At Farm Credit East, we have the privilege of working with farmers, ﬁshermen and forest product producers across the Northeast. During my nearly 30 years at Farm Credit East, I have been fortunate to work with customers across all parts of our territory. Many have been in business for multiple generations and are well established in their local communities, while others are ﬁrst generation operators who see new opportunities for agriculture that may be different from the traditional view.
Over the years, agriculture has continued to evolve and grow. Regardless of whether a business started in 2017 or 100 years ago, most start as family operations with the owners wearing many hats. In addition to being the owner, they are also the bookkeeper, crops and/or livestock manager, head of maintenance, chief problem solver, and generally putting out the figurative fires that pop up at any given point in time.
As businesses grow, business owners need to adjust their roles and limit themselves to wearing fewer hats like those of CEO, CFO or COO. Don Rogers, a long-time Farm Credit business consultant, once said that if you double the size of your business, your management and leadership responsibilities quadruple. Successful business owners need to delegate some things on their long list of responsibilities so they can focus their time and energy on other priorities.
Several years ago, I was a loan officer for a customer who had started out with a small herd of dairy cows on a rented farm. Each year, he added a few more cows, planted a few extra acres of corn and eventually started a small hay business, each time with the support of a well thought-out plan of how to make the next move successful. By the time the business owner was in his early 40’s, the operation had grown and diversified into a variety of successful farm and non-farm business ventures.
I happened to be meeting with him when one of his employees popped into the office with an issue that needed immediate attention. He made note of the issue on a notepad, but then politely reassured the employee that they knew what to do and to team up with another employee to handle the situation. When I offered to come back at another time so he could assist his employees, his response is something I still remember today:
"If I spend the day fighting fires, that means I am putting all of my energy into just keeping my business from going backwards. If I want to move forward, I need to spend my time preventing fires, not putting them out."
Many of our most successful business owners share a similar mindset with that customer. Not every business will be big enough to justify a dedicated management team, but successful businesses always make room for enough dedicated management time to review progress, identify lessons learned and plan for the future.
In reality, the occasional fire will still pop up and need an owner’s attention. When it does, we may need to ask “why” more often than we usually do. Smoothing things over with an upset customer is something that shouldn’t be neglected, but it rarely addresses the real problem. It fixes what broke, but not why it broke.
And if you don’t keep asking “why?” you’ll probably have to put out that fire again. Sometimes this is referred to as the “5 whys?” because that’s often how many times it takes to get to the root cause of something.
Here’s an example:
- Customer ABC Enterprises is upset. – Why?
- Their order wasn’t delivered as specified. – Why?
- Whoever prepared the order didn’t do it properly. – Why?
- They didn’t understand the specifications. – Why?
- Whoever took the order didn’t write things down in adequate detail. – Why?
- Root: Our sales systems and procedures are deficient in some way.
In this example, smoothing things over with ABC enterprises is essential, but fixing the underlying problem may be even more important so that you don’t have to fight that fire again. While a typical problem might be different for a wholesale or commodity-oriented business, it’s equally important to get to the root cause so that top quality agricultural, horticultural, forest or seafood products get shipped on time, every time.
A big part of being able to spend more time planning is successfully empowering and training staff to handle the issues that arise. Otherwise, the growth of many companies often plateaus at the limit of what owners can manage themselves. Developing teams and systems to build capacity as an organization is one of the keys to growing the business beyond a single individual’s limitations.