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Woodbury:Farm Family Business 06/11 08:33

   How Strengths Also Expose Weaknesses

   Ag's most influential leaders must balance character traits to succeed in 
life as well as business.

By Lance Woodbury
DTN Farm Business Adviser

   The last few weeks I've been reading two books on character. The first, Fred 
Kiel's "Return on Character," discusses the relationship between a leader's 
moral character and the financial success of a business. The second, David 
Brooks' "The Road to Character," delves into the habits and practices of a 
diverse group of people who've had a significant impact on the world. Both 
books caused me to think about how the character of the family business leaders 
I know has shaped the success of their agricultural businesses. 

   I began thinking about the question, "What characteristics lead to 
agricultural family businesses success?" And then I asked, "What are the 
obstacles others face to attain this success?" The more I thought, the more I 
realized the answer is a kind of paradox. The qualities that define our success 
also have embedded in them the obstacles to our progress. Let me offer three 
examples. 

   INDEPENDENCE 

   An oft-mentioned characteristic of agriculture family farms and ranches is 
that they are "independent" businesses, meaning the owners of such enterprises 
answer primarily to themselves. They are free, within regulatory boundaries of 
course, to make decisions about their businesses -- how they work their land or 
livestock, what they grow, who they hire and who they sell to. 

   In my first book, on family business values, I described such independence 
or freedom as the chance to work for yourself, to create opportunities for your 
current and future family using your capital, your intelligence and your drive. 
And in agriculture we see a significant number of independent farming and 
livestock businesses: In the 2012 Census of Agriculture there were roughly 
300,000 farms with more than $100,000 in sales. 

   I realize that a smaller share of that number accounts for a majority of 
sales, but that is still a large number of businesses. (For some context there 
are about 630,000 restaurants in the United States.) While there are some farms 
that are owned by large corporations, the majority of those entities are 
independent, family-owned organizations.

   That independence, however, at times makes it difficult to work together. 
I've seen multiple business partnerships fail or dissolve due to the inability 
of such autonomous business owners to yield to another's ideas. It seems 
everyone has their own notion of how decisions should be made, which direction 
to head, which opportunities to pursue and how to work through business 
problems. In contrast, I've seen several collective efforts that have created 
significant wealth for business owners when everyone has given up some 
independence in return for focused direction and action. 

   The independent nature of our industry's business owners can also affect our 
ability to work together on policy initiatives or consumer opportunities. On 
current issues of climate change, food labeling, sustainability and the humane 
treatment of animals, it feels as if the agriculture community is often 
fighting itself, while simultaneously suggesting the consumer is wrong to ask 
questions of the food system. What makes us so great as an industry -- our 
independent drive for success -- can become our Achilles' heel when we need to 
band together and create a more unified and proactive front.

   HUMILITY

   We all know a farmer or two who talks about how great they are. But as a 
group, farmers and ranchers demonstrate a noticeable amount of humility. Most 
never brag about sales or revenues, in contrast to many other non-agricultural 
businesses, where sales numbers are a standard benchmark of performance. Some 
people talk about acres or livestock numbers, but often to give some sort of 
reference to communicate the scale of the business. Those who speak in a 
prideful way of their acreage usually and rather quickly draw the scorn of 
other agriculturalists.

   Many farmers and ranchers were raised to not boast of their accomplishments. 
The source for this humbleness is difficult to identify, but probably comes 
from a combination of religious teaching, close-knit relationships in rural 
communities (which might have suppressed boastfulness in order to get along), 
the often indirect relationship of a commodity producer to the end-user, and a 
feeling that the product of one's labor "speaks for itself" and needs no 
explanation for its quality. In any case, the contrast between the culture of 
humility among agricultural businesses and the more aggressive, even brazen 
self-promotion of more urban, non-agricultural businesses is evident to me as I 
work in both worlds. 

   While humility is important, we also live among an increasingly urban 
populace, where others may not understand the farmer or rancher's history, 
goals and methods. Political and financial power is wielded by many who may 
have no direct tie to agriculture, and the influence we have in those decisions 
decreases as more people move from rural to urban communities and fewer people 
enter commercial farming.

   If our cultural modus operandi is one of reluctance to promote our own 
achievements, who will tell our story to the world? While I dislike the 
simplistic notion that "all we need to do is tell our story," even this simple 
act of narration is something uncomfortable, foreign and awkward for most 
farmers and ranchers. We need to find a better balance between staying silent 
and humble, and offering our urban friends and our customers a way to 
understand the benefits we bring to the American consumer.

   SELF SUFFICIENCY

   After spending a couple of years in Washington, D.C., then moving back to 
our family's ranch in western Kansas and working at a cattle feed yard, I often 
remarked that if the end of the world were approaching, I'd much rather be at 
the feed yard. The people working there (other than me) knew how to fix about 
anything, mechanical or biological. They understood the practical application 
of science, mechanics, engineering, crop production, meteorology, animal 
husbandry, and even cooking. I have extreme confidence in the problem-solving 
abilities of farmers and ranchers.

   But that Do-It-Yourself mentality, if taken to extremes, can create 
unnecessary hardship for agriculture family businesses. It has caused many a 
family to avoid using an adviser to help them with difficult issues outside 
their realm of knowledge, like estate planners, human resource consultants or 
family business consultants. Depression, addiction and other mental health 
problems go untreated because "we don't share our dirty laundry with others." 
In addition to people issues, risk management and marketing tools, financial 
accounting concepts and new crop and livestock practices are avoided because 
"we don't do it that way." So while self-sufficiency is a real strength, it can 
also lead to significant blind spots.

   Many family business leaders share values that have contributed to a sense 
of business success. But those same values, in certain ways, can inhibit our 
ability to move forward, both individually and collectively. Our strengths can 
get in the way of our progress. Being aware of this tendency, paying attention 
to the context in which our values can sometimes work against our goals, will 
help to make the family agriculture business stronger in the long run.

   EDITOR'S NOTE: Lance Woodbury writes columns for both DTN and our sister 
publication, The Progressive Farmer. He is a Garden City, Kansas, author, 
consultant and professional mediator with more than 20 years experience 
specializing in agriculture and closely held businesses. Subscribers can access 
all of his archived columns under News search. Email ideas for this column to 
lance@agprogress.com

   


(MZT/SK/CZ)

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