Nate Baxter didn’t envision himself as the executive of a lawn and garden company when he worked on the family farm during the summers of his childhood. But he built a career with a blend of technical talent and leadership ability that eventually led him to ScottsMiracle-Gro.
Baxter spoke with InformationWeek about the early days of his career, growing into leadership roles, and how ScottsMiracle-Gro is embracing technology to change the way it serves customers and operates internally.
Early Roots
Baxter comes from a long line of engineers. He studied physics, materials engineering, and materials sciences, ultimately earning three engineering degrees. He spent his college career focusing on metals with the expectation that he would eventually work in the aerospace industry. Instead, he got his start working in the semiconductor space.
Baxter started his career as a process engineer with Intel. He moved into engineering management roles at the company and took advantage of employee education options.
“I remember taking a class taught by the then CFO on how to understand a P&L. I was an engineer. I was nowhere near a P&L,” he says.
He spent a decade with Intel, climbing the ladder steadily, but Baxter began to crave change.
“I really wanted to be put in a situation where I would live or die by my decisions. I would either make a good decision and it would be good for the business, or if I made a not so good decision, I would pay the consequences,” he explains.
An Affinity for Leadership
Baxter made the move from Intel to Tokyo Electron, an electronics and semiconductor company, where he started in marketing and sales. Within one year, he ran a division of the company. Over the course of nearly 16 years with Tokyo Electron, Baxter rose through the ranks and gained experience in the U.S. and overseas.
He found a blend of technical expertise and leadership to be the right balance.
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Nate Baxter, ScottsMiracle-Gro
“I love technology, but I also love strategy. I love business,” Baxter shares. “I just have a set of interests that I think really align well with general management, but coming with that technical background, I could take complex things and distill them down into useful points that I could then get an organization to rally around and go deliver results on.”
Those interests served him well at Tokyo Electron, but Baxter found himself ready for a new challenge.
Growing into the President and COO Role
Baxter knew Jim Hagedorn, CEO of ScottsMiracle-Gro, and his family for a long time before he stepped into the president and COO role. He initially said no when Hagedorn reached out with the opportunity, but Baxter decided eventually it was time to push himself out of his comfort zone.
A love of gardening certainly helps if you are going to lead a company like ScottsMiracle-Gro, and Baxter has that in spades.
“We’ve got a family farm, which has a bigger than your average vegetable garden in it,” he says. In Ohio, where ScottsMiracle-Gro is based, he and his wife live in a condo and tend to their indoor plants. They also have a home in Massachusetts with more outdoor space for planting.
Many people share Baxter’s love of gardening. During the pandemic, people were spending far more time at home and that love surged. But today, work patterns have shifted back toward pre-pandemic times, and people don’t have as much free time to put into gardening.
“Consumer engagement … has been a challenge for a lot of CPG companies coming out of the pandemic, and it’s no different for us,” says Baxter.
When Baxter arrived and took stock of the challenges facing the company, he saw the chance to drive a tech transformation.
“When I got here, it just became very obvious to me that there was a lot more this company could be doing [by] leaning into technology, even though we’re really just selling bags of dirt for a living,” says Baxter.
Leading a Tech Transformation
ScottsMiracle-Gro has indeed made a big name for itself in selling dirt, but it does a whole lot more as well. The opportunities are adopting new technology at ScottsMiracle-Gro fall into two large buckets, according to Baxter.
“One is internal facing: How do we optimize? How do we run the business more intelligently, more efficiently? And the second is the consumer facing: how do we leverage technology to develop better products for the consumer or engage the consumer?” he says.
Internally, ScottsMiracle-Gro now uses AI to better understand sales patterns and to better match inventory levels with consumer demand.
“We now have built a machine learning model that looks at about 60 variables, everything from weather to consumer sentiment,” says Baxter. “Every week, we run that model and we correlate it with sales the previous week to come up with understanding of what drove sales or why did sales lag.”
Using that model to analyze point-of-sale data has helped the company to consolidate its delivery network.
“Here in Ohio, we have a really great example. We consolidated from five distribution centers down to one, and we immediately realized the savings of about half a million miles of diesel trucking a year eliminated,” says Baxter. “There’s a good sustainability story, but it’s also good for the company because we’re spending less money.”
On the consumer-facing side, ScottsMiracle-Gro is in the process of launching a new website that integrates all of the company’s brands.
ScottsMiracle-Gro also soft-launched an AI chat tool that draws on the company’s in-depth knowledge. Currently, the tool is limited to just information in the company’s own LLM. The company is working to expand its access to public information as well.
Baxter envisions consumers using that tool to identify issues with plants, whether it is caused by disease, insects, or weather patterns. Imagine a consumer is looking at a problem spot in their lawn.
“My vision is this consumer can upload that picture, and we can use AI to go through our database of knowledge and say, ‘Hey, based on this picture and based on knowing where you are and based on knowing the weather patterns over the last few weeks, we think that what you’re seeing in your lawn is not drought, but we think it’s brown spot, which is a fungus and here’s how we recommend you can take care of that fungus.’”
Baxter notes the importance of controlling the company’s data and ensuring the AI tool makes suggestions that take into account consumers’ local best practices and regulations.
ScottsMiracle-Gro is also integrating AI into its customer support function. The support team needs technical knowledge to answer customers’ questions.
“Instead of having a consumer services person spend 20 minutes digging through our archives to get an answer, we’ll use that AI tool to go bring that information,” says Baxter. “We’ll take the average time spent per customer from call it 30 minutes down to under a minute on average, which is a huge productivity savings.”
ScottsMiracle-Gro is also exploring ways to thrive in a time of shifting consumer demands. Younger generations are pushing for more natural and organic gardening solutions.
Demand for these new kinds of products is apparent, but understanding how to use them can be overwhelming. Walk into a lawn and garden center, and shoppers may be faced with floor-to-ceiling shelves of soils, amendment products, and fertilizers. Where does the consumer, especially one new to gardening, even begin?
“How do they get that information we want to provide?” asks Baxter. “We want to provide the inspiration, and that’s a big use of AI that will be consumer facing.”
Achieving true transformation with technology isn’t just about adopting new tools. It also requires a culture shift. ScottsMiracle-Gro is a venerable company. Many of its workflows have been in place for decades, and change can be met with skepticism. Layer on another challenge: a significant chunk of the company’s workforce was hired during or after the pandemic.
“Any company culture we had pre-pandemic has been lost, and now, we’re trying to figure out how to regroup it,” says Baxter.
Rebuilding company culture is both a challenge, as well as an opportunity to make technology foundational. As president and COO, Baxter focuses on showing how technology, and the change it brings, can drive tangible results. And he is seeing progress.
“The whole leadership team understands that it’s critical to our success. We have to lead with technology. We have to get smarter,” he says.
