Current Progressive Cattle digital edition
advertisement

Globalization requires farm owners to look beyond ag sector

Bob Milligan Published on 24 September 2013

In the last week, I have had three discussions about the future of professional development for farm owners and leaders.

In each discussion, I have suggested that a part of their professional development in supervision, strategy and leadership should be outside of agriculture. Why would I make that suggestion?

Let’s begin by thinking about some of the major developments impacting agriculture in recent years. The following come to mind:

  • The fear of dependence on imported oil, especially after 9/11, led to subsidies that enabled the development of the ethanol industry.
  • Unsustainable growth in the housing industry triggered events that led to the worst recession since the Great Depression.
  • Incredible advances in information and communication technologies have and will continue to change everything.
  • Political, economic and climatic events and trends in parts of the world we have never heard of alter exports of agricultural products with major supply-demand and price implications.

The increasing interconnectedness of our global world, the increasing complexity of our beef businesses and the increasing rate of change is transforming the attitudes and actions required to continue to thrive in an agricultural business.

We are all rightly proud of our rich agrarian culture. Many of the values and features of that culture must and should be continued; others, however, must evolve as our world and our society change.

1013pc milligan 1 tb

Table 1 contrasts our traditional views and the views that will enable beef producers and leaders to continue to thrive in today’s complex and turbulent world.

Returning to the topic of this article, how can beef business owners and leaders benefit from looking outside the beef and the agricultural sector?

Below, we look at what should be known about and what can be learned from outside the agricultural sector.

Understanding the world beyond the agricultural sector

The individual or individuals performing two key roles in a cattle business must be most aware of what is happening outside the ranch and the agricultural sector.

These two roles are chief executive officer (CEO) and chief financial officer (CFO).

The CEO is typically the senior leader of the beef business and the person most responsible for developing and implementing a winning business strategy.

This role has changed dramatically in the past several decades as the world has globalized and the pace of business activity has exploded.

What once was often only an annual task now requires everyday vigilance. The person in this role is primarily focused on understanding the world around him or her for purposes of identifying opportunities and continual strategy adjustments.

The CFO role is generally less well understood and often absent in cattle businesses. An excellent definition of the CFO role is: create, implement and monitor systems that ensure our business is financially secure.

The CFO role complements the CEO role but is more focused on financial feasibility and risk management than is the CEO role.

In scanning and understanding local, regional, national and global trends and events, the CFO is more focused on identifying potential threats and assessing the risks of potential strategy moves.

Learning from the world beyond the agricultural sector

1013pc milligan 1 fg

Figure 1 depicts my representation of what is needed to lead and manage a successful cattle business.

The operational excellence component has historically been the focal point of professional development for and operation of cattle businesses.

Future professional development, especially for those in the CEO and CFO roles, must also focus on the workforce passion and the strategic leadership components of this structure.

The learning needs for the employee passion and strategic leadership components are in human resources, supervision, leadership, strategy and financial management (including the CFO role discussed above).

Note that these topics differ from beef cattle nutrition, beef animal health, crop production or futures trading in that they are not unique to beef or to agriculture.

I am not suggesting there are not excellent resources on these topics within agriculture. There are great programs and expertise in colleges of agriculture (The Executive Program for Ag Producers, local extension programs, for example), commodity organizations and agricultural consulting businesses. These should continue to be a part of your professional development.

I am suggesting, however, that learning from outside agriculture should also become an important part of your professional development.

Let me close with three suggestions for your professional development from outside agriculture:

1. Determine where the leaders in your community – superintendent of schools, bank president, mayor, etc. – go to share leadership experiences and learning.

Consider joining. It may be a service organization such as Rotary or Lions Club, a community business organization or some other group.

2. Select some resource from the Internet to follow and review frequently. These resources include e-newsletters and webinars, often free.

Mine include resources from Harvard Business, Blanchard Associates, the Performance Excellence Network (a regional Baldrige organization), the local chapter of the American Association for Training and Development and the Marcus Buckingham Company.

I believe materials from and programs organized by business schools, especially those focusing in agribusiness and family business management, will be increasingly important for the professional development of cattle CEOs and CFOs.

3. Read books on supervision and leadership. Books range from stories to complex textbooks. Please contact me at Robert Milligan for suggestions.  end mark

Bob Milligan is also professor emeritus, Dyson School of Applied Economics and Management, Cornell University.

LATEST BLOG

LATEST NEWS