(Continued from last month) Characteristics that separate the best from the rest: Based on a survey of 100 dairy farmers, but broadly applicable, the study sought to understand the characteristics that separate the best from the rest.
The financial indicators upon which the study was based avoided bias towards certain types of farming systems, farm size or ownership structure.
Highly profit focussed
Many farmers focus on turnover. Successful farmers focus on profit. They have clear goals and objectives and the business is managed to maximise profit.
Invest in training
As for many careers today there is an ongoing need to learn.
Successful farmers invest in improving their own management skills, as well as in the skills required by their staff.
Compare to industry benchmarks
Those who undertook no benchmarking were the least successful.
One problem that growers will have with this success factor is that it can be difficult to find much information in Australia with which to benchmark your business.
As I have noted before, horticultural industries plan their R&D to ‘improve grower profitability’ but there are few examples of the appropriate information being presented about the existing profitability of the industry to better understand if it can and has been improved by undertaking a piece of research.
Share ideas
Successful farmers enjoy talking to others and sharing ideas.
I perceive that this can be a problematic issue for horticulture. Dairy, grains and meat industries are more homogenous and there is less problem in talking about economics.
Although things have improved, there is still a reluctance in horticulture to discuss some matters around profitability for perceived commercial in-confidence reasons. However, there are examples of new business groups emerging precisely because growers met at some point to discuss how they could work together to become more profitable.
Less time in the office
Successful farmers spend more time out on the property. This one surprised me a little.
I don’t think that many growers spend a lot of time in the office anyway, and we always hear about the need to ‘work on the business, rather than in the business’.
There must be a balance between planning (see the first point) and getting out to personally manage the tangible fine detail of the business.
Feeling and appearing successful
This is an interesting factor. The farmers who thought it was important to feel and appear successful did so because they might be able to attract better deals with their customers. I don’t think this refers to having a Lexus parked out the front of the office.
I was recently talking to the CEO of an international food company. He had just visited a grower’s property and had come away very impressed. The main shed and the office were spotless. He had come to talk business and had done so in an environment that was geared to productive discussion, good planning, management, application and so on.
His conversation with that grower took place over four hours and he enjoyed the time immensely. It’s often little things done right that count.
Taking ownership when things go wrong
This factor was the most important. Successful farmers do not accept that poor results are due to things outside their control.
They maybe can’t control those things, but they take steps to mitigate their effect. As I have discussed before, this process is called risk management and is a prime tool of modern business governance.
Conclusion
The Promar article concluded with a positive message. Yes, every season presents its challenges, and sometimes events have a big impact on a business—closure of an export market, the decline of processed fruit, and so on. Despite this, growers can take positive steps.
These include: “undertaking benchmarking, defining goals and objectives in terms of profit, understanding cost structures more fully, investing in training, conducting risk analysis and contingency planning on all aspects of the business. They can also engage with other growers and industry groups and ultimately develop a mindset to be successful”.
This research project is ongoing. You can visit Promar International at its website.
For more information, see Tree Fruit May 2013
