June 1998
The Farm Executive for the 21st Century
15 reasons why some farmers are better managers
By Danny A. Klinefelter
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Prairie Grains is the
official publication of
the Minnesota
Association of
Wheat Growers,
North Dakota Grain
Growers Association,
South Dakota Wheat,
Inc., and the
Minnesota Barley
Growers Association.
Over the past 7 years, The Executive Program for Agricultural Producers (TEPAP) has given me the opportunity to get to know some of the best farmers and ranchers in North America. But even among this group there are those who stand out.
It's clear that being a top producer, focusing on controlling costs, keeping good records and having a sound marketing program are necessary to being a good manager. But, they aren't sufficient to describe the top executives.
So what are some of the major characteristics that distinguish the best from their competitors? Based on my observations and input from the TEPAP participants and faculty, I have identified 15 attributes. While not inclusive, they are as follows:
1) There are four patterns that consistently emerge when you look at the most successful managers:
They adapt to the changing needs of their markets.
They are open to exploring new ideas.
They operate more as resource managers than as producers.
They realize the importance of networking and developing alliances across the value chain.
2) They are strategic thinkers.
Most farmers are good at tactics and operations. But the top executives recognize that to be successful, you first have to clearly define what you want to accomplish, then let that determine how you do it.
In contrasting the operations approach and the strategic approach, the operations-oriented manager asks: "These are the skills and resources I possess, and this is what I know how to do, now what can I do (accomplish)?" The strategic manager asks: "What is it I want to accomplish (vision) and what will it take to get there (goals/plan)?" It's knowing the difference between doing things right and doing the right things. Instead of saying "I have a hammer and nails, what can I build?" the strategic thinker says: "What is it that I want to build, and what tools do I need?"
3) They are able to objectively and accurately assess strengths and weaknesses in people, including themselves.
Looking at our own deficiencies is something most of us aren't very good at. There is a tendency to develop blind spots and to error in being either overly critical or overly confident. Becoming the best requires knowing where to compensate for your weaknesses. This is true whether seeking outside expertise, hiring employees, building a management team or choosing business partners.
4) They operate in a continuous improvement mode.
They realize that however well they are doing, there is always a better way. Their behavior reinforces the notion that if your competition is walking, you need to be running.
5) They look at things more from a systems than a component perspective.
They "see the forest, not just the trees." They don't see themselves as having a farm, they see a manufacturing plant. It is a matter of not looking at things or decisions as independent stages or events. They have the ability to see the whole picture and how things fit together, not just within their own business but across the value chain. They recognize that many of the inefficiencies and risks within any system occur at the interfaces between the stages, and that many of the opportunities and potential economic advantages lie in reconfiguring and coordinating the various components. Poultry and hog integrators are prime examples.
6) They are calculated risk takers and excellent risk managers.
They realize that successful management is to a large extent successful risk management and that high rewards involve high risks. Because they tend to push the envelope, most have made their share of mistakes and experienced their share of failures. But they're not crap shooters. They do their homework, consider their options and develop a strategy before undertaking any new venture.
7) They spend more time thinking about "what if" scenarios and developing contingency plans.
They don't dwell on the negative, but with every decision, they think about what could go wrong and what they will do if it does. Just like the football coach, who must be ready to change his game plan depending on whether his team plays on artificial turf or grass, if it's windy or the field is slippery, if he loses this player or that player. For every entry strategy, there needs to be an exit (or loss minimization) strategy.
8) They are more likely to seek input and expertise from outside the business.
They seek out successful people with whom they can talk openly and get candid feedback.
This often means getting outside their commodity group and away from their home territory. It frequently involves interacting with people outside agriculture. They recognize that you can sometimes be too close to the problem to see things clearly. Southwest Airlines is not the largest airline carrier, but it's one of the best managed. Who did the airline turn to for advice when it wanted to improve its turnaround time? An Indianapolis 500 pit crew boss.
9) They see change and challenges as opportunities, and don't tend to view themselves as victims.
If things weren't changing, they would be bored. They realize that change can create windows of opportunity for those who are prepared to act. While they don't enjoy adversity, they recognize that setbacks are a part of life and are less likely to get bogged down in self-pity, wasting time complaining, or blaming someone or something for their problems. They learn from their experience, make adjustments, and go on.
10) They see themselves more as the head coach than as the boss.
They tend to lead rather than drive people. A major part of their job is to develop and motivate people so that the team is greater than the sum of its parts. As important as incentives are, they often accomplish as much or more by concentrating on finding ways to remove barriers and impediments to performance, and communicating to everyone in the organization how what they do relates to other parts of the business and how it affects the overall performance of the business.
11) Their approach to management is more balanced between key performance areas.
The most successful executives are those who build a management team and develop a management philosophy that emphasizes being good across the board. This includes production, finance, personnel and marketing (both buying and selling). In the short run and under specific conditions, there are often high payoffs to being exceptional in one or two areas. But staying power and long term success tends to reward balance and continuous improvement.
12) They spend more time monitoring and analyzing performance.
They recognize that most major difficulties occur not because problems or opportunities aren't recognized, but because they are recognized or acted on too late. Spending more time on diagnosing problems and analyzing successes also assures that they are treating the cause and not a symptom of the problem. This approach gets things done right the first time and avoids wasting time and money readdressing recurrent problems. It also leads to the adoption of behaviors and procedures that are more likely to lead to repeating successes.
13) Their decisions are based more on reason and judgement and less on emotion.
This doesn't mean they aren't emotional, but rather that they have the ability to separate emotion from reason when it comes to making business decisions. Moreover, not letting their thinking be clouded by emotions doesn't mean not relying on their intuition. Intuition and emotion are two very different things. Intuition relates to insight and inspiration, while emotion describes a psychological reaction.
14) They are more creative and innovative in their approach to business.
In particular, they are better able to grasp the key elements of one situation and see how it could be adapted or applied to other situations. They actually seem to seek out situations which challenge their thinking and force them to think outside the box. One of my biggest frustrations is people who believe that if an example isn't put in terms of their specific enterprise or their specific geographic region, then it isn't relevant to their situation. Many of the best ideas and opportunities will often come from outside your own environment and even from outside agriculture.
15) Finally, they work harder at communication.
They realize that one of the biggest roadblocks to progress in most businesses is secrecy. Without a clear understanding of what is going on, a shared vision and a sense of ownership, it is almost impossible to get commitment and a total team effort. Employees and family members want and need to know what they are expected to do, why they are doing it, and how they are doing. Top executives also recognize that good communication is a two way street. All the good ideas and knowledge don't necessarily flow from the top down. Those who know a job best and what could be done to improve performance are frequently those doing the job.
It's often important to recognize that the time you need to be most concerned about what changes need to be made is when things are going well. That's when you have the time and resources. It's also the time when complacency is most likely to set in. Remember, what was isn't anymore and what is won't be for long. n