Stop buying technology, start buying outcomes
This story serves as a guide for growers as they weigh the potential gains against the costs of new technology. Ultimately, when deciding which innovations deserve capital, the first question to ask is: If the new technology works exactly as promised, what outcome will change for my business?
By Jennifer Neujahr
Walk the aisles of any major horticultural exhibition, and the parade of new technology is extraordinary, relentless and unfolding on many fronts. From automation, robotics and automated sensors to artificial intelligence, data-collection tools, biological crop protection, new substrates, lighting, irrigation and propagation systems, countless innovations are competing for growers’ attention and capital.
There is no doubt that technology can make horticulture far more efficient, precise, labour-saving, profitable and resilient in the face of environmental challenges and adverse weather conditions. However, almost any advance is sold as a breakthrough and the next big thing. As a grower, navigating this dynamic environment is crucial to propelling your business forward. But at times it can feel like ‘adapt or be left behind’.
Keep a cool head In the age of rising AgTech, it is crucial to keep a cool head because every investment must ultimately contribute to the efficiency and profitability of your growing operation.
So, how can you identify the right technology for your needs and determine whether the potential benefits justify the cost?
I believe we need to become much more disciplined about answering that question. The most impressive technology is not necessarily the best investment. The best investment is the one that produces a measurable outcome for the grower’s business.
The best investment is the one that produces a measurable outcome for the grower’s business. Photo: 4xrobots, Greentech-award-winning transplanting cobot.
Look beyond the product
Growers do not need more features Technology companies understandably talk about what their products can do. Growers have to think differently.
A grower is not buying a sensor. The grower may be buying earlier detection of a crop problem. A grower is not buying automation. The grower may be buying throughput, consistency or the ability to expand without finding another twenty people. A grower is not buying a new propagation system. The grower may be buying lower losses, faster turns or a more uniform crop.
That distinction matters because features are easy to demonstrate. Outcomes have to survive contact with the production system.
The system is the investment One of the most common mistakes in technology evaluation is looking at the product in isolation.
Consider a propagation technology. It may improve root architecture in a trial, but the commercial decision does not end there. How does it move through automation?
What changes in filling, irrigation, handling, grading or transplanting? Does it remove labour or simply move labour to another step? Does it work across enough crops and production cycles to justify changing the system?
The same is true for software, climate technology, irrigation and robotics. Every new technology enters an existing network of equipment, people, crop schedules and operating habits. A technically excellent product can still be a poor investment if the surrounding system cannot capture its value.
This is why I increasingly believe growers should evaluate the system change, not simply the product.
Horticulture will become more automated, measured and connected. Photo: Hoogendoorn.
The investment test
A six-question investment test Before committing meaningful capital to a new technology, I would want a grower to be able to answer six questions.
First: What problem are we solving? Not the broad industry problem, but the specific problem in this operation.
One common challenge I see is that growers haven’t clearly defined the problem they need to solve, leaving them snowed under by the many available technology options. While labour shortages, rising input costs and limited resources affect the greenhouse industry broadly, each operation faces different priorities based on its location, crops and scale.
A grower in a colder climate may focus on reducing heating costs, while one in a hot climate may prioritise cooling and ventilation. The right technology depends on that constraint.
Second: What does that problem cost us today? Labour, shrink, water, energy, crop losses, missed production, quality, or opportunity cost all count.
For example, consider a grower evaluating a change in growing media. Comparing the cost per cubic metre of the existing and proposed mixes is only the beginning. If the new formulation costs slightly more but improves rewetting, crop uniformity or shelf life and reduces the number of plants ultimately discarded, the relevant economic question is not simply, “What does the substrate cost?” It is, “What does shrink cost us today, and how much of that loss could this change realistically remove?” Third: What measurable outcome should change? If we cannot define the expected result before the investment, it becomes very difficult to judge success afterwards.
Fourth: What else has to change to capture the value? Equipment, workflow, training, crop protocols, software, infrastructure or management time may all be part of the real investment.
For example, a new propagation or growing system may demonstrate a technical advantage in trials but still require changes in filling equipment, irrigation, handling, crop protocols or employee training. Those changes belong in the investment calculation too. A technology that performs extremely well in isolation can still undermine its own return if capturing the benefit requires too much disruption elsewhere in the production system.
Fifth: What new dependency are we creating? Who services the technology? Are spare parts available? What happens if the supplier changes direction? How dependent are we on connectivity, specialist knowledge or one key employee? Sixth: If the technology works exactly as promised, does the business actually become better? That final question sounds obvious. It is surprisingly easy to skip.
Air Tray technology: waiting to be potted up in a nut tree propagation facility in California. If rooting improves, what happens to losses? If the crop finishes three days earlier, what are those three days worth in the growing cycle? Every commercial trial also needs an economic column. Photo: Next Step Solutions.
The most impressive technology is not necessarily the best investment
Jennifer Neujahr Founding Partner, Next Step Solutions
Assess the value and the change
Technical success versus economic success Horticulture is good at technical trials. We measure rooting, yield, water use, disease, uniformity and finish time. We should. But every commercial trial also needs an economic column.
If rooting improves, what happens to losses? If the crop finishes three days earlier, what are those three days’ worth in the growing cycle? If irrigation becomes more uniform, does shrink fall? If a robot removes a repetitive task, how many labour hours actually disappear from the business?
The economic result does not always have to be immediate cost reduction. Value can come from risk reduction, consistency, quality, capacity or the ability to grow without adding scarce labour. But the outcome still needs to be visible enough to justify the investment. The hidden cost of change The incumbent system has an advantage that innovators sometimes underestimate: it is already understood.
The grower knows its limitations. Employees know how to operate it. The business has adapted around it. Replacing it introduces uncertainty, training and management attention even when the new technology is better. In this context, it is important to consider what business management jargon calls the ‘status quo bias’. If entrepreneurs, by their very nature, resist new technology because they fear uncertainty and loss of control, removing the guesswork from innovation is crucial.
That means a new technology does not merely have to work. It has to create enough additional value to overcome the cost and risk of change.
This is one reason incremental innovation can be so powerful in horticulture. A technology that improves an existing process without forcing the grower to rebuild the entire production system can sometimes create more commercial value than a more revolutionary alternative.
Better business is the objective Horticulture will become more automated, measured and connected. Labour shortage, water constraints, crop-protection pressures and thin profit margins make that direction difficult to avoid.
But more technology is not the objective. Better businesses are. So when the next innovation arrives, I would resist beginning with, “What can it do?” I would begin with a tougher question: “If this works exactly as promised, what outcome changes for my business?” Because growers are not simply buying technology; they want to know how it might bring them new customers, improve yields, defend their existing base, or inspire new strategies. They should be buying outcomes.
A technically excellent product can still be a poor investment if the surrounding system cannot capture its value.
Jennifer Neujahr Founding Partner, Next Step Solutions
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