As family farm owners consider the idea of succession planning and passing down the family farm, it is helpful to understand that succession planning is really a subset of strategic, or long-term, planning. One result of strategic planning is for you and your business to develop a sustainable competitive advantage. What is it that sets you apart from your competitors and will allow your family business to achieve long-term above-average performance so that your business can survive and thrive into future generations?
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Management!
While this seems obvious, the combined decisions that you and your team make over years and years and years, make the difference in the overall performance of your family farm.
Better Decisions = Better Results. Well duh! |
Generally speaking, better decisions come about from having better information. Better information is more accurate information. Accurate information comes from well-designed data collection practices. Communication, discussion and analysis of this data provides you feedback for your past decisions. Years of feedback is called wisdom. A routine, systematic way of collecting information, sharing it, making decisions, getting feedback and evaluating past decisions is called a management system. A systematic approach to management decisions improves the long-term sustainability of your business.
Sys-tem. Noun \ˈsis-təm\
: a group of related parts that move or work together
: a regularly interacting or interdependent group of items forming a unified whole
: a coordinated body of methods or a scheme or plan of procedure, an organizational scheme
: any formulated, regular, or special method or plan of procedure
This is the soft, warm, fuzzy, hard to see immediate results side of business ownership and farm management. Normally, you see immediate results from your actions. You plant seeds and a few weeks later, they sprout. What I’m talking about here doesn’t provide immediate, positive feedback. If often takes months to see gradual improvements and years to see significant improvements. But what the heck, you have some time before you or dad retire…so time is on your side to improve your business and the odds for its ability to provide consistent, above-average financial returns and good memories for generations.
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By building a solid foundation first, a structure has a better chance of surviving inclement weather and disaster and the mistakes that always seem to happen at the worst time. The same for your business -- it needs a solid foundation on which to build, grow, develop and fine-tune for increased chances of long-term success. Some of the areas we will explore together to develop a farm management system for you begin with the foundation and are fine-tuned from there with each moving part. These farm management system areas include:
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