Crisp Up Communications to Strengthen Reputation During AgTech’s Reset
There is no question: there has never been a greater need for investments in agriculture technology. Yet predictions of a ‘reset’ are becoming reality as investors raise the bar – and even shy away – from funding advancements in agriculture. Venture capital (VC) funding has declined by 60% since late 2021 due to market uncertainty and lower risk appetite. PitchBook’s Q1 2024 Agtech Report shows that deals are at their lowest in six years. Bloomberg Intelligence points to market and operational pressures making it difficult for ag and food companies (much less start-ups) to grow, despite the need for innovation to benefit from AI, achieve ESG goals, and meet consumer demand for sustainable products. This has led many agtech start-ups to refocus and reconsider the future.
Though investment may be slower and lower, investors remain interested in those agtech start-ups with problem-solving technology, proven leadership and a strong brand. Now is the time for agtech companies to crisp up communications to strengthen their reputation. Here is a way to make sure your house is in order so any M&A discussions will be strategic, effective and support a strong valuation.
Reputation Management
Regardless of whether M&A is in your business plan, reputation management is an everyday MUST DO. Is your company known? Respected? Are your employees fully engaged and clear on priorities? Do you have a clear and compelling story? And are company actions on brand? According to Forbes, CEOs/Founders should spend 25% of their time connecting with team members at all levels. When you do, make sure your communications objective and messages are crisp and clear. Clarity is critical.
If M&A is a possibility, don’t go dark. Maintain your communications cadence and approach. Anticipate unintentional signals. Proactively manage rumors. And, most importantly, maintain and demonstrate focus.
Pre-Announcement and Announcement
Prior to any announcement, both companies must agree on a communications plan, beyond the press release. Managing your story internally, with customers and the media sets the stage for future success. Be transparent and honor commitments about sharing news.
Change management. It’s not a dirty a word and it’s not a science. It’s simple: you are on a road heading to a destination. Transparently describe the journey based on what you know each step of the process as best you can. Transparency is defined as “allowing objects to be distinctly seen.” It does not mean share everything all at once, but rather what you can when appropriate. Understand the impact of change to employees, customers and partners. Recognize changes and key milestones routinely.
Integration
The reality is no integration will be perfectly implemented. Why? Because at T-30 and on Day 0, no one truly knows what will be required in the months ahead. There will be surprises and failures. The key is a cohesive, empowered team who can plan, execute and ADAPT to meet the goals. Communications is critical.
A short sidebar from a veteran M&A communicator – please – avoid the slogan “Better Together”. The acquired business employees hate it, and parent company employees know their future may not be “better”.
Internal communications require a clear and authentic message tailored for savvy businesspeople. Hone a message that will adapt and adjust as the integration team learns more over time. Humility and transparency are key in integration, for all stakeholders. Boldly say you don’t know, or there was a surprise, or we changed our perspective once we learned more. Success will ultimately be judged more fairly. Then define the end, when the two companies are now one and what’s next.
Do not be afraid to get help. The best operators are not always the right integrators.
Impact and Ripple Effect
Many agtech founders aim to make a significant impact. As M&As consume start-ups, the ‘reset’ will weed out viable businesses. During this time, it’s crucial to consider the broader impact of companies coming/going on the industry and farmers’ trust. Tech adoption by farmers is directly related to risk management. Frequent M&As could undermine farmers’ confidence in adopting new technologies in the future. Why would a farmer hitch her wagon to a start-up this year if it’s going to go away and she’ll have to integrate another technology next year? If a lot of M&As occur as predicted, the ripple effect could be devastating for the advancement of ag innovation.
As a card-carrying member of the agtech community, make sure the ‘why’ of your M&A action clearly communicates the impact. This is not just a one-and-done, but a marker demonstrating a clear transition to a progressive ‘what’s next’ for the business, its stakeholders and agriculture.
Ultimately, lean into clarity. There is a great need for clarity at a time when agtech companies still require investments to scale. Make sure to bring that clarity to your business through your everyday communications – whether you have M&A plans or not. Or, as Albert Einstein once said, “If you can’t explain it simply, you don’t understand it well enough.”
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