By Terry Betker
This is a fantastic time to be entering (or be in) the business world, because business is going to change more in the next 10 years than the last 50.
We always overestimate the change that will occur in the next two years and underestimate the change that will occur in the next 10. Don’t let yourself be lulled into inaction.
— Bill Gates
The quotes above, attributed to Bill Gates, have, I think, a direct application to primary agriculture. We all know that change in farming is hardly anything new.
There is a business axiom that states that a business – including a farm – will typically outgrow its management. Growth I mean here is in the literal sense of more acres or animals, but also in the business’s complexity. It’s rare that as a farm business evolves there aren’t more people and more people involved in ownership and management, generational transition, and the diversity of the business enterprise mix. Managerial development, and change, is required.
Even if your farm has been relatively stable, the requirement to advance business management applies to maintain the status quo. Failing to do so runs the risk of slippage, in relative terms, as compared to other farms in similar situations.
Over the years, I’ve come to respect that there are some things that, from a farm management perspective, are really challenging for farmers to do. I talk to farmers who have identified the need to make changes in how their farms are being managed. They will have come up with ideas on what the changes might look like and will often express their frustration in the difficulty in their implementation.
There are a few reasons why I think this happens. One is procrastination. There generally isn’t any real urgency – as in ‘this needs to be done this week’ – to the adjustments. But, pretty soon a month or two slips by with no action and soon a new production season is looming. This is the second reason. The production season for farmers is critical, justifiably filled with urgency and stress. In these situations, human nature causes people to revert to what’s worked in the past. When the production season ends, it’s back to the drawing board when it comes to making adjustments to those management plans. So if you’ve committed implementing some changes in management, what do you need to do this summer – during the busy season – to ensure that you don’t lose focus?
There needs to be a plan, and this is the third reason management changes take time. The lack of a plan is a significant stumbling block to change. How simple or complex the plan is becomes a factor. You can apply the SMART principle in determining the appropriateness of a plan that’s designed to effect some changes in how the business is being managed. ‘S’ stands for Specific. We are going to have monthly management meetings for example. ‘M’ stands for Measurable. You can measure if the monthly meetings are happening. ‘A’ stands for Attainable. Having monthly management meetings is attainable. ‘R’ is for Realistic. Is it realistic to have monthly management meetings? Perhaps not in May or September and if so, then adjust the Specific function to monthly meetings except for May and September. ‘T’ relates to the Time factor. We are going to start having monthly meetings next month.
The last reason I’m going to discuss is related to the ownership and management structure of the farm business. Management and ownership are almost always one and the same. So, if the person who is responsible for making the changes in management isn’t getting the job done, who do they report to? Themselves? The lack of accountability can be a major issue and at the same time, one of the easiest to remedy. Accountability to a third party can be a very effective way to maintain focus during the busy season as well.
If you do not change direction, you may end up where you are heading — Lao Tzu
First, a plan is needed. Given that a plan exists, if you can make accountability work internally, within the ownership and management group, that’s likely the preferred scenario. However, this isn’t a realistic option for most farm families. External accountability can be really effective. Engage someone who you trust and feel comfortable in talking to, in some detail, about your business. The accountability factor lies in your commitment to do what you said you were going to do, when you said you would do it. And if you haven’t got it done, having to explain to the person why not and what you’re going to do about it. Change is unavoidable. How you deal with it is what’s important.
Terry Betker is a farm management consultant, with Backswath Management Inc. He can be reached at 204.782.8200 or firstname.lastname@example.org. Click here for more of his columns on farm management.