Super Bowl Management Quality

Super Bowl Management Quality

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They should have seen it coming.

Didn’t some pundit declare something like a 99.9% chance of a Falcons victory with about 8 minutes left in the game? Somebody please clarify if that was actually the case.

A rather pompous thought that I kept to myself while watching Super Bowl LI, after Atlanta took a 28-3 lead, was “Brady’s just smiling at the bigger point differential that he’ll get to cover on his way to a win.” In hindsight, that comment would have been brilliant…had I actually said it.

They should have seen it coming.

Yes, it is easy to prognosticate in hindsight, but that’s not the point here. What did it take, what did the New England Patriots do to win another championship, aside from setting 24 new Super Bowl records and tying 7 others?

  1. People
    Bill Belichick has been the head coach of the New England Patriots for 17 seasons. He is in the top 5 winningest coaches in NFL history.
    Tom Brady has virtually cemented his place as the NFL’s greatest quarterback of all time. Based on the last 17 years of performance, he was a steal in the 2000 NFL draft, going in the 6th round (199th)
    The rest of the team contains very few “superstars,” yet when their superstar QB was suspended for 4 games to start this season, the team went 3-1.
  2. Management
    This starts at the top with vision. In the five seasons before Robert Kraft bought the franchise in 1994, the team was 19-61 (a .238 winning percentage). In 1994, the team made the playoffs, and did so 4 of the first 5 years under Kraft’s ownership.
    Management’s plan clearly put great emphasis on people. Since Kraft took ownership, the team has only had 3 head coaches, with Belichick, the current head coach, being in place for 17 of 24 seasons of Kraft ownership. The team is part of a privately owned family enterprise.
  3. System
    What words could you come up with to describe the system that has propelled, and maintained, team success for so many years, including the greatest comeback in Super Bowl history? Many had felt that the game was over at half-time: no team has ever come back to win the Super Bowl from more than 10 points down, Atlanta was dominating both sides of the ball (offence and defense,) and New England was making mistakes (turnovers, dropped passes, missed kicks.) Yet, the Patriots found a way to win. They had a system, and stuck to it, never giving up, never quitting. It would have been easy to deviate from their system in the face of such adversity; it would have been easy to lose motivation under what was deemed to be an insurmountable deficit.

The New England Patriots are by all accounts a highly successful business. How does your business compare? Can you reach top decile?
People: do you have the right people in the right place? It does not matter if they are family members or not, evaluate everyone, even yourself.
Management: does your management team have a vision and a strategy to achieve results that would put you in the top 10% of comparable businesses?
System: have you developed systems that are proven to work year in and year out, providing you with dependable efficiency and results? Or is every year a new roll of the dice?

Management has a vision, they put the right people in place, and everyone executes the system.

To Plan for Prosperity

Set yourself up for success. Model your business, and your approach to business, after other successful enterprises. We may not be New England Patriots fans because we envy their consistent competitiveness and success, similar to how we may not be oozing with adoration for the most successful farms in our area, but doesn’t that make them a great model to follow?

For the record, I’m not a Patriots fan, I am (at best) a casual NFL fan. I was actually hoping Atlanta would win Super Bowl LI (for no specific reason,) but I’m not disappointed with the outcome; it makes for some great storylines and it forces everyone to admit some admiration for an enterprise with the success rate of the New England Patriots.

tepap-logo

Greetings from TEPAP

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The Executive Program for Agricultural Producers has been described as “a farmer MBA.” Born over 20 years ago at Texas A&M University and the brain child of Danny Klinefelter, TEPAP has helped numerous farm managers and operators improve their businesses in ways they never considered before.

In Session 1, there is Canadian representation from New Brunswick to BC, with the heaviest concentration from the prairies. The US is widely represented from all 4 corners (Washington, California, Florida, and Vermont.) There are 2 participants from Australia.

Everyone has a unique reason to want to better themselves and their business, yet the theme around the room during introductions was similar. Even the Aussies remarked at how the only difference in what they are hearing this week compared to back home is the accent.

Prosperity is at the root of everyone’s reason for seeking improvement. Consider these 3 facets of your life and business when determining where and how you want to be better.

Communication in Business (or with Family)

As Elaine Froese likes to say, “It’s never a problem until it’s a problem.” Why not sit down with business partners, family members, etc, to clarify the issue, and set a path for resolution? We know that the answer is “because it isn’t that easy.” But just because it isn’t easy is not permission to avoid the situation. Consider this: if expectations aren’t being met, and no one is talking about it, you’re setting up for a train wreck! I captured a quote from Dick Wittman this week: “The biggest mistake we make in family negotiation is assuming what’s going on in everyone else’s head.”

Are you ready to seek out the resources you need to help you have the talk?

Financial Knowledge and Management

Every day, I learn more about improved methods to gather, analyze, and manage information, all so that better decisions can be made at the farm. The resources available to farmers today are greater in number and scope than ever before. I have gleaned new process to help determine the age old questions of “rent versus buy farmland,” and “what is the actual ROI on that piece of equipment?” I am eager to use these new tools with clients as soon as possible.

What gaps do you have in your current financial knowledge and management that need to be addressed?

Life Balance

No longer are we calling it “work-life balance” because you don’t have two lives, you have one…and it needs balance. If you are out of balance, have you considered why? The TEPAP faculty recognizes that the participants in the room are overachievers, who, statistically, find it easier to work than to play. This is a challenge for anyone who has the level of passion for their business and industry that most farmers do. What we must acknowledge is that this can often be a challenge for the families of said passionate farmers too.

How have your priorities changed over the last 3 years? Are you adjusting with the changes life brings, or staunchly entrenched in old habits?

To Plan for Prosperity

It’s been said that lifelong learning is one of the key tenets to achieving the life we want to live. And our businesses must keep growing to sustain themselves. It need not be learned, achieved, or practiced all at once. Improvement is a process. You can’t eat a whale with one bite, so start small with some important goals, and then do the hardest part: take the first step.

change

Critical State – Unwilling to Change or Adapt

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As we prepare to close out 2016, let’s look at change. No, not the coins in your pocket; no, not swapping your attire.

We change

  • when we see value (Eg. switching to minimum tillage practices.)
  • when we are forced (Eg. a health scare.)
  • when the pain of staying the same is greater than the pain of changing (this is hard to quantify because there is comfort in the familiarity, not matter how painful.)

change-venn

Value:
Change to achieve value is easy. We see benefit to doing something different, and we implement change. Although, this is incredibly difficult to define, and can be as diverse as each individual person’s opinion of “value.”

Forced:
Sometimes we get feedback from our doctor, or our banker, that is bleak, stark, or harsh. If we do not change X, we are certain to face Y. If Y is scary, unimaginable, or intolerable, the change to X is usually made pretty quick.

Pain:
Pain is subjective. And it has been found that pain tolerance can be surprisingly high if it means avoiding change.

Look back at 2016, and few years prior to that as well, and consider what drove the change(s) you made:
PAIN isn’t what drove you to acquire a new pickup. Neither was it FORCED. So what was the VALUE?
Was there FORCE or VALUE that led to a plan to improve working capital?
Was it VALUE or PAIN that led to having hired help on the farm?

Determining the factors that brought about the change(s) you are evaluating is a worthy, albeit difficult, exercise. Once we understand what it is that motivates us to change, not generally but specifically, we can use that understanding, that knowledge, to make better decisions.

Direct Questions

What is the most common theme for the changes you’ve made in your life and in your business: value, force, or pain?

Significant changes are easier to evaluate. How do you determine what leads to small changes: value, force, or pain?

How has the fear of change cost you, personally, financially, or otherwise?

From the Home Quarter

Charles Darwin is often credited for saying, “It is not the strongest of the species that survive, nor the most intelligent, but the one most responsive to change.”
Danny Klinefelter is quoted as saying, “The future will always belong to those who see the possibilities before they become obvious.”
Kim Gerencser is quoted as saying,”(Business) cycles will hurt some, but offer opportunity for others. The difference between who suffers and who prospers is who’s ready.”

Change, like 2017, is coming whether you’re ready for it or not. Buckle up!

2016 year end review

Reviewing 2016

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We often get so focused on process that we fail to stop to take a look back now and again. If you feel like you’ll never reach your goal of <fill in the blank>, take some time for review to see how far you’ve actually come.

Where were things one year ago? If you were like most, you were highly optimistic about the potential of 2016. While durum was still troubled by fusarium, there was tremendous, widespread excitement to climb abroad the lentil train! After an usually warm and dry winter, from one of the strongest El Ninos ever recorded, the concerns of a potential late and wet start to seeding were quickly cast aside.

The way 2015 started out (with multiple late spring frosts) you might have been cautiously optimistic about the 2016 crop, even though it looked like it was setting up for a repeat of the 2013 record yield. Diligent pesticide applications meant to protect this potential boomer of a crop may have worked well, unless we’re talking about chickpeas and durum. The rain didn’t allow for the desired warm dry autumn, and the 2016 harvest literally became a marathon. While I haven’t done any calculations, I’d be placing my money on an approximate 70-75 day average harvest duration in 2016.

Yields were all over the map, and this has again kept many income statements looking tight. There were far too many discouraging sides to crop rotations everywhere, and many of those farmers who tore up their long term crop plans to chase big returns are feeling a little sore. Fertilizer prices dropped in the summer and stayed low most of the fall, allowing those farms that have strong working capital to buy their 2016 fertilizer cheaper than they have in recent memory. Saskatchewan reelected its government; Manitoba voted in a new one. And we found ourselves gobsmacked by goings on leading up to the US election.

And so, in looking back over 2016 we want to focus on progress, innovations, shortcomings, and of course, lessons learned over the last 12 months.

Direct Questions

What progress did you make on your long term goals? Short term goals?

What innovations did you employ this year?

How have you evaluated results to determine their success or failure?

From the Home Quarter

There was a pointed competitive advantage described in the article above; did you pick it out? In a business that produces commodities, you need to create every advantage possible to give your business the best opportunity for sustained profitability.

Where did your business fall short of expectations in 2016? Where did it exceed? What did you learn from it, and what will you do different?

Does this sound familiar? I wrote something very similar a year ago. One year later, it still applies.

Over-Optimism (a.k.a “It Can’t Happen to Me”)

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Recently I’ve sensed great concern from some bankers regarding the effects on the cattle market because of this TB outbreak in Alberta. The effects are still not definitive but could prove devastating.
The fallout from this recent harvest in western Canada is still being measured. Creditors are in full disaster preparation mode so as not to be bombarded by voluminous delinquent payments over the next 5-6 months.

A valuable part of the work I do is to help clients make capital expenditure and credit decisions. After a number of difficult crop years from excess moisture, many farms have great concern over their financial stability and fully recognize that they have very little room for error. Pains are being taken to consider how every decision could affect the farm’s future profitability.

Many long term business decisions have been made on the premise of $12 canola and $8 wheat, or $2/lb weaned calves (as a kid, I sold my first calf for $0.80/lb.) Servicing debt on land and/or equipment payments during the high points of the cycle is easy, but as we’ve seen, the debt often outlives the business cycle.

Some farmers, especially those who are relatively new to farming, have never experienced tough financial times. They have no first hand experience of BSE or the 2004 frost; they know little outside of high yields, good quality and strong grain & cattle markets. Sadly, there are many who have first hand experience of those dramatic market influences yet have permitted themselves to have short memories.

I remember giving a presentation in 2013, in a community I won’t name so that I don’t shame them, where the audience was verbally angry with me for stating that we were a “global average crop, not a bumper crop but an average crop globally from $9 canola and $4 wheat.” They thought I was crazy because, in their opinion, canola had a new floor price and it was $12.

Regularly I am forwarded an article from some US agency (it varies week to week depending on who is forwarding it to me) that provides insight into the rapidly decreasing appetite for risk into grain farming from US lenders, or the sizable decline in land rent rates, and the reduction in land values. I often tweet these articles with the question, “Does anyone think this can’t happen here?”

I am encouraged by a shifting focus among farmers that centers more on ROI (Return On Investment) and less on size & scale. It bodes well with a saying (it’s not mine) that I like to lean on: Better is better before bigger is better.

Direct Questions

How do you view risk and its potential to affect business results when making business decisions?

Have you considered how a major market shock could affect your profitability, and if so, what have you done?

If your profitability will be sub-par in 2016, what adjustments are you planning to make for 2017 and onward?

From the Home Quarter

While no one can deny that “things are different now,” there is still much we can learn from history. Maybe the most important lesson from history is that major business-impacting events are very unpredictable. As such, maybe we should be more prepared for the predictable events so that the unpredictable ones aren’t such a major shock…

ready-for-harvest

Change, Risk, and Fear

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Change brings risk. Risk brings fear.

 

“Risk and the appearance of risk aren’t the same thing.

In fact, for most of us, they rarely overlap.

Realizing that there’s a difference is the first step in making better decisions.”

Seth Godin’s Blog – Apr 18, 2016

 

Change is the only constant in life. Charles Darwin is often credited with saying, “It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is most adaptable to change.”  There is no question that when it comes to production practices, farmers’ ability to change is very apparent.

Now if that would only apply everything…

There is a change on the horizon that almost every farmer will face: how to adapt to life when he or she is no longer farming. That tune has been sung, and will continue to be sung until the message gets through. Yet, by the relative inaction of most farmers to address succession, or transition as it is often called, it is easy for those of us beating the drum to ask, “Why aren’t they getting the message?” I’m less sure that the message isn’t getting through; I’m more convinced that it is the act of facing change that harks fear into the farmer.

Risk, on the other hand, is something every farmer has an appetite for. Without it, one cannot farm. The act of dryland grain farming in its simplest form carries more risk than most non-farmers could even comprehend. Contrast that to the risk that many farmers take in relation to cash flow and debt, and I have to question their comprehension of risk.

One will not fear what one perceives as zero risk. Lacking appreciation for the financial risk from decisions that will strain cash flow and debt levels is why there is little fear of that risk. Lacking action on addressing farm transition is based on a perceived risk.

“Risk and the appearance of risk aren’t the same thing.” The financial risk that many farms put themselves in stems from the LACK of the appearance (inability to fully grasp) of risk. The avoidance of the farm transition discussion is a result of the appearance (created in one’s own mind) of risk. In both cases, the real risk is not considered, but the appearance of risk, or lack thereof, is given full credit.

Direct Questions

What is the REAL risk of farm transition activities? That the next generation won’t do it as well, or the same as you…? (HINT: your dad felt the same way when you took over and you did just fine!)

If you believe a risk does not exist if you do not acknowledge it, explain how that same theory would work with your spouse or children?

Fear is a very real motivator, or demotivator. How do you go about understanding the risk to mitigate the fear?

From the Home Quarter

With change, there is always risk. Risk has an effect on everything we do, whether the risk is real or perceived. The fear of negative (or undesirable) outcomes can be crippling. It is easy to see how change can bring immediate crippling fear now that the connection has been made.

Change the way you look at risk, and you’ll have less to fear.

 

Crop Failure

Critical State – Crop Failure

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Do you have the financial strength to survive a crop failure?

Considering that most farmers are still primarily production focused, there is likely no greater catastrophe in their mind than a crop failure. With Mother Nature offering challenging conditions every year (even 2013 which had a strong majority of farmers enjoying “the perfect growing season,” there were still many areas that faced insurmountable weather challenges) one would think that prudent risk management would involve many of the following strategies, each with a prescribed weight based on each farm’s specific need.

Provincial crop insurances, Agri-Stability, private revenue insurance, hail insurance, etc. are the most popular risk management tools used by farmers today. Most farms use one of those, or a combination of several. Each farm’s weighting of the various programs will be as unique as each farm. However, many farms use none of these risk management tools. They will each have their own rationale for why. Some are so well capitalized that they can self-insure, take the financial hit from poor production and keep on rolling. Others do not understand how the programs work, and because of their ignorance, they choose not to take part. In the middle is the majority, broken into two parts: one that clearly understands the nuances of each program, and utilizes it to the fullest, most prudent extent (which might mean not using them at all); the second does not bother to gain such understanding and simply does what’s always been done year after year.

There are four distinct factions described above in how many farmers approach risk management. Which one do you fit into?

  1. Well Capitalized, avoids using the programs: you have abundant savings and working capital to withstand more than one year of zero, or near zero, gross revenues and choose to eliminate the premium costs for risk management programs.
  2. Lacking full comprehension of programs, avoids using the programs: you feel that they are too complicated, too expensive, and never pay you.
  3. Intimate understanding of the programs, uses (or does not use) the programs to the best net benefit to your farm: you know the ins and outs of the program(s) better than anyone who answers phones at the respective help desks. You carefully weigh premiums, coverages, and benefits with precision so that all match beautifully with your production practices. This may include not using the programs because the cost-benefit is not sufficient.
  4. Not bothered to learn about program nuances, uses (or does not use) the programs because “that’s what we’ve always done”: you don’t have time to read through the acres of lingo and jargon that are provided to you, so you just blindly take the same coverage you’ve always taken, or not taken any coverage at all. “Just go with what we did last year!”

Of course, these groupings ignore the geographic issues in that, for example, some farms span so many miles that a hail storm is incredibly unlikely to affect the entire farm, some farms are so large that program premiums can represent a small fortune, and some farms (large acres or not) are in such tight proximity that weather risk cannot be “spread out.”

Direct Questions

Which category above do you fall into? If it is #2 or #4, what is your risk management approach?

Do you prefer reliance on risk management programs over building strong working capital? Why?

Production is critically important. How do you manage the risk of crop failure?

From the Home Quarter

Farming is risky business, and the risk of losing a crop can bring a farm to the point of Critical State. How we manage the risks, and in this discussion, the risks pertaining to crop failure deserve attention that is paramount. What certainly gets most of the attention when it comes to managing the risk of a crop failure is inputs. And while there is no arguing the importance of doing all you can to produce the highest yield and best quality crops, there is more to the equation. Much of what will bring success or failure to your efforts in production is out of your hands.

The only way to get off the train of risk management programs (and cash advances, and trade credit, and operating credit) is to build abundant working capital.

You cannot shrink your way to greatness and you cannot spend your way to prosperity.

Overspending

Critical State – Overspending

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Cash in the bank is a good thing. Spending it because it is there is the scourge to many farm’s financial strength.

Years ago, when I was still in banking, I was doing what can be argued young bankers should, or should not, do…I was listening intently to some well tenured, long-in-the-tooth bankers. It was good because of the insights they brought. It was not good because of the cynicism they had. One cynical comment in particular stayed with me; it was when that grizzled old banker said, “Farmers hate having money in the bank…as soon as it’s there, they go spend it!”

Maybe that comment showed his lack of insight into how a farm business is run. Maybe he was fairly accurate in his conjecture in how it relates to the psychology and mindset of a farmer. Although, I believe that “hate” is the incorrect descriptor for how farmers really feel about cash.

You may recall reading Spending Less is More Valuable Than Earning More in this commentary a few months ago. I regularly read comments in ag publications and on Twitter about how “farmers are good at making money, but trying to keep some is the hard part.” Not for everyone…

Investing in your business is something not to be taken lightly. Every year, month, week, and day, farmers battle with the decisions of what to grow, how to fertilize it, what to spray, when to spray it, etc. With almost the same frequency, many farmers are also looking at the tools to get the job done (ie. farm equipment.) “Newer, bigger, better” seems to be the name of the game when it comes to equipment. And less frequently, farmers consider expanding the land base. Whether to rent or to purchase is but one of the questions pertaining to land.

It is my belief that the issue of overspending would not be an issue if more discipline was used in ensuring that all expenditures met an ROI (Return on Investment) threshold. I’ve learned about the following instances in the last year that clearly show a lack of understanding the concept of ROI:

  • disastrous chickpea crops despite as many as 6 fungicide applications (at $15-$20 each, that’s an extra $90-$120/ac in inputs)
  • $90/ac rent paid on 640 acres that has only 420 acres available in the entire section due to excess moisture (so he’s actually paying $137 per cultivated acre)
  • inability to make loan payments because the operating line of credit is maxed out.

I have gone on record many times in my prognostication that credit, specifically operating credit, will be difficult to maintain (and likely impossible to get) in the not-too-distant future. Those operations that do not run on cash, therefore relying on operating credit, will face insurmountable hardship when credit policy changes.

Control your own destiny:

  1. Build working capital reserves, specifically CASH;
  2. Discontinue relying on operating and trade credit to cash flow your farm;
  3. Sell your production when it meets your profit expectations instead of when you need to make your payments (cash in the bank allows you to do this!)

Direct Questions

How would you describe the rationale employed when determining how to deploy resources, specifically cash?

As a percentage of your annual cash costs, what is your minimum cash balance to keep on hand?

From the Home Quarter

In a business within an industry that is renown to have multiple cash and cash flow challenges, it is not unusual to learn that adequate (or abundant) cash on hand is not common. And so when cash is available, the need (or temptation) to upgrade this or replace that can be too much to handle. Disciplined decision making, backed by a sound strategy, is often the difference between successful, highly profitable farmers and surviving, occasionally profitable farmers. Which would you rather be?

For guidance, support, or butt-kicking in developing your strategy, and the discipline to stick to it, please call or email my office.

Goals and Strategy _corn rows

Goals and Strategy

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Never trade what you want most for what you want at the moment. It only leads to failure.

Those are profound words. While “failure” is not absolute, I believe in this perspective failure means “failure to reach your goal.”

What is your goal in business? What are you working for? Some business-people in primary production agriculture have defined their goals: one aggressive young farmer I know has made it clear that his goal is “to leave the land for the next generation in better condition then when he got it.” His desire for a newer tractor or more land never trumps his goal, and therefore his decisions reflect his goal.

I often speak to farmers who describe their goals as ” reducing debt” and “improving profitability” yet they trade those goals, whether consciously or unconsciously, for what they want in the moment (typically additional equipment)…which usually increases debt and can often have an adverse effect on short term profitability.

Does that mean the farm will fail? Does that mean the farmer is a failure? No. It means that there is failure is reaching the goal of reduced debt and increased profitability.

This leads me to circle back; ” What is your goal in business? What are you working for?”

We touched on this a few weeks back in Growing Farm Profits Weekly – Eat to Live or Live to Eat. It is no one’s place to tell you your goals are wrong. Just be honest with yourself about what’s really important, and expects results accordingly.

I work with farmers who acknowledge the need to have strong business goals that align with their personal goals. All of them are grateful to have some help to clear the air when making decisions and to take the emotion out of the equation. I have done the same in my own business: I have an advisor who I’ve hired to help me wade through the issues, and the emotional roadblocks, that could potentially affect my business.

Here are the Growing Farm Profits™ 3 Keys to Reaching Your Goals:

  1. Start with with a goal in mind, and set tactics later. Starting with tactics enters into a never-ending cycle.
  2. Plan for adversity, strategize how to adjust, and respond as required.
  3. Stay on course; get any and all help you need to keep from straying off the chosen path.

Direct Questions

What information do you need to allow you to clarify your business and personal goals? Who is helping you get it and sort through it?

Who do you lean on to help strategize when mapping your business and personal goals?

How do you manage the desire to trade what you want most for what you want in the moment?

From the Home Quarter

It is not unusual for farmers to get caught in the cycle of “head down, shoulder to the plough, get the work done, plant the crop – harvest the crop – sell the crop – repeat.” And after 20-odd years of doing just that, and finally looking up, most find that they’ve built something they never expected or planned for. Now facing the thought of planning for life after farming, many are asking “What now?”

Beginning with an end goal in mind is a critical key to successfully reaching that goal. Stay on course, and do not trade what is wanted most for what is wanted now.

failure to communicate

Critical State – Inability to Communicate

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A few weeks ago, we opened a dialogue on Critical State which is defined as “the point at which something triggers a change in the basic nature or character of the object or group,” or to paraphrase: something can be referred to as being in a critical state when at the point of significant change.

Inability to communicate is, in my opinion, the greatest single cause of breakdown in relationships of all types and sorts. While many other factors come into play, and often bear most of the blame, the primary cause is communication and its lack thereof.

There are virtually countless books, courses, and resources dedicated to improving communication in almost any circumstance: marriage, parenthood, employee, co-worker, sibling, etc. etc. I have only read a minute fraction of what is available on this topic, so I cannot offer insight as to which are most beneficial. But, like you, I have a lifetime of experience in communicating with others. It is fair to say that all of my communication experiences could use improvement, because to say otherwise would indicate that there was, at times, perfection in my communication interactions. Let’s be honest, there is always room for improvement.

Here are some of the most important relationships in your business that need solid communication:

Bankers/Lawyers/Accountants

Often times, when hearing banker-ese or legalese, we tend to not ask that which we do not know or understand for fear of appearing, well let’s say it, stupid. Many people have signed onto something that they did not want, nor did not understand because they were unable to communicate their questions, their fears, or their outright disagreement. The future ramifications of a lack of clarity in matters of borrowing or of law can be monumental.
When I was still in banking, I had a husband & wife client where the wife would apologize for asking what she called “stupid questions” about the terms and conditions of their borrowing package. She could have silently signed her name to the documents and fretted over her lack of confidence in what she just did, but instead she chose to ask. For her own clarity, her own comfort, and her own peace of mind, she asked. For that, I was grateful; it strengthened our business relationship. When I told them I was leaving the bank, she hugged me saying “I’ve never hugged a banker before!” I replied with a wink, “I’m not REALLY a banker; just a farmer who’s working at the bank!”

Employees

Everybody is rowing their own boat in life. It does your business no good whatsoever if your employees are not rowing in the same direction as you. Setting goals and expectations for your team, and sharing the overall business goals with your team can carry significant weight in efforts to get everyone “rowing the same direction.”
I’ve learned about a number of farm businesses that have taken the proactive approach: involve the team in goal planning, provide regular feedback, reward good performance. The most successful farms treat their employees not like employees, but rather like trusted partners who have a vested interest in the success of the business, and communicate with them accordingly.

Family and/or Primary Relationship

I will go on record saying that all “problems” in family and/or primary relationships will trace back to communication. Whether communication be the final straw or not, communication likely led to the behavior that became the final straw.
I was very impressed in meeting a young farmer earlier this year. When he came home to farm a decade or so ago, with his would-be wife, his father made clear with him and his non-farming siblings how the farm would transition. There was no ambiguity; no one could complain; there are no hard feelings today. Consider how things could be today when we acknowledge how successful this farmer now is, and how much wealth he has built in his operation…lack of communication could lead to unreasonable demands from family members, and the potential for critical state.

Direct Questions

Does fear ever affect your communication? How do you manage it?

How would you rate your ability to share positive feedback versus negative?

From the Home Quarter

Lack of communications, or an inability to communicate, will lead to critical state in a sneaky kind of way. If one doesn’t notice that communication is breaking down, over time it will snowball into a major issue. Everybody has a breaking point. It’s usually wise not to let things get that far, not matter which relationship we talk about.