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November 22, 2023
Many of you have heard me discuss the management mindset and how important it will be for the future of agriculture. A new part of the management mindset is a section on the “minus mindset.” As agricultural operations grow, expand, and consolidate, a certain amount of time must be allocated toward “planned abandonment.”
Peter Drucker, the famous management guru, was an advocate of this process so that resources allocated toward marginal activities are freed up for more profitable endeavors. If you think about your farm operation, you must consider that if you did not already grow a particular crop or raise certain livestock, knowing what you know now, would you still do it?
A successful producer in his mid-40s indicated that he was a director on too many boards. This burned him out as a result of participants' egos and a lack of productivity in the organizations and institutions.
With fewer younger farmers and ranchers, this will become an increasing dilemma. This situation is also rippling through rural communities as agriculture consolidates with fewer farms and agribusinesses. A shortage of first responders and volunteers is becoming more noticeable in rural America and the ones that do serve often get burned out.
Another producer commented recently that he has used the minus mindset in enterprise allocation and in rental negotiations. Satellite farms that were distant from the core enterprises and did not align with his methods of farming were quickly eliminated. He found that total revenues decreased, but profits increased as a result of efficiency and timeliness of planting and harvesting, which increased overall effectiveness.
One farmer indicated that he put his ego aside on growth and eliminated landlords that were a hassle. Another producer actually fired a customer who was slow paying and tough on his employees who were serving the individual.
A producer in his mid-40s indicated that he was putting a pause on expansion to re-calibrate his work-life balance. His main issue was attracting and retaining a high quality, productive workforce. The hassle was not worth the mental stress which must be figured into the equation, often above bottom-line economics.
In your next planning session, adapt the minus management mindset. It can be difficult because you are often required to unravel what you built earlier in the business cycle. The more the business grows, the more difficult this task will be.
Contributing Writer, Corn+Soybean Digest
Dr. Dave Kohl is an academic Hall of Famer in the College of Agriculture at Virginia Tech, Blacksburg, Va. Dr. Kohl has keen insight into the agriculture industry gained through extensive travel, research, and involvement in ag businesses. He has traveled over 10 million miles; conducted more than 7,000 presentations; and published more than 2,500 articles in his career. Dr. Kohl’s wisdom and engagement with all levels of the industry provide a unique perspective into future trends.
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