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Prioritizing natural talents to reorder the seating assignments on your dairy bus

Greg Squires • August 25, 2021

The managerial succession planning process can clearly benefit from a proactive process of optimally aligning skills, talents and passions with roles for both non-owner employees as well as owners.

Yes, this business and financial consultant is writing another article regarding human resource management. I’ve received numerous questions from clients and industry friends who are curious about why I (a numbers guy) seem to be so interested in human capital. Quite honestly, it’s because I believe this dynamic has paramount importance to the success of your businesses. Every one of the thousands of procedures and processes that must be correctly and consistently completed every day is entrusted to the hands and mind of a member of your team. As you have heard me say many times, you as owners owe it to yourselves to harvest as much fruit from these labors as possible.

Every business has any number of roles (a collection of various tasks and responsibilities) which are required to complete its essential functions. Likewise, every business has a staff of employees (including the owners) who have one or more roles for which they are responsible. For the purposes of this conversation, let’s think of an employee as being a collection of skills, talents, and passions (STP’s).

These interrelated components which contribute to successful business function can become very complicated. We sometimes realize that an employee who failed miserably at caring for and feeding baby calves could later shine after being developed into a cropping manager. This is a great example of one of the many reasons we see high employee turnover on some dairy farms. We didn’t hire a “poor” employee but instead, hired an employee (a collection of skills, talents, and passions) to fulfill a role (a collection of various tasks and responsibilities) for which they were less than ideally suited. In other words, the employee was almost set up from the beginning to under-perform because he/she did not find the role to be personally fulfilling or perhaps did not have the skills to notice when calves were just at the edge of becoming clinically ill.

Why are we discussing skills, talents, and passions?

These three personal attributes (skills - talents - passions) combine to have a compelling influence on an employee’s job success, as determined by both the employee and the employer. Talents typically refer to abilities that a person is born with, an aptitude that comes naturally. Skills are those abilities which can be acquired, learned, practiced, and developed. Passions are those activities, objects, and concepts for which we have strong liking and devotion. When a person is fortunate enough to be working in a role that matches their skills and talents, job performance and satisfaction can be optimal. If their role places them in a work environment which allows them to follow their passions, the outcomes can also be incredibly fulfilling.

I have a personal friend who works in an industry very different from agriculture. Almost every time we are together, he asks me about my work. He confessed a long time ago that he has always been fascinated and even a little envious when he listens to me describe my various clients, their businesses, and the work I do on their behalf. He sees an unfamiliar level of enthusiasm and energy in my face and expression. Unfortunately, those are emotions that he finds very foreign in relation to his work and profession.

Most of you can readily associate with the value of having passion for your chosen vocation. Most of my clients over the years have professed their fondness for being stewards of the land and animals they manage as part of their business. Those feelings are often accompanied by a statement along the lines of “and this is how I want to raise my family.” To me, these kinds of feelings and emotions are clearly indicative of following one’s passions.

This dynamic has implications for succession planning

I’ve had the opportunity to listen to a lot of family discussions regarding succession planning, including managerial succession. It is not at all uncommon for the Next-Gens to be willing to express their areas of interest, especially when asked. Sometimes the process will evolve to their being able to naturally elevate to the role or roles which be conform to their STP’s. Unfortunately, birth order is sometimes the determiner based on chronological entry into the business and the needs of the business at that particular moment. Other times it simply becomes a process of picking someone to fill a role that no one else wants. As you can see, the managerial succession planning process can clearly benefit from a proactive process of optimally aligning STP’s with roles for both non-owner employees as well as owners.

It could be time to take an inventory of talents to get everyone in their best seat on the bus

Have you ever considered asking your new employee about their job interests, personal goals and STP’s? Experience tells me this is not very common among most dairy operations. Many of you would probably be inclined to tell me that this is one of my “soft and fuzzy” recommendations. Sourcing, hiring, training, developing, and retaining capable employees has been a named top-3 management challenge on dairy farms for a couple decades and has become an even greater challenge in recent years. Since the beginning of the COVID pandemic, I’ve seen several particularly strong management teams slide towards “hiring warm bodies” out of sheer necessity. These HR dynamics only magnify the benefit of maximizing employee effectiveness and retention.

Taking an inventory of STP’s can help ensure that your team is working in areas where each member is leveraging their STP’s to the maximum benefit of the business. Imagine a sheet of paper with two columns: one on the left – a listing of the various processes, protocols, reports, tasks, etc. that are required to fully support your management system (including those that you may not be currently employing); on the right – a listing of each employee and their STP’s. I fully realize that this exercise is too robust for just one sheet of paper but I believe this concept can help brainstorm toward more efficient alignment of roles and responsibilities. This improved alignment can result in greater effectiveness of the team’s collective effort while simultaneously putting your staff and co-owners in more rewarding roles with greater personal satisfaction. Think about drawing lines from one side of the imaginary paper to the other side until eventually all the STP’s are fully employed and then look to see which roles and responsibilities are filled and if in fact, there are any unfulfilled. That’s another benefit of this exercise – it will help you identify areas of management that are not fully resourced.

Just prior to brainstorming through an exercise very similar to what I just described, a family patriarch once asked me: “I believe that none of the Next-Gens feel passionate or particularly skilled to become our next CFO – what do we do Greg, if in fact that plays out?” I asked him if there was some ancient law that says family or owners are required to fill every executive suite role in their business. If there are in fact unfulfilled roles or responsibilities, they can potentially become part of your next hires.

One word I feel best describes the power of consciously aligning STP’s with roles and responsibilities is “synergy.” I am known to speak of synergies is several different dimensions, not the least of which is synergistic relationships and the incredible power they can bring to a business. Stephen Covey (author of The 7 Habits of Highly Effective People) describes synergy as follows: “Synergy is what happens when one plus one equals ten or a hundred or even a thousand! It's the profound result when two or more respectful human beings determine to go beyond their preconceived ideas to meet a great challenge.” I am absolutely convinced that a stronger understanding of your STP inventory can create profound synergies among your team – now go see what you can create!

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Successful dairy farms: What do the have in common?

By Greg Squires • June 11, 2012

Several readers of my last article emailed me with a question that I have repeatedly heard from customers and audiences for many years: Are there traits or characteristics which are common to successful dairy farms? If you were to ask 100 different industry professionals and dairy producers, you would undoubtedly see 100 different lists of attributes most closely linked to success. As Dairy Enterprise Services continues its work on dairy operations across the U.S., the following are among the most common characteristics I observe: Intense reproductive management Many successful dairy producers place a high priority on breeding cows to maintain relatively short calving intervals. This focus is not only rationalized by higher milk production but greater internal herd growth. Set expectations Regardless of herd size, every dairy owner relies on other sets of hands to complete the work that is necessary to operate a dairy business. One of the most common disconnects between a manager and subordinate is a basic lack of understanding of what is expected of the job, role, or task. While this trait is clearly not universal among successful farms, many of the best operators have developed a discipline of setting clear and measurable expectations of not only those people who are on their payrolls but their advisors as well. Manage risk This trait may be one of the more arguable points on my list but almost by definition, a successful business must survive any risks that could potentially bring about its collapse. The counterpoint to this observation is that many very successful dairy producers are also among the most significant and calculated risk-takers. Risk comes in many forms including market (milk/feed/land prices), safety (liability), financial (leverage, interest rates), production (milk, disease, reproduction), and counter party (contracts). Mitigation of these risks must constantly be matched against the business’ ability to survive a worst-case scenario in one or more of these areas. While risk management is never perfect and always comes at a price, many good managers are vigilant in looking for cost-effective tools to mitigate sources of risk. Possess an attitude of excellence While this is one of the least quantifiable qualities on my list, it certainly is one of the more pervasive. What I’m describing is a never-ending attitude of doing the right things and doing things right. I once had a customer who, when working through a SWAT analysis replied that one of the strengths of their business was “we sweat excellence.” He offered the comment not as a boast or an arrogant jibe but was simply trying to state that they treated all of their selected processes as being important. If something was important to them, they strived to do it right every time, all the time. Take care of people Successful dairy operations are in a position of success largely because they have surrounded themselves with good people, and people who they want to retain. They are also surrounded by good neighbors to whom they in turn want to be good neighbors. Therefore, many successful dairy owners and managers are careful to be considerate and respectful of members of their staff, their communities and their industry. Focus on milk quality and udder health This is probably one of the more universal traits found in successful operations. Managing for improved SCC and udder health is an obvious economic driver considering their combined impact on milk production, milk premiums, and operating costs. Many of these excellent operators have instilled the notion among their staffs that they are in the business of producing food for people and it is sometimes amazing how impactful this concept can be, particularly with milking crews. Passionate about information As an industry, we still do a pretty poor job of utilizing information (financial reports, production summaries, scorecards, etc.) to make informed management decisions. However I am confident that I commonly see these tools being utilized in well managed businesses. An old saying goes something like: “You can’t manage what you don’t measure.” Actually it was Peter Drucker who said “If you can't measure it, you can't manage it.” Our missed opportunity more often isn’t that we can’t measure it…more commonly we simply don’t measure it. Aggressively manage costs When compared to its ability to determine milk price, a dairy operation has much greater influence on its costs of production; many successful dairy operators manage costs very closely. There are two common standards of measuring costs in a dairy operation: cost per hundredweight of milk produced and cost per cow, per year. Obviously cost per hundredweight can be influenced by both raw costs as well as the volume of milk produced and I am referring to the management of raw costs. Many of these operators could be described as “tight with a buck.” Understand the importance of growth There are two reasons why I believe this is a common factor in successful operations. First, our industry has been consolidating for decades. With consolidation, efficiency targets evolve and scale becomes an increasingly significant dynamic (not a sole determiner of success, just one factor). Second and more importantly, growth can become an important factor in a business’ ability to sustain its mission of providing a desired standard of living for its owners. As succeeding generations come into the business, there will be “more mouths to feed,” so to speak. Also, time and inflation have a way of eroding the ability of each cow to generate sufficient net income to meet its owner’s standard of living. I certainly don’t intend this list to be either inclusive or exclusive. I realize there are additional attributes which may be associated with successful operations and I believe that a dairy that may not possess one or more of these characteristics can still be successful. I do however associate each of these skills and priorities of management with many successful dairy operations. Of course we all must be mindful of our own unique idea of what defines a “successful” dairy operation. As a business owner, it is your right and prerogative (if not obligation) to determine what success means to you and your fellow owners. Of one thing I am certain: it is of the rarest of circumstances that success is realized purely by accident. As Confucius once said, “Success depends upon previous preparation, and without such preparation there is sure to be failure.”