When Bob Lane became chairman and CEO of Deere & Company, in August of 2000, he inherited a leading producer of agricultural, construction, forestry, and turf care equipment that enjoyed loyal customers, a strong dealer network, and a rich heritage spanning 164 years. He also inherited a company that was, in his words, “asset heavy and margin lean,” too often dissipating economic value and less prepared to compete in a changing and more demanding global environment than it could be.

Lane, at the time an 18-year veteran of the company, had held a range of operating positions (including a 2-year term as CFO) and immediately set to remedy these problems. With his leadership team, Lane created an ambitious plan to manage assets more efficiently, cut costs, and manufacture a new generation of products more in keeping with retail demand. The plan aimed to reduce Deere’s vulnerability to the cyclical swings and unpredictability of the agriculture and construction markets. All salaried employees received rigorous performance goals aligned with the plan, and Deere developed efficiency targets for each point in the cycle that, if met, would deliver performance exceeding, on average, that of the company’s best years.

Six years into the effort,...