Sports Business Update Host George McNeilly shares an exclusive interview with Deere & Co. CEO Sam Allen covering a range of topics from sports sponsorship to artificial intelligence and technology trends, and some golf stories along the way.
Q. One of the things that a lot of people are probably not aware of was this was all built on a business foundation in terms of the TPC network, the official equipment provider. You didn’t go into this not knowing exactly what you wanted to accomplish, did you?
SAM ALLEN: Well, I would like to say we were quite that planned, but we weren’t. Certainly early on, it was Hans Becker was the CEO that made the commitment then with the PGA TOUR to develop the course as a part of the sponsorship, create this venue. Clearly early on, a major, major motivation was, in fact, giving back to the community and what this meant. It also early on was definitely, from a business aspect, it would help our turf business that we’ve been in for 50 years, the golf equipment business that we’ve been in for 30 years, so that was an association with it, as well.
As the tournament has evolved, the charitable component, as you have indicated, has gotten bigger and bigger, the community involvement has gotten bigger and bigger. This year I think there’s going to be 2100 volunteers. 25 percent of them are John Deere employees or retirees. That’s gotten bigger.
But it’s also become much more of an opportunity for us to entertain our customers, and it has gone beyond the turf and golf equipment side of the business, even though we had greens superintendents in here on Monday, but the people that will be playing in the pro-am today are contractors that use our construction equipment, they’re farmers that use our farm equipment, and they’re from all over the world. So it’s really become an opportunity to reinforce the personal relationship side of doing business with our customer base.
Q. And software developers, we have driverless lawnmowers, all of this AI that you’re working on. It’s not just digging dirt anymore, is it?
SAM ALLEN: No, it’s not. In that sense, people sometimes say, well, wait a minute, what’s the synergy between let’s say golf equipment, turf equipment, farm equipment, and construction equipment, and in fact, it’s some of these technologies that really are — the AI part that you mentioned. We bought a company called Blue River Technologies in Sunnyvale. That AI capability can be use across all the platforms. We’re developing a web-based, in-the-cloud system for golf superintendents to manage the total cost of running a golf course.
A lot of that platform is the same as what we do for the farmer in managing their farm field. So there are definitely synergies, the telematic solutions, some of the electronic capabilities, and definitely also as we continue on a journey what we call automation to autonomy, and the automation components that eventually will allow for autonomous vehicles, that can be used across all these platforms.
Q. Your focus is obviously running this well-oiled machine of a company. How proud are you of this relatively small staff led by a former Deere employee himself that really makes a lot of things happen here? There’s a lot of innovation going on here when we look at this tournament standing out among the other 40 plus tournaments on TOUR.
SAM ALLEN: Well, we are extremely proud of him. I do want to change something, though. Clair (Peterson, Tournament Director) is still a member of John Deere, so what we did is we put him on loan to the Classic. They pay his salary, they determine his performance bonus, but his pension and everything, he still would be happy to know, is still going to come from John Deere. So I think that makes it somewhat unique.
But it also reinforces why we say and we tell all the volunteers here that this is not the Quad City Classic sponsored by John Deere; this is the John Deere Classic.
You’re carrying our brand, our commitment, our integrity, our values, and therefore you really need to reinforce that. And whether it’s the staff that runs this tournament or the broader volunteer community that ends up really running the whole tournament, we couldn’t be prouder of them. They just do a fantastic job.
And like anything else, the really good ones just continually making it better, and Clair and the team and the Classic board have done that, and I think this year, again, the venue continues to get better and better.
Q. More than 20 years’ title sponsorship, innovations every year. Last night we saw what came to mind, it was almost like an opening to a “Transformers” movie. We saw all of this great big industrial equipment rolling out in your test facility at the annual Big Dig. The concept of inviting PGA TOUR players and their families to a cookout and to reach out and touch this equipment, things like that really endear these players to the tournament, don’t they?
SAM ALLEN: They do, and the last few years I have not been able to go to the Big Dig. We’ve been hosting customers here. But the Big Dig came about when I was on the board of the John Deere Classic in a senior officer role, and what we kept getting back from the golfers and their families after we had it for the first few years, these folks very rarely get a chance to be together, and here they get to be in shorts and a tee shirt, the caddie, the golfer, the spouse, the kids, and they get to really interact, and they don’t have a bunch of us around them. We’re consciously keeping everybody else away so that they can just enjoy the evening, get a chance to take their kids on the equipment, and every once in a while when I do get there and I’ll get up to one of the players and say, Thanks for coming, and they’ll point down at their little one and say, That person wouldn’t let me not come, because this is the chance they get to drive that big equipment.
Q. It’s such a tremendous development, especially for a publicly-traded company. How have you folks been able to just make this work beyond your impact to the community where this brand, this iconic brand is even more well-known in that genre?
SAM ALLEN: So you’re 100 percent right. We’ve always got to ask, What’s the value being created. And yes, as part of a company you want to give back and there’s a lot of ways to give back, but in addition to that, when you’re doing something like this, especially something as public as this, you’re saying, where’s the value creation.
You know, it clearly is the partnership with the PGA TOUR. The fact that we’re the official golf course equipment provider to all the TPC courses, the fact that they are very much an ambassador to John Deere that allows us then to both reinforce the brand to everyone but also then reinforce the brand and the equipment to other golf courses and the turf equipment. We’ve seen studies and there are a lot of people that say, you’ve got a five-acre lot, you want a beautiful lawn, you associate, okay, if it’s good enough for a TPC course to have that type of equipment, I want John Deere equipment on my lot, as well.
There is a lot of business value. I would say over time — we still use that as a check to say, are we creating value. Over time these other areas of community involvement, of giving back, the volunteerism, the Birdies For Charity, as you mentioned, $13.5 million this last year, they probably now have overshadowed that, but it’s still something we actually ask ourselves every year, hey, can we — if somebody said, how can you afford to do this as a publicly-traded company, are you really using stockholders’ money well, we can answer that unequivocally yes.
Q. You’re playing today with the defending champion.
SAM ALLEN: Yeah.
Q. This kid has made two cuts since winning this tournament. He’s played four weekends because two of them were tournaments that didn’t require a cut. Do you have any golf tips to help this kid along?
SAM ALLEN: Absolutely none, other than don’t watch my game. What I’ve heard is he thinks he’s getting close to getting it back, so magic happens here. Maybe he gets his game back here. And if he doesn’t win here, maybe he starts playing well enough that next week something magical might happen.
Q. Fondest memory? You’ve had the big office since 2010. Fondest memories of being associated with this golf tournament or in your role?
SAM ALLEN: Well, I’d have to go forever on my role. And the golf tournament, first, one of the fond memories is just the relationship with the John Deere Classic volunteer board. A lot of them have become personal friends, and so — and we get together every so often, so that’s been fun.
I mentioned last night during an interview, I got asked one of my fondest memories from the golf tournament, and it was my second year of playing with Steve Stricker, and I had the yips really, really bad, and first five holes I make — I’m not 15 feet out on any hole, and I don’t get within three hole of the hole. So after the fifth hole we kind of caught up with the group in front from the morning round, and so he said, Hold on, Sam, I’m going to give you a putting lesson.
So we went about 15 feet from the hole, and he kept saying, Take it back slow. I mean — after 10 putts I still didn’t get close. So we kept playing, and then on No. 12, par-3, I knocked it just about three feet past the hole, I got a stroke there so birdie for eagle. I get up over the ball and Steve in front of the whole crowd goes, “Sam, wait a minute.” And he said, “I don’t care if I make this or not; I want you to take it back slow, way back, and come through.” And I get up there, and I don’t take my putter back a quarter of an inch and just barely touched the ball and the ball just rolls and rolls into the hole. And Steve gets mad, “Ugh, I told you to take it way back.” I said, “I made it.” He said, “I don’t care, you didn’t take it way back,” so that’s one of my fondest memories.
Q. I think that’s what they call executive privilege.
SAM ALLEN: It may be. Afraid so.