This is Part Two of our series about the importance of having a mentor. You can read Part One here.
In case you haven’t noticed, I’m a hockey fan. I love to play it, watch it and now, I coach it. So, I love that my mentor and friend, Danny Klinefelter, quotes Wayne Gretzky when talking about farming:
“I skate to where the puck is going to be, not where it has been.”
According to Danny, we need more farmers behaving like Wayne Gretzky, pushing the limits and striving to improve by getting ahead of change in our industry, rather than being forced to change unwillingly. In order to have the bigger and better future we want, we have to build it. We have to play our game.
During the quieter months of winter, we should be reading, researching and planning how we’re going to get better, more efficient and more profitable.
It all comes down to mindset.
Danny taught me early on that you need to be open and willing to consider new ideas. Ask people for feedback and don’t get defensive if they poke holes in your ideas.
Create a network
As farmers, we often feel like we need to do things on our own, without the guidance, mentorship or support from others. We refer to it as “rugged individualism.” It isn’t possible to be really good at all the things required to run a successful business. If you need a certain skill set, go out and find it. Or, be open to joining with other farmers to share equipment, resources and knowledge. There’s certainly nothing wrong with being independent, but notice if it’s holding your business back.
It is recommended that 30% of the time we spend networking should be with people outside of our industry. Seeking other points of view is important so we don’t get caught in group think or regional and industry specific views.
If you’re not growing, you’re dying. I’m not sure who said it first, but it’s something Danny ingrained in us during our time at TEPAP and in our alumni group AAPEX (the Association of Agricultural Production Executives). Investing in your continuing education, whether it be a formal program, webinars, reading blogs, etc. is so valuable. Find out what’s happening in other operations or even other entrepreneurial businesses. You just might find you can adapt some of their ideas to your own business to help improve efficiencies.
“I always tell people who went through TEPAP, that half of what you learned wasn’t from the instructors, it was from the discussions with the other participants,” says Danny.
As farm leaders we must understand the farm’s most valuable asset is ourselves, what are we doing to ensure that asset is functioning in peak form.
Always be ready to pivot
Farmers have become very good at planning before the year starts, but many fail to monitor along the way. As the saying goes, “what gets measured, gets managed”. Many producers are just happy to have a plan, but they miss being held accountable to that plan. It is not until you start constantly reviewing, updating, and comparing results, that you find the true freedom of being prepared. With the large volatility swings in profits, commodity markets, interest rates, as well as the risk of policy and currency changes, farms today are constantly on there heels. Be agile and ready to pivot if conditions change.
A learning is that when you find your key farm metrics to track, you actually reduce the time required to make decisions. At HGV, once we created weekly and monthly scorecards, it reduced the amount of time I spent mulling over choices. By identifying these measures and constantly tracking them, you can identify issues before they happen, find answers to questions that haven’t been asked, and reduce the chances of the farm’s biggest risk – “not knowing what you don’t know”.
How do you score if you don’t know where the goalposts are? This is the main concept of benchmarking. To stick with the hockey analogies, a player on a frozen pond alone may look drastically different than on the ice against other skaters. Benchmarking in the agricultural industry supplies the other players. We can utilize metrics from other farms to compare against our own operations in terms of profits, operations, and efficiencies.
For something so important, this is also widely underutilized by most producers. Whether it be through our independent nature as entrepreneurs or the fact that many farms lack transparency in fear of competition, this concept is not at the forefront of agriculture. But it will be. You can be an early adopter and get ahead of the rest, or you can be late to the game and play catch-up. The option is truly yours if you want it.
The 5% Rule
Simply put, small changes can have big outcomes. As farmers, if we can make 5% improvements in price, production and expenses, we can have a 100%+ improvement in profitability, and that compounds over time.
We’re in a commodity business with tight margins, so every time you make a change to your revenue or expenses, even small ones, it can have huge positive effects on your bottom line.
Klinefelter’s study during his time with the Farm Credit Corporation showed the top 25% of farmers were only about 5% better than the average.
If you’re interested, you can watch my presentation about the 5% Rule with Harvest Profit.
Only 20% of what you do accounts for 80% of results. This is a great lesson when it comes to prioritizing what needs to be done and then delegating to your team.
Also known as the Pareto Principle, it can help you determine what is of vital importance – what will have the most impact on your farm profitability? If you don’t have enough bandwidth to handle it yourself, then find someone who can.
In our case, our CFO Evan Shout and our agronomist are two key roles that are vitally important, but they’re things that I trust my team to handle. This frees me up to do more strategic thinking about the future of the business, networking and taking meetings with industry experts, government representatives and multinationals.
Don’t be the victim
Too many farmers spend too much time complaining, asking for government help or handouts. Yes, sometimes they’re needed, but farmers would be alot more profitable if they did less complaining and more innovating – trying out new ideas, new equipment and new technology. Whether it be climate policies, carbon markets, artificial intelligence or automated tractors…these are opportunities we can take advantage of.
One final thought about mentors. You are never too young or too old to have a mentor and it doesn’t have to be just one person. The bottom line is that you’re bouncing your ideas off of someone else and getting feedback. As I stated earlier, we can get caught in our own way of thinking and doing things the way they’ve always been done. That’s a surefire way for our individual farms to become obsolete.
Change is the only constant in our industry and we need to be prepared to meet it head-on!
I want to take a moment to thank Danny for his years of mentorship and encouragement and for taking my call recently. Hearing his voice brought back a ton of great memories!