MBAg by Adam Erwin 03/28 10:32
My Farm's Final Four Strategy
Small businesses make decisions just like teams advance in the March Madness
basketball pools. Farmer Adam Erwin outlines four bracket-winning strategies
for the 2014 season.
By Adam Erwin
DTN Special Correspondent
Have you ever read one of those "Good to Great," "Who Moved my Cheese?"
sort-of-corporate survival guides and thought, "Everybody raves about this
book, but where's the pertinent advice about running a successful family farm?"
In as much as the business coaching world would like a "one-size-fits-all"
strategy for big and small businesses, that shoe just ain't gonna fit. You want
to be the one who tells my 84-year-old mother, who has hauled at least 2
million bushels of grain to the elevator in her 1976 Chevy C-65 tandem, that
her efforts only achieved five of six Sigmas?
Small family businesses are totally different critters than big corporate
business. We work with different tools and often do the work ourselves. Data
mining for strategies to fling at the masses isn't effective here. We don't
have "departments" to handle our problems. Routinely, we make do with scarce
resources and don't have time or the staff to hold meetings just to discuss
prior meetings. And because we are often staffed by family members, layoffs and
reassignments can just mean a different set of problems to deal with. Firing a
family member is just like a redneck divorce. You may not be hitched anymore,
but you're still cousins!
Simply put, I think Big Business fails to connect with small business
because it just can't imagine how we operate without a behemoth organizational
structure touting all the efficiency and reliability of a Russian combine. At
the moment, Big Biz has some great ideas trying to transform themselves into
useful products for family managed farms, it's just having an "Obamacare
sign-up" moment because it can't grasp how small businesses like ours make
product investment choices.
So maybe we can help Big Biz bridge the gap? Explain things in their own
terms? While watching college basketball this week, a solution came to me.
Small businesses make decisions just like teams advance in basketball pools!
Hence, the NCAA men's basketball tourney could double as a framework for
corporate suits to comprehend product selection process at small, feisty
To illustrate, I thought I would outline my farm's brackets, basketball
tourney style, and comment on each:
Top-seeded short, ultra-low-interest rates are susceptible to a bracket
buster here. Paying a bit more to lock in 20-year land money seems like an
old-school jump-shot team trying to play ball in a "slam dunk"-paced game. Low
short-term rates may lead at the half, but when the 3% and less money fouls
out, I'm favoring the slow and steady approach to win the game.
Those that see a "return to overproduction, get it sold" are taking their
shots in the paint. They are playing defense. On the other hand, those who can
adjust their cash flow and wait for another supply scare or demand surprise are
calculating a victory engineered on three-point shots. Reluctantly, I'm
favoring the outside shooters and their offensive strategy.
It's almost Silicon Valley vs. Detroit in this match up. Semiconductors vs.
mechanical gadgets. Do I invest my time in algorithm-driven planting dates and
variety choices, available via smartphone apps? Or do I go with 10 mph planting
technology, complete with titanium high-speed bearings and spoilers to keep my
planter from fishtailing?
In the oldest rivalry in the tourney, do I invest in infrastructure to keep my
business competitive? Or rolling stock to increase my production? In a $10,000
and higher farmland world, with rents to match, I'm not feeling the itch to
work harder as much as I want to work smarter. I'm not thinking bigger at the
moment, I'm thinking better! With over 200 new ethanol plants constructed in
the past decade, I've committed to improving my grain facilities to deliver my
products when the market wants them the most!
I know I'm supposed to say that it's not whether you win or lose, it's how
you play the game. Bracket Busters are likely and big business will have to
accept that there are more ideas to implement than most family managed farms
have resources to put them in place. And if you are wondering who won my
tourney this year, infrastructure beat out software and went all the way! I
built a big grain set up.
Editor's note: Real Midwest farmer Adam Erwin is a former banker who writes
under a pseudonym. He farms more than 10,000 acres of corn, soybeans and wheat
in the Midwest and Pacific Northwest.
Copyright 2014 DTN/The Progressive Farmer. All rights reserved.
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