Scaling up or even surviving in dairy requires three essential skills beyond being great at the technical parts of dairy farming, such as nutrition, breeding, etc. I will discuss the first skill – strategic thinking – now and expand on the other two in future articles.
Dairymen and dairywomen might shy away from the word “leader.” Few in the industry wake up, look in the mirror and think of themselves as leaders. Instead, they see someone dedicated to livestock, their family and the dairy industry. Yet, unless a dairy is run and operated by a single person, the owners are indeed leaders.
Running a dairy is challenging, even in good times. We are able to work with some fantastic dairies as they scale and transition to future generations. While every dairy and dairy family is different, I’d like to share three common traits we’ve observed on the most successful farms. These abilities are like a three-strand rope, reinforcing each other by allowing the leader to rise above the challenges of the current business climate. They work just as well, sometimes better, in poor dairy environments as in good.
Strategic thinking, self-awareness and strong communication allow leaders to be nimble and guide their teams and families, building a culture of collaboration.
Strategic thinking by definition is a mental process of setting goals and achieving them, sometimes in the face of great uncertainty and challenges. But this simple definition masks the nuances that make it so powerful. Strategic thinking anticipates future challenges, prepares to jump on unforeseen opportunities and aligns the farm’s goals. When done well, the farm becomes agile and adaptable while still staying focused on the basics.
The famous hockey player Wayne Gretzky once said, “I skate to where the puck is going to be …”
Strategic thinking doesn’t focus on what can’t be controlled as much as it does on what can be controlled. Strategic thinking isn’t about the weather, the current milk market or any of the important daily activities. It’s deeper and looks further out.
Strategic thinking is working on the business and putting in place the right building blocks. It’s also about looking for parallels and connecting dots where others see randomness. Here are some examples.
Milk market access is currently a hot topic as cooperatives and processors struggle with supply and margins. While this has been building for several years, it is a real problem. What does the future hold? A strategic approach would look at other parts of ag with processing constraints. Poultry, swine and beef are all examples of constrained processing that are many years old. Poultry went through these struggles decades ago. How have those industries handled it? What changes did the survivors make? Cross-pollination of ideas such as these is why our executive peer groups aren’t formed around a specific commodity. The best ideas often come by connecting the dots from someplace else.
Another example of strategic thinking is building the finances, people, culture and processes before building that new barn. Ensure that the basics are in place and working before expanding.
Maybe, in short, strategic thinking is the opposite of being reactionary. It is slowing things down, dedicating time to work on the business so you’ll be agile and ready when opportunity knocks. Like Gretsky, you’ll be waiting for the puck of opportunity when it arrives.
