I recently attended a conference in Manitoba. One of the speakers addressed alarming changes in crop costs and expenses over the past eight years and included a projection for 2023. While these vary from region to region the trend is similar. Costs are up and prices are down. Nothing anyone reading this article is not acutely aware of.
I am a strong proponent of alignment within a farm and family. These economic realities are disruptive to alignment and control relationships that exist within farm families and businesses.
Areas of Alignment
1. Business Direction — This alignment consideration is about strategic direction and vision. What are you working toward? What is the common purpose of what it is that you are doing? I cannot stress the importance… in this current economic environment… of families, who are farming together, taking time to discuss and come to an understanding and agreement on the what and why of the farm.
2. Financial Performance — Your farm has an existing financial direction. The reality is, that it is headed somewhere financially. For most farmers, this is a reactive function meaning that your financial position in the future, say five years from now, will be an outcome of what will happen over that time frame.
The preferred approach is to define what you want, or need, your financial position to be. And then determine what can and needs to be done to achieve it. Think of it as creating your financial vision. It should include financial targets or goals.
Logically, there should be a significant degree of alignment between a business vision and a financial vision.
3. Management Structure — The importance of understanding a farm’s management structure, as farms increase in size, become more complex, and transition inter-generationally, has never been greater. The basic management functions on a farm are the same but what is involved in attending to those functions has changed and is changing.
A farmer once told me that it felt to him like he was speeding down the road driving by looking through his rear-view mirror, late at night and in the dark. He didn’t say it but what he implied is that he was out of control and that alignment was missing in one or more of the key areas noted above.
Many farmers will experience similar feelings. The magnitude of those feelings will depend on the situations and what is happening at the time. I think there is a correlation between the degree of control and alignment that exists, or is lacking, in farms and farm families. Misalignment of any of the above factors will directly or indirectly lead to loss of control feelings and issues.
I am suggesting that you take some time to consider the following:
- Take a few minutes and reflect on your feelings of control. What first comes to mind?
- How important is it that you maintain feelings of control with individuals, family or the farm business?
- Think of a time when you had the feeling of the right balance of control. Recall what was happening then. What might have caused things to come out of balance?
- Do feelings of control challenges cause anxiety? If so, what does that look like? How do you manage the anxiety?
- How predominate is finance as a factor of control challenges within your farm? How does it impact on other aspects of the business and family life?
- How do feelings of being busy impact on your feelings of alignment and control?
- How do you mitigate the “noise” and by doing that, maintain focus that can help to mitigate feelings of being out of control?
What different understanding of you as an individual, your family and the business might you gain from spending time thinking about control and alignment? One thing for sure, you won’t know unless you try.
If you would like to speak to one of our consultants about this topic contact us.