Marc Emmer is president of Optimize Inc. and an author, speaker and consultant specializing in strategy and strategic planning.
When we hear the iceberg metaphor, our imaginations often drift to the idea that danger lies beneath the surface. But instead of focusing on the hidden threats, let’s explore the vast sea of opportunity that can exist there.
In a recent Masters of Scale podcast, Reid Hoffman interviewed Land O’Lakes CEO, Beth Ford, and highlighted how, believe it or not, the company sells much more than butter—it’s an expansive $14 billion networked ecosystem. Among its many businesses, it also makes vitamins and feed. The company feeds the cows, produces milk and cheese and gathers crop data from the farms.
This example can provide inspiration for how small and medium-sized companies can scale through vertical integration—a strategy where a company expands its operations to control various stages of the supply chain. This is just one way to uncover hidden opportunities.
Build Beyond What Is Visible
At the tip of the iceberg lies what we can readily observe—the products, services and strategies that are apparent to customers, competitors and stakeholders. But opportunities often extend beyond what you can see.
This runs counter to how most businesses think today. Some focus solely on building organizations horizontally, acquiring new customers or completing acquisitions. In fact, many companies deploy an acquisition strategy, which is code for buying up businesses that are like them. This often happens when companies fail to quickly grow organically. I find that in doing this, you often build more complexity without purpose.
Vertical integrations can actually reduce risk by providing a buffer for the supply chain and other problems within the ecosystem. If a company builds its own capabilities and capacity (instead of through suppliers), it can react faster when there are material shortages and the like.
Beneath The Surface: The Unseen Potential
Now let’s venture beneath the waterline, where the bulk of the iceberg—and the hidden opportunities—reside. Using Land O’Lakes as an example again, the company dives below the surface to operate enterprises involved in feed production, seed sales and even agricultural technology. These ventures enable them to exert greater control over the quality and sustainability of their products while fostering innovation and growth.
By integrating various aspects of their supply chain, companies can create a synergy that transcends the sum of their parts. This synergy can lead to increased efficiency, reduced costs, improved product quality, and the ability to weather market fluctuations with greater resilience.
In Land O’Lakes’ case, the vertical integration strategy not only ensures a consistent and high-quality source of milk for dairy products but also allows for innovation in sustainable farming practices and technology. This strategic depth benefits the company while also opening up a world of possibilities in terms of new revenue streams, partnerships and market positioning.
Thinking Beyond The Surface
So how can other companies apply the lessons of the business iceberg to uncover hidden opportunities for success?
• Explore vertical integration. Consider whether there are opportunities to expand your operations vertically by acquiring or developing businesses that complement your core strengths. This can help you gain more control over your supply chain and create new avenues for growth.
• Innovate and adapt. Look deeper for innovations and technologies that can enhance your other products or services.
• Embrace strategic partnerships. Collaboration with other businesses is a powerful way to leverage what’s hidden beneath the surface. Seek partnerships that align with your goals and can help you tap into new markets or capabilities.
• Rethink risk management: Rather than viewing the submerged part of the iceberg as a risk, see it as an opportunity for risk mitigation. By diversifying your business interests and expanding into related areas, you can spread risk more effectively.
• Constantly scan the horizon. Stay vigilant for emerging trends and market shifts. What lies beneath the surface today may not be the same in the future. Continuously assess and adjust your strategy to take advantage of evolving opportunities.
Seizing The Business Iceberg’s Bounty
The business iceberg metaphor challenges us to shift our perspective from one of caution and risk avoidance to one of opportunity and growth. Just as Land O’Lakes leverages vertical integration to delve into the vast depths, I believe businesses of all sizes and industries can explore untapped potential to fuel their success.
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