SUCCESS STRATEGIES: Which team are you on?
By John Ellsworth
Do you recall the points with which I concluded my last article (“The five factors guaranteed to impact your future,” August 2013 DairyBusiness West)? Referring to those five factors, I stated:
“Take these factors seriously and you will be rewarded for your efforts. Ignore them at your own peril. My experience with many clients is that taking these five factors under strong consideration has yielded them measurably better results. They will provide you with the ammunition you need to question items that you believe are either wrong or outdated, and more importantly, take the steps necessary to achieve greater levels of success in your business. Guaranteed!”
I would like to take this thinking process further by discussing two types of producers: One is on the “A Team,” and the other one is on the “B Team.”
First, I want to be clear that since 2009, I understand the dairy industry has been difficult. As a financial consultant to many dairies, I get to see this firsthand. However, it’s a new year, and cash flow and profitability have bounced back in comparison to the past several years. If you are not already feeling this improvement, I suggest you explore why that might be the case for your business. Are you feeding too many heifers? Are your expenses out of control? Are you carrying excessive levels of debt?
Let me provide some points of comparison for these two teams, because there are consequences involved with both:
1.) The managers on the A Team have a definite plan they follow closely. Of course, they adjust their path occasionally, but for the most part they stick to their plan. Why? They do so simply because they spent a lot of valuable time with key advisors developing a plan taking them closer to their desired objectives.
Does the B Team have a plan? Certainly. They have even considered getting it out of the file drawer to review it once in a while. They just haven’t found the time to check it again, so sometimes they get off course.
2.) The A Team knows precisely where they are on a day-to-day basis in terms of herd health, milk production and reproduction.
The B Team has considered collecting this information, and maybe even putting together a daily summary report for their entire team, but they barely have enough time to keep the bills paid and meet with their banker regularly. Their nutritionist had suggested this, but they decided he just represented another cost they could not afford.
3.) Members of the A Team seem to have a solid handle on their costs. They get surprised sometimes, but it’s not because they are asleep at the wheel. They adjust course and may substitute one product for another. However, this is never done blindly. They discuss it with the appropriate advisors.
The B Team, on the other hand, keeps a close watch on their more successful neighbors. If they are trying something, it might be worthy of consideration, no?
4.) The A Team makes a lot of money farming, even with the high feed costs we have seen the past several years. They invest farming funds carefully, and, as a result achieve solid yields, leading to stronger profitability.
The B Team? Well, it’s not really their fault. They would have hit better yields, but they couldn’t get their crop advisor or the fertilizer company to come out because their account balance was large and past due 120 days. However, as I mentioned earlier, they don’t feel it is their fault.
5.) Finally, members of the A Team are very teachable. They have been in business for a number of years, but they realize the industry has changed. They realize they must change, too.
The B Team? Their leader exclaimed to one young advisor that, “If he followed every recommendation he had received over the prior 20 years and they had all worked as planned, his cows would be producing 120 lbs. per day.” Sounds like it may have been worthy of consideration, in comparison to the 62 lbs. per cow per day he was currently hitting.
What’s the message for us as managers? First, we need a solid plan. Second, we need to follow it and adjust course as needed, because none of us has a crystal ball into the future. We also need to realize that all of our decisions (or lack of them) have consequences. They can also impact our credibility with vendors, bankers, business partners and other key players, all of which will have consequences.
Which Team do you want your operation to represent? My money is going to be on the A Team!
John Ellsworth of Modesto, Calif., is a consultant with the financial and strategic consulting firm Success Strategies. He can be reached at 209.988.8960, or by e-mail: email@example.com. Visit www.success-strategies.com. To learn more or to acquire a copy of his new book, The Five Factors Guaranteed to Impact Your Future go to: https://www.createspace.com/4336264