IN SICILY A SUCCESSFUL NURSERY EXEMPLIFIES THE IMPORTANCE OF KNOWLEDGE MANAGEMENT WITHIN THE DYNAMICS OF GLOBALIZATION
di Riccardo Paterni, Meir Russ
Piante Faro’s growth and success is a wonderful example of dynamic entrepreneurship developed through a proactive and visionary interaction within global market forces overcoming the constraints of a knowledge-deprived region. The company is focusing on the development of four key factors: effective utilization of local natural resources; an effective and proactive global search for and utilization of technological knowledge combined with local investment in R&D relevant to local operations; and an active search for global market opportunities. The integration and managing of these four factors has stimulated a remarkable entrepreneurial international growth, defining the characteristics of a unique and internationally recognized brand in its field, while acting in a socially responsible manner and supporting the local economic development.
Piante Faro (www.piantefaro.com) started operations in Carruba di Riposto (Catania - Sicily) about 35 years ago as a retailer of plants suitable for Mediterranean and cold European climates suitable for interior and exterior decoration. At inception the company operated locally with a handful of employees and five thousand square meters of land. Today the company employees 300 people, operates a total area of five hundred thousand square meters and has an annual turnover of 25 million euros, 80 % of which is generated by exports to 32 European and Middle Eastern countries.
In this abstract, the authors intend to examine the factors and practices that allowed a once- small enterprise to become an internationally recognized brand leader, focusing on the company’s knowledge management and use of innovation.
Learning to leverage on quality, globalization and available resources
The company is located in the flat lands between Mount Etna and the Mediterranean Sea. Mount Etna protects the area from cold northern winds while also providing year-round water for irrigation. The region’s volcanic soil (from Mount Etna) is rich in minerals. These elements create a unique, world-class, natural environment that, when properly managed, is ideal for mass cultivation of quality Mediterranean plants (for example: olive, lemon and palm trees, evergreen herbal and aromatic plants, as well as several kinds of interior decorative plants). Piante Faro maximized the utilization of these natural characteristics to both serve and stimulate demand from northern Europe’s largest distributors, retailers (for instance, Ikea, Carrefour, Leroy Merlin, Metro, Aldi, Lidl and others) and garden centers. Large retailers in countries such as the United Kingdom, the Netherlands and Spain, as well as large clients located in developing markets such as the Middle East are also interested in Piante Faro’s products.
Since the 1970s the global demand for Mediterranean plants has constantly increased. Traditionally, producers were located in Spain, France and Italy; large commercial companies operated as intermediaries between small, local producers and international customers. The commercial companies focused on sales and distribution, while the producers focused on production. The lack of direct contact between customers and producers was a barrier to innovation of production practices as well as for recognition of changing market needs.
Beginning in the 1980s, producers started to attend international trade shows, increasing direct visibility to customers, network development and new need recognition opportunities. At the same time, customers began to take an interest in visiting producers at their production facilities, again, increasing the likelihood for the growers to become more attuned with actual market needs. Those face-to-face reciprocal meeting occasions enhanced the mutual learning possibilities. The growers could show their capabilities and the buyers could estimate their growth potential. Those face-to-face meetings also created trust and mutual respect for capabilities. Product quality was an essential focus, as was mass quantity production and variety of offerings.
Acquiring knowledge and utilizing it at best within the context at hand
As a producer, Piante Faro took full advantage of these new market dynamics skillfully acquiring, managing and implementing technical and marketing knowledge to utilize the best characteristics of its natural environment. Piante Faro’s founder had an intuition about these dynamics. He traveled extensively to learn best practices and techniques relevant to the field. The key learning tool was face-to-face interaction with professionals. Accomplishing this required strong passion, genuine respect for other work and talent, an ever-present sense of humility, and genuine human personal touch and empathy. (The company’s founder successfully shared these qualities with the 300 employees that are part of the organization today.)
In fact, this know-how was acquired through frequent visits and direct interaction with producers from different countries, such as France and (most importantly) the Netherlands (the land of specialized and successful nurseries for centuries). In the Netherlands, the natural environment requires producers to constantly focus on technological innovation to reduce the negative influence of climatic factors. At the same time, Dutch growers receive strong support from the government directly and indirectly via extension services. Through focused observation the founder was able to overcome the difficulties of coming from a knowledge-deprived region, and acquired key knowledge focusing on increasing effectiveness, lowering day-to-day production costs, and utilizing advanced technology and automation systems to maximize greenhouses effectiveness. The learning contributed to an improvement of the company’s reputation, allowed it to build a regionally recognized innovative brand equity to support the company’s growth. This effect is partially a result of this industry being a close-knit network of close relationships, meaning that despite its spread globally, knowledge is freely shared by the different industry players.
Foreign customers and retailers began visiting Piante Faro in the early 1990s. Initially customers were skeptical that a small producer from a Sicilian village could provide them quality, mass produced plants and trees. But before long, Piante Faro was able to overcome these doubts by focusing on concrete practices; its organizational culture is rooted in learning-by-practice and customer service philosophy that never promises things the company cannot deliver. Seeing these values, large foreign distributors soon realized the company’s potential, and Piante Faro’s reputation grew by word of mouth. The company participated in yearly international trade shows, with the primary goal of convincing as many people as possible to visit their production facilities. Customers themselves began to offer marketing ideas, as well as practices and techniques to improve the company’s production. These contributions fueled the company’s focus on innovation by constant improvement, research and development. This innovation meant lower prices and an increasing consistency for customers in terms of production output standards.
A strategy of continuos focused reinvestment
Quality, quantity, variety, dependability (in terms of production and logistics) are possible because of two factors: the incoming flow of knowledge from the international customers which stimulated Piante Faro, and the consistent reinvestment of profits in implementing this technological knowledge in infrastructure, customer service, and ways to learn about and stimulate the popularity of Mediterranean plants within very promising emerging markets.
This case illustrates how, in a knowledge-deprived region, a visionary entrepreneur has been able to build a knowledge-intensive, successful and growing company by mixing vision, technological and marketing knowledge acquisition mixed with action-based learning, while being socially responsible and supporting the development of the local economy.