Focus on the Now – Is agriculture too focused on what’s coming to see what’s already here?
I don’t like to admit it, but I am a sucker for a good motivational post. I follow a considerable amount of entrepreneurial thought leadership, and on a Monday morning, I got pulled into a speech by Jeff Bezos on strategy.
“Focus on the things that don’t change; I very frequently get the question, what’s going to change in the next ten years? And that is a very interesting question, it’s a very common one. I almost never get the question, what’s not going to change in the next ten years? Build a business strategy around the things that are stable in time”.
This was an interesting concept for me.
I have presented numerous times and asked thousands of producers what is coming in agriculture over the next decade. We talk about autonomy, corporate farms, consolidation, and business practices around finance and capital. Very seldom do we ever focus on the now.
So, to break my norm, what if we focus on the things that don’t change?
Production
The act of growing grain in its simplest form has not changed. Yes, we have bigger machines, better nutrients, and higher yields, but to plant a seed and grow a crop is nothing new. Looking forward to food security and the industry of agriculture primary producer production, we will still need to grow grain to survive as a business model.
As a farmer today, you are bombarded with numerous products and technologies that are based on increased production. In fact, as a guy who is not involved in this side of the business, I am not sure how you manage all these decisions without ripping your hair out (which I have already done).
The ability to increase production is vital for cost management as well as revenue generation and this is no different today than it will be tomorrow. How much does it cost to put the seed in the ground, and how much does it cost to get it into the elevator? Everything in between should be the focus.
Will future regulations and policies influence how we accomplish this goal, most likely yes. But we know that the world needs to eat three times per day, and we are the only individuals that are currently able to fill this need.
Focus on production before you start focusing on autonomy, policy or consolidation. This is the base of your future growth.
Business
Whether farmers like it or not, they are CEOs today and they will be CEOs tomorrow. I use this term loosely as there is a sharp learning curve when it comes to business practices and the ability to manage multi-million-dollar farming operations.
The “inside voice” statement is that most farmers today are not qualified to manage the operations they have created through land appreciation and growth. It has worked up to this point, to say it will continue to work into future generations I believe is a stretch and a dangerous assumption.
Most farms need to focus on the business aspects of the farm. Whether it is people, processes, finance, or operations, all areas have been proven to be lacking across the entire industry. This is a simple place to focus as the capital cost of education and development of teams is nowhere near the price of a new tractor. People are often one of the lowest-cost investments farms can make today. They just don’t like admitting it as tractors don’t have feelings and behaviours to manage.
I am biased, I know. But I also call this biased experience and knowledge as I have seen two decades of farms where the business aspects have made minimal growth for most (and I have the data to back this up).
If you want to focus on the things that don’t change, well entrepreneurship, business ownership, and multi-generational farms are probably high on that list.
Family Dynamics
This one is coming out of right field. The interesting part is that I only partially believe that I am correct on this focus as I do believe the industry will start seeing more “corporate” entities that may be family-owned, but far from family-operated.
The thing is, with more than 180K farms in Canada, I am not sure family farms will ever truly “change” on the dynamics side. Yes, they will grow and consolidate and become much more complex, but they will still be family-owned and/or operated.
Even in the Hebert Grain Ventures operation, the main shareholders remain family members, and we have built a staff and leadership team around them. The dynamics of family still have a position even though the farm is 10X larger than it was a decade ago.
Focus on the family dynamics in business. How do you remove the emotion, how do you make proper business decisions, how do you properly achieve transition?
These are all questions we need to focus on today as these will not change in the future. There is too much wealth for every family farm to disappear, so we better learn how to make them feasible in the short and long term.
In the end, I appreciated the different view on strategic planning. I am always so focused on tomorrow that sometimes today is harder to manage. But for a lot of operations looking forward is difficult when you are being bombarded every day with complex decisions and high stress.
We already have a lot to deal with as producers, maybe we should get our own house in order first before trying to take over the world.
