believe this value will serve not only as a key to recovery, but also as the catalyst for the logging community's long-term growth and prosperity.
This value is innovation.
Innovation for John Deere means inventing, designing, and developing breakthrough products and services that our customers can use to improve their lives and those of others. At the heart of innovation is a special human element: the ability to see the value of new things or doing things in different ways, and the courage to act on this insight.
The importance of innovation — particularly at times of enormous upheaval — cannot be overstated. Whereas dramatic change often causes us to become protective and risk-averse, it is in the midst of such change that innovation may create the most opportunity and spell the difference between ultimate success and failure.
During John Deere's 173-year history, we have confronted many such moments that have demanded innovation even in the face of uncertainty and dissent. However, none was so critical to John Deere's future as its decision to enter the gasoline tractor engine business in the early 1900s. Despite the fact that today John Deere is recognized worldwide for its "green machines," in the early 1900s this future was not even a glimmer in anyone's eyes.
As companies like J.I. Case and International Harvester began making their own gasoline tractors in the late 1890s and early 1900s, John Deere faced the same dilemma as many other farm equipment manufacturers. Wayne Broehl summarizes this dilemma in his definitive history, John Deere's Company: A History of Deere & Company and Its Times:
"Was the tractor a significant piece of agricultural machinery? Was it destined to be a major new innovation that would be adopted widely? Should an agricultural machinery manufacturer concentrate on supplying the implements that would be pulled by another's tractors, or should he jump into tractor manufacturing, considering it an integral part of the long line?"
These questions had no easy answers, and opinions within John Deere's leadership at the time differed widely. For example, one of John Deere's Directors, Willard Velie, offered a resolution in 1912, stating,
"In view of the inevitable future use by farmers for diverse purposes of gasoline and kerosene tractors ... a movement to produce a tractor plow should be started at once. ..."
However, John Deere's President at the time, William Butterworth, recorded his own impressions that same year regarding John Deere's future in the tractor business, writing simply,
"Drop all tractor expenditures."
Talk about a difference of opinion.
It was not until 1918 that John Deere chose its direction, largely as a result of the vision and persuasion of Willard Velie. While between 1912 and 1918, John Deere explored both partnering with gasoline tractor manufacturers as well as manufacturing its own tractor, it had not meaningfully set its course. In response to this indecisiveness and the perception that John Deere was suffering as a result, Willard Velie wrote an impassioned letter to each of John Deere's other Directors reiterating his earlier 1912 resolution and stating,
"We have produced in the period of five years and ten months about a dozen tractors of various designs. ... Our expenditure in the process has been $250,000. ... Each tractor has cost us about $21,000."
As an interesting aside, $21,000 spent to make one tractor in 1918 could equate to as much as $4 million dollars today depending on how you calculate it. That's one expensive tractor.
Willard Velie went on to say,
"Our position as either tractor or plow manufacturers is not as strong today as when we started. ... The industrial and economic situation known to intelligent observers seems to preclude the necessity of arguing for the horse as against the tractor for plowing and farm operations in the future. I think it is safe to eliminate the horse, the mule, the bull team, and the woman, so far as generally furnishing motive power is concerned. ... I cannot refrain from remarking that we should build tractors largely and wholeheartedly, or dismiss the tractor matter as inconsequential and immaterial. Our present course is prejudicial and impotent."
Thankfully, for John Deere, it chose to build tractors largely and wholeheartedly.
In 1918, John Deere purchased what was then known as the Waterloo Gasoline Engine Company for $2,350,000. After the purchase, Charles Velie, another of Deere's Directors, opined,
"I am more than satisfied we have made the best move Deere & Company has ever made, and that it was an extremely fortunate thing we were able to buy this plant. I believe if we handle this proposition right, the Waterloo Boy will be to the tractor trade what the Ford car is to the automobile trade."
As they say, the rest is history. Because of the innovation represented in this one decision, John Deere became what it is today. And because of the lessons learned from this one decision, Deere invests over $2,000,000 in research and development every day to make sure that it does not miss the next great innovation that will permit us to serve our employees, dealers, customers, and those who depend upon us for the next 173 years.
From this little-known example from John Deere's history, which I am thrilled at the opportunity to share, I believe there are two aspects of innovation that ultimately determine whether an innovation is successful: The nature of the innovation, and the value others see in it.
Against this backdrop, I ask that each of you consider two questions. The first question is this: What do you see as the single most important innovation that will sustain and strengthen the logging community for years to come?
As luck would have it, one source for a possible answer to this question can be found a mere 45-minute drive from us here today in the Willamette National Forest. The H.J. Andrews Experimental Forest established there in 1948, and featured in Jon Luoma's wonderful book, The Hidden Forest: The Biography of an Ecosystem, has helped lead to discoveries regarding the very nature of forests that will ultimately improve forestry and create more opportunities for those who work in them.
One discovery stands out for me. This discovery involves the critical role microorganisms play in maintaining and reinvigorating the living soil of a forest. As Jon Luoma records in his book, immediately after the eruption of Mount St. Helens in 1980, Fred Swanson, one of the scientists from Andrews Experimental Forest, worked with others to investigate the soil deposit pattern created by the blast. What Fred Swanson unearthed, however, was critical evidence of how forests recover, revealed in the faint spider web-like threads of burn-site fungi spreading through the ash. Jon Luoma writes,
"At the time, Swanson didn't know what the threads were. But he would learn. Here in the blast zone, in the most inhospitable environment imaginable, those tiny threads had spread themselves through the ash, the future soil of the mountain. They had spread themselves as a living, under soil web in just the ten days since the eruption. ... Swanson, of course, could not have known that the tiny threads would one day help lead his team to a new way of imagining what a forest can be."
These threads led the team at Andrews Experimental Forest to many discoveries regarding the importance of the invisible world beneath our feet. Organisms in the soil are not only nourished by the trees above them, but they also provide the environment in which trees can again thrive after a disturbance such as Mount St. Helens or timber harvesting. For example, these organisms can help store and regulate nutrients including nitrogen needed by the trees to grow. In addition — and more amazingly — organisms can help certain species of trees share and exchange nutrients to enable their collective success. Countless organisms, materials, and structures that survive after a disturbance serve as what the team from Andrews Experimental Forest calls "biological legacies" that enable forests to recover.
What does the discovery of the importance of diverse microorganisms and other biological legacies mean for the future of logging communities?
On a basic level, it means logging communities that incorporate into their work discoveries regarding how forests recover from disturbances will improve their own chances of success. Healthier forests at every level of the ecosystem mean more opportunities for the logging community.
Already, some in the forestry industry have incorporated these discoveries for their benefit. Some nurseries here in the Northwest introduce fungi into their soil to foster seedling growth and survival. Similarly, some have adopted a host of practices often referred to as "New Forestry" — a term coined by one of its pioneers, Jerry Franklin — to improve profitability by mimicking nature's best practices in forest health and recovery.
It also means loggers who develop the capacity to create and use innovative forestry practices will earn more and be more profitable. These loggers will have a competitive advantage in a market that increasingly demands and pays for such innovation. Innovation will not be limited to forestry practices, but will also include new products for you to harvest, new products for you to use in your work, and new business models for you to employ.
More importantly, it means loggers who develop the capacity to innovate will create their own equivalent of biological legacies — let's call them "economic legacies" — and thereby create an economic environment rich in diverse opportunities that will be necessary to survive future disturbances such as the economic recession that ravages the logging community.
Let's be clear: Economic survival in the logging community has become increasingly tough. According to the United States Bureau of Labor Statistics, in February 2005 there were 66,000 Americans employed in the logging industry. Today, that number is close to 47,000.
The ability for the logging community to be innovative will open up a world of diverse opportunities as we collectively struggle with massive challenges such as economic recovery, energy independence, and climate change. One such opportunity is reflected in the theme of this year's Oregon Logging Conference: Forest Biomass ... Fuel of the Future?Energy from forest biomass holds great promise for Oregon and many other states rich in forest resources. For example, the Oregon Department of Energy presents encouraging statistics about the energy potential from merely the treetops, limbs, and cull material left over from Oregon logging activity: