Your farm will regenerate and reinvent itself to thrive in a changing world. Building commitment and alignment between the family and the business is key to a lasting legacy.
Written for MILK and originally published in the Nov/Dec 2022 issue.
Farms, and dairy farms, in particular, require constant reinvestment. But reinvestment goes far beyond just dollars and cents. It also requires personal and emotional reinvestment for each generation. Without both financial and emotional reinvestment, the farm will eventually cease.
Firms have used strategic planning in one form or another for decades. In years past, when farms were smaller and less complex, planning was fairly simple. For example, if dairymen wanted to expand, they met with their banker, shook hands, and bought more cows. It was a little more complicated than that, but probably not far off. Fast forward to today, and the farms are more complex. More family members and employees are involved, and financing is no longer done with a handshake. The stakes are higher all the way around.
Families must have confident eagerness to commit not only their money but also their time and their futures for the sake of the family farm. These are significant commitments. Motivating the family requires a compelling vision and a shared family dream to which everyone is committed. Only when these commitments are clear and in alignment can the family aggressively invest their hard-earned capital back into the business strategy.
There are many challenges in getting and keeping the alignment of emotional investment in a family farm from generation to generation. When successful, it's seldom an accident. Deliberate planning is one key to success. It creates motivation to sustain the family farm when the inevitable personal differences and business challenges arise. Good planning and consistent execution release powerful energy the family can use to fulfill the dream of sustaining and growing a healthy family farm for the next generation.
Alignment and Commitment
While the outcome of strategic planning may be a spreadsheet, several documents and graphs, and a seven-year capital expenditure plan, the purpose of strategic planning is to build alignment and commitment for the farm's future.
There are several tools of strategic planning, but communication is essential. Alignment and commitment are built when the owners, the next generation, and other stakeholders have their dreams, concerns, and ideas considered. We've found that when people's voices are heard and considered, they will likely support the decision even if they don't "get their way."
Strategic planning often seems threatening to farmers, and it's completely understandable. Many think of planning as a straitjacket that constrains their instincts and limits business flexibility. The planning process also requires independently-minded owners to share decision-making with others in the company and across generations. This represents power and information that many owners would rather keep to themselves. Yet if owners want to build the family farm legacy, it takes reinvestment of energy and capital. Sharing the strategic planning process is just what's needed.