Your dairy business needs a chief executive

People Power

by Robert Milligan


As the turbulence and chaos in the dairy industry and general economy make a slow – and likely painful – recovery, what lessons do we learn from the trauma?

The key answer is that every business, including dairy, must place a higher priority on leadership. I often refer to this as focusing more on “chief executive” roles.

The biggest challenge dairy farmers and owner/managers of other small businesses faced in the past several decades was the transition from being a worker to also being a manager. The greatest challenge today is to add the role of chief executive to manager and worker roles.

The following are three critical needs for every business. Each requires leadership – a chief executive.

1) Capitalize on opportunities and minimize threats.

Many of us were captivated by hockey at the Olympics, including the dramatic victory of Canada over the United States for the gold medal. Wayne Gretzky, one of the Canadians lighting the Olympic torch, is widely regarded as the greatest hockey player ever. When asked how he was so successful, Gretzky would reply that he passed the puck to where the teammate will be, not to where he was.

This analogy provides the essence of what a dairy business strategy must be going forward. Business leaders must gain the knowledge and insight to make strategic decisions based on the predictions and instincts about the dairy industry, the general economy and global conditions in the future. Only then can a business successfully capitalize on opportunities and minimize threats.

This focus – customers, industry trends, business trends, global changes – is why I believe the transition from manager to chief executive will be even more difficult than the transition from worker to manager.

2) Lead and develop a leadership team.

Increased expertise, along with the growing size and complexity of a dairy business, means leadership requires a team effort – a leadership team that includes owners, partners and managers. The transition from a single leader (sole proprietorship) to a leadership team can be incredibly valuable, but also very difficult.

Successful teams require synergy – the combined effort is greater than the sum of the individual efforts, or 1 + 1 > 2. For this to occur, the leadership team must have  clear direction and structures to enable the synergy to occur. Just as farm and other business processes require specification, implementation and improvement, so do leadership team processes.

I have developed several leadership team tools to assist in this transition, and can share them with you.

3) Hire, retain and develop an exceptional workforce.

Almost every manager acknowledges that everything in every business – from small to large – occurs because of people. Despite this acknowledgement, managers spend virtually all of their time developing and improving production systems and processes, and virtually no time proactively developing systems and processes to hire, retain and develop an exceptional workforce.

Two current factors create opportunity:

1) with the recession, incredibly capable workers are currently unemployed, underemployed and employed in jobs they do not enjoy; and

2) young workers, who have been the staple of the agricultural workforce, now belong to the Generation X and Millennial generations. Although many managers perceive these young people are unwilling to work, the reality is most are actually willing to work hard, but only in jobs they find rewarding.

The opportunity: Develop excellent hiring, performance management and continuing development systems and processes to attract and retain these workers.

The challenge: You face at least two difficult hurdles to become the leader your business desperately needs, and to meet the three needs described above:

1. Leadership. Chief executive functions must become a priority. Learning about the external environment, developing strategy and developing human resource processes is important. You must develop the discipline and structures to give the priority leadership requires. Developing the discipline to do this may require establishing times each day or week when – no matter what – you will work on chief executive roles.

2. Expertise. These roles are new to most of you. You may need to enlist the expertise of others. Remember that Fortune 500 executives have leadership coaches and economic advisors. We are available to discuss whether there are opportunities for us to synergistically and collaboratively work with you in these areas.

FYI

Robert Milligan, senior consultant with Dairy Strategies LLC, can be reached via phone: 888-249-3244, ext. 255, e-mail: rmilligan@trsmith.com, or website: www.dairystrategies.com.


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