Executive Q & A: Jim Wegner

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Darigold, which has $2.4 billion in annual sales and 1,415 employees, is the marketing and processing subsidiary of the Seattle-based Northwest Dairy Association, a producer cooperative with 542 member families. Jim Wegner, previously senior vice president of operations in charge of the company’s 12 processing plants, was appointed CEO last year. He was photographed in the test kitchen at Darigold headquarters on Rainier Avenue South.

SCOPE: Most people don’t realize how big Darigold is. We handle 8.74 billion pounds of milk a year and only a third of that goes to consumers as milk. We have a huge export business, accounting for nearly a quarter of all United States exports of cheese, butter and powdered milk. In places like Southeast Asia and Mexico that are hot and humid, cows do not thrive and so the countries have to import milk powder. There is also a growing market in North Africa, where Nestlé, one of our biggest customers, sells little sachets of single-serve milk powder, chocolate drinks and infant formula.

EARLY YEARS: I was raised on a wheat and cattle ranch in Reardan, a small town west of Spokane in Lincoln County. The ranch was originally purchased by my immigrant great-grandparents in 1905. Reardan is a community of people with a strong work ethic trying to build a good life for their families under very challenging circumstances. I used to raise and train cattle to exhibit in Eastern Washington livestock shows. I worked side by side with my father to raise animals. People in the city don’t realize that on a farm you can do everything right but still fail due to things out of your control, like weather or prices.

CAREER: I graduated in food science and technology from Washington State University and went to work at a Safeway processing plant. I had to learn every job in the plant, from cleaning up to pasteurizing. I worked all the night shifts. I can relate well to the people who are operating our plants because I have done a lot of their jobs.

MANAGEMENT STYLE: I try to involve people a lot more to get input from them. We’ve put a process in place where every day we shut the line down and talk about what’s going on. We try to identify problems and talk about what we can do to fix them. It’s a way to bring fresh ideas in. We talk about what are appropriate measures of success and allow people to measure if they are winning or losing. People like to win. They like to think that things are better in terms quality, productivity and safety.

HISTORY: Darigold started in 1918. We now have 542 member families. Over time, smaller co-ops have merged with larger co-ops for greater efficiency. Two years ago, we merged with a co-op in Montana. They had more milk than their one facility could handle. By working with us, they had a [guaranteed] market for the milk. About 30 percent of the milk goes as fresh milk to the grocery shelf. The rest gets converted into cheese, milk powder or butter.

THE MARKET: What’s unique about the dairy industry is that it produces a highly perishable product every day and it is essential to have a place where the milk can be processed every day. Before the [United States] government stepped in to provide some stability, there were times when milk would get dumped because there wasn’t a market for it. Darigold converts the milk into something stable that can be stored and easily transported. As more milk continues to be produced in the United States, more and more of it will have to be exported.

COMPETITION: We’ve improved the science for optimizing the diets [of cows] so that the amount of milk we produce per cow is twice what it is in many places in the world. But it’s difficult for us to compete on price in global markets with countries like New Zealand, because we have a highly regulated pricing system. We pay our producers based on a federal price that’s set based on the domestic price of cheese and milk. We produce a million pounds of milk powder a day and we are often selling it [globally] two or three months out without knowing what we will have to pay for the milk.

MARKETING: We need do a better job connecting our consumers with the producers. One of the big issues in our society is that people are disconnected from where their food comes from. They don’t know Darigold is a producer owned by farmers. They don’t know how sustainable dairy farming is and how significant it is to the state’s economy. It’s second to apples, but the jobs that we provide are year-round jobs. In 2011, Darigold was the first winner of a national award for dairy sustainability. People don’t realize that dairy cows consume feeds like hay and byproducts from cotton production that people can’t digest and turn that into high-value protein. Cows are a very efficient way to produce protein.

NEW MARKETS: As the population gets older, the demand for fresh milk will decline. So how do you find other ways people can incorporate milk into their diets? We have invested a lot of money in technology to do the higher-end products. We just spent $20 million in Boise for a facility to produce cottage cheese and sour cream. We’re looking at products like Greek yogurt that are high in protein. We developed a coffee creamer made with real milk that people love. We produce Refuel, a protein drink that’s good for athletes. We’ve got the only plant in the Northwest that produces ultra-pasteurized milk products that have a longer shelf life, like the single-serve milk cartons used in school cafeterias.

BEING A CO-OP: Having your suppliers be your bosses makes for interesting dynamics. On the one hand, we need to reinvest in new products for long-term growth and stability. On the other hand, the [dairy farms] would like to be paid as much as possible for their milk. Each member of our board of directors represents a region and has occasional meetings with member dairies in their area. In addition, two of the 17 members of our board are outside directors, so they can bring a different perspective. One formerly worked for Goldman Sachs. He was amazed at how complicated the dairy business is.

Executive Q+A: Cougar Goals

Executive Q+A: Cougar Goals

The dean of WSU’s Carson College of Business is intent on creating new undergraduate opportunities.
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Larry W. “Chip” Hunter, a scholar of human resource management and industrial relations, became dean of Washington State University’s Carson College of Business in March 2015. He aims to make Carson College the premier place in the Northwest for an undergraduate business education.
 
EARLY YEARS: I was born in Kansas, lived in Minnesota during grade school and moved west to Moscow, Idaho, when I was 12. My father was an administrator at the University of Idaho. My mother opened a children’s clothing store. My first paying job was washing dishes at Allino’s Hoagie Shop in Moscow. The place has been remodeled and is now called Gambino’s and is owned by Nancy Swanger, the director of our School for Hospitality Business Management! 
 
WHY BUSINESS: I was curious about workplace conditions and how money creates opportunity. As a professor, I began to wonder if we could get students thinking about how they, as managers and leaders, can create opportunities for others.
 
EDUCATION: I got my master’s at Oxford University, where I worked for legendary professors of economics, politics and philosophy. I also learned to play cricket. While working on my doctorate at MIT, advisers encouraged me to get out from behind my desk and understand the world, focusing on questions that matter. 
 
U.S. BUSINESS EDUCATION: We are very good at training students in technical business skills, and by encouraging them to take courses in liberal arts and sciences, we help them develop critical thinking and communication skills. At research universities, professors also do research and inspire rigorous ways of thinking about problems. That said, we don’t always do the best job of training students to translate their technical skills and abstract thinking into defining and solving real problems. We also don’t do a good job of teaching them to confront their mistakes and learn from failure. 
 
CARSON COLLEGE: Employers want students who have all the required technical skills in things like finance and accounting and who are analytical, but they also want students who can communicate, collaborate, take initiative and be entrepreneurial. There isn’t enough time to teach all that separately, so one idea is to infuse a lot of that thinking into existing courses. Accounting students, for example, might use online “adaptive learning” technology to learn technical skills, but then work in groups in class explaining the concepts to each other and working on issues they don’t understand. That encourages collaboration. We have a task force looking at these kinds of approaches and how to diffuse it into the faculty. 
 
WORKFORCE READINESS: We need students with strong entry-level skills, but we also need to shape their ability to learn. One approach is to work closely with employers to structure great internship opportunities, and encourage students to engage in global experiences, networking events and business-plan competitions. The best predictor of getting a job is having an internship. All studentst should have an internship as part of their education. 
 
PULLMAN: Having our main campus in Pullman can make it difficult to bring in experts and attract a diverse group of students. But we are creating diverse campuses across the state. Our Tri-Cities campus has a deep expertise in wine business management, our Everett campus works with experts in senior living management, and in Vancouver, our students do hands-on consulting with a local business in their senior year. We’d love to work with alumni to raise a fund to invest in innovative ways of teaching business.  
 
ONLINE EDUCATION: We are learning more and more about how to work in the online environment. I’d like to use more “adaptive learning” technologies to guide students through their more technically oriented courses, identify areas they have trouble with, and have facilitators and instructors there to help students get through challenging bits. 
 
DEVELOPING LEADERSHIP: There’s interesting recent work that shows introverts and extroverts are equally likely to be effective leaders. Self-awareness is a common theme among successful leaders. How do you play to your strengths? How do you compensate for your weaknesses? And how do you discover what those strengths and weaknesses are? Many leaders are really good listeners who know how to strike the balance between listening and acquiring information and not waiting too long to make a decision.
 
FIVE-YEAR GOALS: We want to make our online programs the best in the Northwest for the price. We also want to provide a lot more business education to non-business students, including courses in financial literacy so they know what to ask if they’re buying insurance or taking out a loan. When I was [associate dean] at the University of Wisconsin-Madison, we offered a one-week immersion course in entrepreneurship for scientists.
 
TEN-YEAR GOALS: To be among the top 25 public undergraduate business programs in the country — the first place students choose for an undergraduate business education in the Northwest. We also want to become the place that the business and policy community goes to for critical thinking about the Northwest. 
 

TAKE 5
Get to Know Chip Hunter

  1. DIVERSIONS: “I’m a trivia nut and went on Jeopardy! in the ’90s. I lost.”
  2. BOOK SHELF: “David Allen’s Getting Things Done is a great guide to personal productivity and effectiveness at work. Between the World and Me [by Ta-Nehisi Coates] is a deeply moving book about the reality of black experience in America. I just started reading Doris Kearns Goodwin’s Team of Rivals.” 
  3. FAVORITE DRIVE: “From Seattle to Pullman, with its changing geography, over the Cascades, into the high desert, and then finally into the Palouse.” 
  4. ADMIRED LEADER: “I am in awe of Lincoln — an amazing combination of steel spine and flexibility in approaching problems, of deep unwavering principles combined with pragmatism.” 
  5. DREAM VACATION: “A golf trip to St. Andrews, Scotland, with a group of my buddies.”

EXECUTIVE Q+A RESPONSES HAVE BEEN EDITED AND CONDENSED.