Growing crops and livestock is one thing. Growing your operation is another.
Even the most successful farmers find it challenging to manage a complex operation.
That’s because farming and ranching require one set of skills while managing a successful business takes a completely different set.
In the past, farms were easily separated by how well they managed production. Maximizing production separated the great farms from the mediocre. But the last couple of decades brought everything from the widespread use of artificial insemination, seed trait stacking, and GPS-controlled equipment. We are awash in the same data that helps drive decisions to maximize production. Today, good genetics are widespread, the rows are straight, and the fields are clean of weeds. Moreover, we all have access to the same technology that drives productivity gains.
We have access to the same things, but how we manage the business side of the farm is what really separates farms into levels.
Over the last fifteen years or so, we've observed farms behind the scenes and boots on the ground. We've come to the conclusion...
Farms move through three levels over time: Expert, Manager and Professional.
These are not hard and fast levels, but they are general groupings of farms by their management styles. If you understand where you are today, you can work towards the next level as you scale up or transition your farm.
Realize there is no "right" farm category. But many farms fall into the Manager category so let's take a deep dive into the pros and cons of this management style.
Traits of the Manager Level
These farms usually have between 4 and 15 full-time employees. Some may be family members, some are not, but either way, the farm is too large for one person to do all the work.
Most, if not all, of the daily decisions, run through a critical decision-maker, often the owner. The farmer typically keeps a list of the work that needs to be done and doles out the tasks day by day and hour by hour. It's a good strategy because plans can be changed on a dime, and the farm can quickly adapt to changes.
As the farm grows, it becomes hard to keep all the people and tasks aligned and pulling together. There are many instances where communication isn't excellent, and it's frustrating to employees and owners.
To get around this challenge, the farmer at the Manager level works beside their employees to keep everything moving. This means there isn't much time to work ON the business. Working on the business takes a backseat to the urgent tasks of the day. So, it's hard to build some of the structures needed to take the farm to the next level. Often office work doesn't get the attention it deserves, or it's done late at night when everyone else goes home.
This management style works well up to a certain size, but the cracks quickly show when the farm begins to scale up.
There isn't enough time in a day to get it all done, and there aren't enough good employees to get all the work done.
As the farm grows we often see employee turnover go up and employee quality goes down. Not only that, but there usually isn't enough time for the owners to create a system around finding, hiring, and keeping employees. It's a tough spot to be in.
Another trait of these farms is there is often family members working on the farm. This is not unusual as families run most American farms. What is unique is the family dynamics on a large-scale farm. Working with family is hard, and unfortunately, many farms find it hard to pull it off over the long term. We have all heard of neighbors not getting along and their farm legacy fading away. It's sad. In many instances, things could have turned out better with better planning and communication.
How to move to the Professional Level
No doubt about it, Managers are successful. Still, in many instances, they feel stuck at this level until a couple of key things happen.
Let's look at what the Professional Level does and what they did before moving to the Pro level.
It all comes down to the Right People and Delegated Outcomes.
The Right People
Farms can't scale up without the right people all working as a team. Pro's realize that employees often don't work out, not for what they don't know but rather for their attitudes, traits, and habits. The Right People have the skills you need, but most importantly, they have the qualities and core values you need. Skills can be taught but behaviors and traits are ingrained.
- Pros are very clear about what they want, and they don't cut corners. If a person isn't a fit, they either don't hire them, or they let them go. Pros are passionate about building a team culture with only the right people.
- Most good people already have jobs, so they are always on the prowl for prospective employees they meet who fit the culture and are just good people. Pros realize that they will need to hire employees away from their current job, not just about money. So, they keep in touch with these prospects and have a process for keeping in contact even when they don't have openings. And Pros aren't afraid of hiring someone who is a great fit even if they don't have a spot available.
- Many new employees fall through the cracks, get discouraged, and leave. Pros do not leave new employees to chance. They have a defined process for hiring, onboarding, and retaining employees to ensure the new hire is adequately trained to high standards. A periodic employee review process is followed to ensure there are no undetected issues on the team or with the new employee.
- Pro's train and expect members on their team to be good communicators and work together. There is too much going on NOT to use good communication and conflict management skills.
Delegate Outcomes vs. Tasks
Delegation frees up the farmer's time. They no longer have to be interrupted constantly by employees seeking input and asking questions. Because Pros have the right people, they don't have to delegate tasks. Instead, they delegate entire projects, work areas, and outcomes. Instead of managing every last detail, they set the parameters and trust the employees to get it done to high standards.
But delegation is tricky because it’s a balance of keeping tabs on things while not micromanaging. One thing that works is what we call the Accountability Blueprint. This blueprint details all of the major work areas and their respective tasks. It also shows the names of the people responsible for those areas or tasks. This process helps your team understand how pieces of your farm management all fit together and how they fit into the picture. Most importantly, it shows everyone who is Accountable for the work. It sounds more complicated than it is, but it works.
When entire work areas and outcomes are delegated, farmers have more time to plan the next round of expansion, transition planning, better financials, or scaling up.
One of the Manager level challenges is not enough time to work ON the business side of the business.
When business owners work IN the business day after day, it hard to think of a way through some of the thorny challenges. There are too many interruptions to focus on solving long-term challenges. You are not alone with this. We have found farmers all over the USA and Canada are overcoming these same issues.
Sometimes it's good to get away and observe how other farms run. Discover what makes them successful.
For the right farms, a peer group can be the ticket that helps progressive farmers get a behind-the-scenes look at other successful farms. You can then use those ideas to move your farm to the next level, tame the daily whirlwind, or pass on your farm to the next generation.
By sharing concerns, comparing notes, planning strategies and discovering solutions, members of the Executive Farmer Network get the confidence and skills they need to maintain their momentum.
At Encore, we’re passionate about helping farmers improve their operations by developing management skills, gaining new perspectives, and planning for change. Whether you opt in to one of our peer groups or work through our business growth process we want you to be successful.