Site icon Business Management

The right farm team – Country Guide

Two years ago in June, Terry Aberhart got a call from an account manager at the land investment company that, at the time, was leasing him about 2,000 acres of his roughly 15,000-acre operation.

Read Also

AI for data analysis

Graphic: File This is the future. The farm’s central computer has all the farm data. It also scans seed performance…

“Hey, we’ve been having some unsolicited offers come in,” the voice on the line said.

The account manager went on: “In some cases they’ve been quite aggressive and the company has accepted the offers, and we want to give you a heads up in case this happens on your land.”

If the land company was selling other parcels that other farmers were renting, could Aberhart be on the edge of losing the land he was renting from them too?

“My spidey senses went off a bit and I said, ‘Something’s up here.’”

Land prices were escalating, and if his operation couldn’t get prepared, Aberhart knew, they might not have enough equity to buy and keep cropping those acres.

Aberhart immediately tabled the matter with his farm advisory team, which at the time included five professionals from farm and non-farm businesses — Robert Saik, CEO of AgVisorPRO, entrepreneurs Craig Senchuk and Joerg Zimmermann of High-Tech Installations, and Rick Pattison, CEO of Pattison Liquid Systems.

About a week later, on a Wednesday afternoon at 6 p.m., Aberhart got a message from the same account manager: somebody had indeed made an offer on the land, and Aberhart Farms had until noon on Monday to bid.

“It was probably one of the most challenging business situations I’ve been in in my career as far as the amount of money and opportunity involved,” says Aberhart. “If we lost the land, it was going to negatively impact our business with impact margins of 20 per cent because we had the infrastructure for that land. (But) the prices were really escalating. It was a huge leap for us to do it.”

With two and a half business days to come up with a plan, Aberhart immediately got on the phone with his advisory team, his financial advisor Dean Klippenstine at MNP, and his consulting CFO Evan Shout at Maverick Ag.

The group decided to meet first thing Monday morning. Before the meeting, says Aberhart, Shout texted him to ask how he was feeling and whether he needed support. “I said, ‘I’m all good. I know we have an amazing group of people and we’ll put the facts out on the table and I’ll go with the decision of the group. It’s way too big a decision to make on my own.’”

The group’s recommendation was to put in a bid. They came up with the number together.

“We ended up winning the bid,” says Aberhart. “We were just a shade over the other offer, which was exactly where we wanted to be.”

Yet the most amazing part of the story — the biggest land deal of Aberhart’s career — may be this next bit.

He didn’t lose any sleep over it.

“I had very little stress. We were able to make that decision with a lot of confidence.

“That,” says Aberhart, “is the beauty of having a great team of people that you trust.”

Management structures

Aberhart’s farm advisory team has been featured in the pages of Country Guide in past. But successful farm businesses rarely remain static: they change with the times, and Aberhart’s advisory has too. “Our advisory team is still extremely valuable but we’re at a much, much higher level of business acumen and decision-making processes than where we were. And that’s mainly because of having the advisory team around us. We still need their advice as much as we used to, but we don’t have as many fires to put out,” says Aberhart.

These days, Aberhart Farms works about 18,900 acres. This past year, they put up a large drying and handling system, too, and they’re in their final stage of succession on the farm. (Aberhart’s father Harvey still serves in a big-picture advisory capacity on the farm and he oversaw the construction of the drying system, a longtime dream.)

Aberhart says that with succession and operations plans firmly in place, the main focus of the advisory team during the last few years has been on setting up internal management structures for Aberhart Farms and its connected businesses.

These include SureGrowth Solutions, a precision-agriculture agronomy consulting company; Aberhart Ag Solutions which produces a podcast called Growing the Future that he co-hosts; Convergence Growth, a company that bridges gaps between production, food and health; and a food ingredient label called Pristine Ingredients, which formally launched this past year.

To help organize each business, Aberhart Farms has been using the Entrepreneurial Operating System (EOS) developed by businessman Gino Wickman. “It’s a system of communication and processing tools to help align and maximize the human energy within your business,” explains Aberhart. “What it’s done a great job on is to clarify and help us define our mission, vision, core values and long-term targets, and what we’re doing to achieve those.

The program has helped the team create a management structure where each business has an “integrator” and “operations manager” and a leadership team, which has freed Aberhart to be a big-picture thinker, he says. “I’m not in the day-to-day of the businesses as much, and now I’m spending some time working on the next adventures while the businesses grow and move forward.”

In the meetings

It’s a direction in line with the advice of Shawn Hass, senior portfolio manager at Hass Wealth of RBC Dominion Securities in Lethbridge, Alta. He says defining a vision and strategic objectives is critical for farms that want to take their businesses to the next level.

If farmers opt to use systems like EOS — which Hass strongly recommends — they’ll be “forced” to carve out that vision, he says.

Hass has long believed in the power of farm advisory teams to help farmers get necessary insight on their farm businesses. He’s helped farmers build formal farm advisory boards, or less formal farm advisory teams, from the ground up. He encourages farmers to “dream big” when envisioning who might serve on a farm advisory team, and then he helps make introductions.

Shawn Haas.

photo:
Supplied

“Sometimes having one board member that is versed in agriculture is good, but I almost like to see another board member who has a good strategic head or business head. They can push the principal decision-maker,” says Hass.

Agriculture traditionally hasn’t been as formal as other businesses. That’s partly just its nature, says Hass: farmers have to seed and harvest. “Farming has nuance — it’s part business and part lifestyle. It’s a mesh of both things, and I don’t think you can put it in a box.”

At the same time, farmers can benefit from structure. In fact, he believes, if they want to grow, they require it, and they’ll find the relative formality of farm advisory team meetings can be critical for succession and allow a farm successor to gain confidence and experience.

But what, exactly, happens during the meetings?

The whiteboard comes out, says Hass. If farmers are using a system like EOS, the topic might be dictated by the program. For example, they might go through a “SWOT” analysis, identifying strengths, weaknesses, opportunities and threats to the business.

“Where (EOS) fills the gap is that it meshes the farm vision with day-to-day operations,” Hass says.

When farm advisory teams are freshly formed, the meetings might help a farmer new to the process think about succession, go over financials, and discuss the farm’s short- and long-term planning.

“The number one thing I do to get attention when I’m running a meeting is to run the ‘Hit By a Bus’ scenario,” says Hass. “I say, ‘Who is likely to pick up where you (left off)?’ I make a living talking about uncomfortable things. I have really thick skin. You want (advisors) who will take you to task. If not, the process will feel very contrived and I wouldn’t even pursue it.”

“If you’re not interested in someone else’s opinion, it’s going to be a tough exercise.”

Farmers whose advisory teams have already helped them hash out plans in these key areas might be able to meet less frequently, although Hass recommends quarterly or biannual meetings at the minimum.

Aberhart’s advisory team meets in person once per year, supplemented by two to three virtual meetings — plus the occasional emergency meeting, as with the land purchasing decision.

The goal, Aberhart says, is to try to achieve the 80/20 rule of time management — in other words, to apply 20 per cent effort to achieve 80 per cent results. For Aberhart, this means each person on his farm is freed up to do the work they’re most suited to and can do most efficiently, which makes the whole operation run more smoothly. For the farm advisory team, this means engaging in high-impact discussions but meeting less often.

Aberhart says the impact that outside advice has had on his farm business is incalculable.

Every now and then, he hears someone make an offhand comment saying if you need to hire a marketing consultant, that just means you don’t know what you’re doing.

“I think that’s a poor mindset. You do what you’re good at and you leverage other peoples’ talents and abilities (to do) what they’re good at,” Aberhart says.

“I know I’m making better decisions that have accelerated those opportunities for me and everyone else in our business,” he says. “We wouldn’t have had that same level of success without the guidance and advice of the team around us.

“The world is a very complicated place — there are huge decisions to make in life and business and farming, and there’s no need to make those decisions on your own.”


The transparency question

During his years acting as a business consultant to farmers, Shawn Hass has noted the emergence of new trends in what earmarks a farm as being among the most successful farm businesses.

One is transparency, says Hass, portfolio manager at Hass Wealth of RBC Dominion Securities in Lethbridge.

In particular, farmers must decide whether senior employees and non-successors should be given access to the top level information that is shared at meetings of the farm’s advisory team.

Farmers typically hesitate, Hass knows. This is private, important stuff, but he says it can be powerful to widen the circle on that information, and the farm may get better business advice as a result.

“Most people want to guard the numbers pretty close. But if I’m on your advisory board, I need to know what you’re dealing with. Once you get past sharing the revenue, it results in a more loyal senior leadership team around the table,” he says.

It’s an idea that bumps up against the way many farms have a tendency to keep topics “siloed,” Hass says. HR may be one person’s baby, purchasing is someone else’s, and so on.

“But if the (folks) that are pushing for a new tractor on the capital side know there are financial constraints, maybe they can grab a used tractor or maybe they can keep used equipment going for longer. It’s amazing the waterfall trickle-down effect there can be even on a small decision if it goes past more desks.”

Yes, there’s discomfort in sharing this kind of information. There’s always discomfort in being pushed, he says. And farmers who take the leap and invite who widen the information circle are signing up for a lot of hard conversations.”

“It’s really easy to not do this,” says Hass. “There are risks …. The majority of businesses and farms won’t do it.”

The ones who will, though, tend to be progressive and humble, and they understand they don’t want to get comfortable with any status quo.

“That’s probably just the top five to 10 per cent of farmers. The ones who do it, I think they move to a level that’s so much more advanced than their peers, and that gives them huge gains financially but also culture-wise. They end up being employers of choice, because there’s more going on here than just marching orders. That to me is the biggest thing — it’s not just for the (farm) leaders, but will filter down to everybody that’s involved, and to their customers and other partners they have in the industry.”

link

Exit mobile version