Where do you want to be in five years? What will your business look like? Do you have a plan to get it there? Are you directing your efforts toward that plan?
At Managers Academy – hosted by the Professional Dairy Producers (PDPW) in Savannah, Georgia, last month – myself and a room full of agricultural business managers were challenged to stretch our minds and the direction we want to take our businesses in the next three to five years.
Each day, I find it easy to focus on the task at hand and worry about the things I know need to be done.
Dr. Allan Gray, who led the session on strategy, reminded all of us, “Just working hard can work you into not being in business.”
When we spend all our time working in the business, it is hard to see the business we need to be working on and what needs to happen beyond today to secure the business’s future.
“Strategy is about anticipating, driving and capitalizing on change,” Gray said.
As the executive director of Purdue’s Center for Food and Agricultural Business and the Digital Innovation in Agri-Food Systems Laboratory, he helped us understand the critical elements of a strategy statement and how it should be specific to each of our businesses.
A strategy toward efficiency is no longer a distinguishing factor in today’s industry.
“Just to be in this business, you have to be efficient,” he said.
Being more efficient in your operation only lets you run the same race faster, whereas strategic positioning is ultimately about choosing to run a different race by creating a unique, sustainable and competitive position in the industry.
“What you need to do is very different from what someone else needs to do,” Gray said.
Done right, it will align your business with your customers' needs in a way competitors cannot.
Start by figuring out where you are, as well as defining your customer and what their needs are.
For most dairy producers, their direct customer is not the end user at the grocery store but the milk processor who is purchasing the milk from the farm. What is it they want from you? What specifically are they paying you for? And, possibly, what is their business strategy and how can you align yourself with it?
If your processor pays a premium for lower somatic cell counts and you aren’t benefiting from a high solids count in milk, it would seem wise to set a strategy around cleanliness and worry less about getting more milkfat.
“You do not have the resources to be all things to all people,” Gray said.
By selecting where your focus fits best for your business, you can then develop strategic goals that, when accomplished, will lead to the accomplishment of the strategy.
Gray then said to identify two to three strategic objectives for each goal and the interim outcomes (key performance indicators or KPIs) that need to happen for the objective to be achieved.
You can also develop strategic projects that can be led by other team members in your business. Think of members outside your farm team – like nutritionists, veterinarians and other consultants – who could assist with these projects too.
With a good strategy in place, you can better set your daily tasks and priorities to intentionally move your business in the direction you want it to go.
I am excited to see what each of our businesses look like five years from now.
