June 22, 2023
Farms are busy places, and there is always more work than time in a day. One day and season runs into another; before you know it, it's time to start again. It's hard to think and plan for next week, let alone something longer or bigger. Yet some farms can plan and execute short, medium, and long-term plans and reap the benefits.
The farms that execute these big plans run smoother, whether it is a dairy farm in New York, a vegetable farm in Washington, a family farm, or a farming conglomerate. The employees are engaged, focused, and the work is done on time. On these farms, there tends to be less confusion and lower amounts of toxic conflict. The owner's families tend to get along well, and the farms also tend to be more profitable.
The secret is…
What is the secret of these farms? Almost all have fully aligned, detailed plans that focus their time, money, and efforts.
These farms have invested in strategic planning and strategic execution. In working with these operations, one can observe the benefits of aligning values, vision, and a detailed strategic plan. As a result, these farms not only can track progress, but also see it and when that progress accelerates. When they get stuck, they refer to the plan to get unstuck. They have more fun farming.
Strategic planning is not a new concept in business for either large or small operations, but it is rare on farms. However, it is gaining popularity. Should you consider creating a strategic plan?
The benefits of going through the strategic planning process are many. Foremost, strategic planning builds alignment around what is vital for the farm's success. Even as a farm looks forward, it’s important to not lose track of the basics that have made it successful. I call these very important basics the anchors. Examples are understanding the cost of production, landlord relations, debt management, employee turnover, etc. Starting new endeavors is fine, but focusing on anchors keeps the farm grounded when the economic winds shift.
A good strategic plan allows for better and faster decision-making at all levels. Everyone from the owner to the lowest "boot" on the ground understands the general direction and outcome for the month and year. Faster decision-making also applies to the owners. For example, when the neighbor drives into the yard wanting to sell their farm, there isn’t a need to have three owner meetings to hash out whether to invest in land or build a new milking parlor. Those discussions have already happened during the strategic planning, and the banker knows the priorities of capital expenditure. Thus, the deal can move fast because most decisions have already been made.
As they arise, being able to say “yes” to opportunities quickly is a benefit and strategic advantage over those who start from scratch in analyzing opportunities.
Stay tuned for follow-up articles on how you can manage your strategic planning process. There are many ways to tackle strategic planning, and ’I’ll share some of the best tips gleaned from farms across the United States and Canada.
Schaefer is an executive management coach and succession planner for farms and agribusinesses. If you have a management or succession planning question, contact [email protected].
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