Bloodlines alone are not a sole qualification for managing a multi-million dollar commercial farm, as DTN Farm Family Business Adviser Lance Woodbury writes in his column this month. Those whose business size or ambition demand professional standards need a skill set on par with the non-ag business world, he argues. In fact, one farming dad I know makes it clear his 35-year-old son must be better than he was in financial management because he will be the steward of a much larger enterprise that involves so many more land partners. The dad required him to get a masters degree and work off farm long enough to be promoted--twice!
Woodbury, a founding partner in the firm AgProgress, is a Garden City, Kansas, author, consultant and professional mediator with more than 20 years experience specializing in agriculture and closely-held businesses. Here's a conversation I had with him on his current column on "systems upgrades." We invite you to pose questions/comments/advice as well.
Taylor, DTN: Lance, in your latest column you mention “upgrades” to one’s personal skills, in particular self-awareness, vision and organization. What are the other skills that are often lacking in family business members?
Woodbury, AgProgress: Marcia, one of the skill areas that seems to often be missing is good supervisory skills, such as setting expectations, frequent corrective and/or positive feedback, evaluation and developmental conversation skills. I realize that many people dread “managing others,” but in order to grow your business, providing a good supervisory experience is critical to building a solid team. DTN's recent Labor Pains series, including tips about hiring a HR consultant, are definitely on track. Not everyone is a natural people person, but if you weren't born with the talent, get a coach.
I also frequently see family members return to the business right after college, without the benefit of spending time working under a non-family supervisor. That’s unfortunate, because we can all learn from being supervised by different people. Such variety helps mold one’s own sense of how to be a good supervisor—in addition to formal training through workshops or classes.
Taylor, DTN: Lance, Many of the skills you’re discussing are soft skills that involve communication. What are some technical skills people should focus on?
Woodbury, AgProgress: With today’s tight margins, having a solid understanding of financial information – cash flows, income statements and balance sheets – is critical. You don’t have to be an accounting graduate to understand financial statements. There are lots of books, and also a number of workshops such as Purdue’s Agribusiness Finance for Non-Finance Managers course that will help you better understand your financial picture. It’s even worth paying your accountant for a couple of hours to give you a crash course on financials, or your banker might walk you through the basics of a financial statement.
Along with financial statements, there are a lot of farmers who don’t fully comprehend basic risk management tools, and they are often hesitant to admit they don’t understand. Consider having a commodity marketing firm in to educate you and others about the basics of grain marketing. Not understanding the tools and how to use them can lead to missing opportunities or worse, making decisions that hurt the business.
And while not a “technical” skill, public speaking is something that more farmers and ranchers would benefit from in today’s food discussions. Dale Carnegie or other seminars can help you frame and communicate about your farm to the public. And if you are willing to reach outside your agricultural friends on social media, being aware of the latest social media tools and how to use them can enhance your engagement with an urban public.
Taylor, DTN: Ditto those suggestions, Lance. Another good place for farm successors to get introductory and in-depth management skills in finance and employee relations is The Executive Program for Agricultural Producers, or TEPAP. It can be an expensive tuition for two weeklong courses, but DTN and others offer scholarships. Go here for more details go to http://tepap.tamu.edu
Lance, it seems that this kind of skill-building takes a lot of self-motivation. How do managers and owners stay accountable to making these improvements?
Woodbury, AgProgress: Marcia, I encourage family businesses to consider two policies in their organization. One is that a workshop, seminar or educational experience like TEPAP is required for key staff members every year. The business will pay for the team member’s time and travel to participate. It could be technical training, agronomic training or leadership training. The point is that they take time away from the business to improve their skills.
Along with a professional development policy, I encourage businesses to find a way for people to come home and report their take-aways. What did they learn? What in the organization needs to change? What will they do differently? Make people accountable to sharing what they learned, so the whole company has a chance to benefit. Then a personal upgrade might turn into an organizational or system upgrade!
Taylor, DTN: Thanks Lance. The message I'm getting is that if you've been given the opportunity to run a family business, you have an obligation to continually improve your business acumen, so you can pass what you've inherited and built to another generation.
I'd be remiss if I didn't also mention educational opportunities at the DTN-Progressive Farmer's Ag Summit Dec. 6-9 in Chicago, where you'll be speaking. We've also got workshops on "Risk Management for Rookies," advice on "managing your margins," tips from professional human resource coaches and a pep talk from a (retired) three-star Army General on how to train yourself for leadership. For details and how to join us go to www.dtnagsummit.com
For alerts on DTN farm business coverage, follow me on Twitter@MarciaZTaylor
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