By Danny Klinefelter, DTN Farm Business Adviser
Top entrepreneurs and innovators aren’t wired like conventional operators. In the last few columns, I have been discussing the 25 attributes that set exceptional farmers apart from their peers. The list is based on the more than 1,000 graduates of The Executive Program for Agricultural Producers (TEPAP) that I have observed over the past two decades, as well as their own peer assessments. The following are some of their distinguishing traits.
1. They are strategic thinkers.
Wayne Gretsky was once asked what he thought accounted for his success. He recognized that he wasn’t bigger, stronger or faster than most of the people he played against. Gretsky believes what made the biggest difference was that most players were always going where the puck was, while he always tried to go where it was going to be. This is a classic example of strategic thinking.
Top managers realize that in order to be successful, they first have to decide what they want to accomplish and then let that determine how they go about doing it. Strategic management is all about anticipating, adapting to, driving and capitalizing on change.
Most farmers are good at tactics and operations. If they weren’t, they wouldn’t still be in business. While these tasks need to be done, there is a distinct difference between operational and strategic thinking.
Consider the example of building something. The operational manager says these are resources, skills and tools I possess, now what can I build with them? On the other hand, the strategic manager determines what it is he wants to build, then he decides what resources, skills and tools he will need in order to build it. Strategic managers also recognize that they need a business model which supports their objective and that may be very different from their industry norm. It’s all about the difference between doing the right things and doing things right.
Many people who have failed were doing something very well and working very hard, but what they were doing was no longer relevant or what the market wanted. To be successful, you first have to be doing the right things.
2. They see things from a systems perspective.
The issues surrounding identity preservation, food safety and patented technology are putting increasing pressure on all of agriculture to move in the direction of coordinated production systems. While traditional producers tend to resist anything that involves giving up some of their independence, the most successful farmers I know are looking for opportunities and are proactive in developing relationships. They’re concerned that in the near future a lot of farmers are going to find themselves on the outside looking in, with access to markets and proprietary technology cut off when processors and retailers reach the point where they’re working with only qualified suppliers. A major bioterrorism or food safety event could accelerate this trend.
The managers who are best able to adapt to these changes are those who see things from a systems perspective and look at their farming operation as a biologically-based manufacturing plant. That understanding makes it easier to see how things fit together both within the business and across the value chain.
Most of the inefficiencies and risks occur at the interfaces between the stages, say between packers and livestock producers or grain producers and end users. It also means that many of the economic opportunities and advantages lie in reconfiguring and coordinating the steps in the process. This includes such things as improving alignment, combining steps, standardizing operating procedures and shortening transmission time through better and more open communication.
Unfortunately, too many people tend to change only when they feel the heat, rather than because they see the light.
3. They recognize opportunities and the importance of timing.
A top manager from Illinois says that one of the things he has learned about producing specialty grains under contract is that the moment he gets one contract, he needs to be looking for the next one. Within three years so many other farmers will be competing for the business that the crop becomes just another commodity.
Top managers are opportunistic, because they recognize that in business and in life, timing is everything. Timing doesn’t relate just to knowing when to get in, it also deals with knowing when to expand, when to cut back, and when to get out or redeploy resources elsewhere. In fact, one of the key points in the book “Good to Great” is that the best companies spend as much time analyzing what to stop doing as they do analyzing new opportunities. Both entrance and exit strategies are going to become even more important as the rate of change becomes exponential rather than linear. Management experts call those moments at which sharp growth or sharp declines occur tipping points.
Unfortunately, the average farmer tends to jump on the bandwagon after the early adopter profits have already been made and then frequently doesn’t get out until he’s forced to.
The main difference between the top 10{e7e4ba4d9a3c939171d79cae1e3a0df1d41e5a91c3c4158fbb92284b490bc9d3} of farmers and the rest of those in the top 25{e7e4ba4d9a3c939171d79cae1e3a0df1d41e5a91c3c4158fbb92284b490bc9d3} is almost entirely a result of timing.
Remember, even if you’re on the right track, you’ll still get run over if you sit there too long. The right decision is the wrong one if it’s made too late.
Next month I’ll wrap up this series with a look at four more attributes that distinguished TEPAP’s class leaders from their peers.
Editor’s Note: Danny Klinefelter is a professor and extension economist with Texas AgriLIFE Extension and Texas A&M University. He also directs The Executive Program for Agricultural Producers (TEPAP), a management short-course for farm producers held each January, and its alumni association, AAPEX. For information about a $2,000 DTN scholarship to attend 2012 TEPAP go to http://tepap.tamu.edu
© Copyright 2011 DTN/The Progressive Farmer, A Telvent Brand. All rights reserved.
Posted with DTN Permission by Haylie Shipp
