Tragedy Broncos

When Tragedy Strikes

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It hits hard. Like a body blow from Mike Tyson. You didn’t know you could feel that much pain. Suddenly, everything else seem to not matter except for what you’re feeling in that moment.

When word began to spread during the evening of April 6, the feeling of shock touched everyone. A Junior “A” hockey team in their charter bus on the way to play Game 5 of the league semi-final series collides with a loaded semi tractor-trailer.

Shock instantly turned to devastation. Twenty-nine on the bus. Fifteen would perish. Ten of those lost were players on the team, aged 16 to 21.

It took me until the next morning to be able to gather any sort of rational thought. The realization that so many families would be more profoundly affected than most any of us can imagine can take some time to sink in.

Then the world took notice. To make an already told story short, in less than 60 hours people from around the world have donated, at the time of this writing, nearly $6million to help support the families of the victims of this horrible tragedy. https://www.gofundme.com/funds-for-humboldt-broncos

I lost one of my oldest friends in our senior year of high school. She was a passenger in a car, unassuming on a Friday afternoon, her dad’s birthday of all days, when a tragic collision took her…three weeks before her 18th birthday, six weeks before her high school graduation. It will be 25 years next month since she’s been gone.

Life is fragile, it can change in a blink, and must not be taken for granted. Facing our own mortality is not easy; it is something that young men playing junior hockey, nor my old friend, had not likely given much thought.

None of us is immune to the tragedy that the world can bring our way. If tragedy strikes your business, how will it carry on? Are all your affairs in order? What if you or a key person in your business didn’t come home tonight?

Plan for Prosperity

Proper business planning has us strategizing on how to handle the “what if”. This type of preparation also applies to our person. Get your will, powers of attorney, and organ donor card in place; share your wishes with your loved ones; don’t take the inevitable for granted.

And hug those you love…often. Life is never fair, and is always short.

Goal Congruence_LI

Goal Congruence

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Have you been beat up enough yet about “defining your goals”? Every article I read relating to business management and every presentation I attend relating to business management always brings up the need for you as the businessperson to “define your goals.” For the record, “business management” in the context of this piece also include business transition (succession) planning.

The beatings will continue. They’ll continue as until everyone doesn’t just listen to the advice, but acts on it.

More often than not, when I ask a client (or even a prospective client) what are their goals, I get a blank stare, as if the concept is a foreign language. Far too many business owners have given little consideration to what they are trying to achieve in the business.

If it’s just a place to work and/or a lifestyle to enjoy, then declare it as your goal.
If it’s a family legacy that has been left to you that you intend to leave to your children, then declare it as your goal.
If it’s to achieve the largest scale in your market area, then declare it as your goal.
If it’s to create financial wealth and prosperity for you and your family, then declare it as your goal.

Don’t just tell the advisor you’ve hired, and paid well, that your goal is “to make more money.” That’s everyone’s goal, whether employed for someone else or self-employed like you. Let’s get serious.

There are four sample goals described above. These four have been chosen because they are the most common goals I have identified in working with entrepreneurs for the last 15 years. What I mean by “identified” is that while some of these goals have been declared, it’s more common that the goal is insinuated by (or surmised from) the behavior of the owners. The problem is when business owners try to combine more than one of those four sample goals listed above; this happens almost all the time.

The first goal listed, lifestyle, is not congruent with any of the other three.
We’ve learned that largest scale does not automatically equate to increased financial wealth and prosperity; again, not necessarily congruent.
The only congruity among the four samples is between family legacy and financial prosperity.
– yet behaviors often do not follow those goals.

It is advisable to have multiple goals in business and in life. In business, none of the goals we may have can be achieved without prudence in financial management. Remember, profit feeds your business, it feeds your family, and it feeds your ability to spend time with your family & on other things you enjoy. If you feel uncomfortable declaring one of your business goals to be financial wealth because you don’t want to be thought of as a greedy person, then don’t declare it, but for the sake of your business’ and your family’s future, behave like it. If you’re not profitable, if you’re suffering under the pressure of non-existent working capital, or worse, then none of your goals are achievable. Period. Hard stop. I’m sorry to have to deliver that cold truth in such a harsh manner.

To Plan for Prosperity

The challenge I lay out for all entrepreneurs is this: be clear on why you do what you do, establish working parameters and behaviors that support it, and evaluate your progress & results regularly to ensure you’re still on track. How sad would it be to never check the map for the entire journey only to end up somewhere you never meant to be?

Not only must your goals be congruent, but your behaviors must be as well. You and your business face enough turmoil, challenges, and risks. Don’t create more challenges by making decisions that aren’t congruent with your goals.

top producer

Are You a Top Producer?

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Esteemed economist, Dr. David Kohl, is a fervent advocate of improving business decision making. In one of his recent speaking engagements, Dr. Kohl suggested that top producers can answer Yes to at least six of the following questions.

Top Producer Kohls questions

With only 10 questions on the slate, a positive response to only 6 of them would make you a top producer.
You’ll note that nowhere in those 10 questions will you find anything about actual production…

To Plan for Prosperity

If you are unable to answer YES to at least 6 of Dr. Kohl’s questions, then I suggest you do an internal audit on yourself and your business to determine why. If you are unsure about where to start in doing such an audit, or how to make the changes necessary to be able to answer Yes to 6 of 10 questions, then pick up the phone – I can help.

If six-out-of-ten makes you a top producer, imagine how strong your business would be if you hit 10/10…

CYFF

CYFF (Canadian Young Farmers’ Forum)

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Greetings from CYFF

The Canadian Young Farmers’ Forum brings together farmers from across Canada. This past weekend in Ottawa, they held their annual convention and invited me to speak as part of their agenda.

There were many takeaways from the event; here are a just a few, with my perspective following in brackets.

  1. Agriculture is incredibly diverse right here in Canada. (We shouldn’t just stay in our little echo chamber with others who produce the same as what we do.)
  2. Even with such diversity, young farmers face similar challenges across all sectors and across all provinces & regions:
    1. Building and protecting adequate working capital is difficult (I’ll keep preaching the importance of this;)
    2. Profitability is cyclical (we may have heard this before;)
    3. Competition is increasing for land, labor, etc (and they’re stressed out trying to figure out how to handle it;)
    4. Small farms struggle to compete with large scale & well capitalized operations (yes, there are large potato, berry, vegetable, dairy, poultry, & egg farms like there are large grain and cattle farms, and competing with them for land and labor is just as tough;)
    5. Young farmers feel lost when trying to determine if/how their parents ever plan to slow down/retire (this also applies to every other family business, not just farms.)
  3. The desire to learn more and be better is strong (learn, unlearn, relearn.)
  4. The desire to take part in something bigger, such as industry groups with lobby or policy influence, is significant.

CYFF is for farmers under 40. Based on the passion of these young farmers, and their desire to learn & be better at everything they do, I think the future of agriculture in Canada is in good hands.

To Plan for Prosperity

The issues you face, the challenges you struggle with on your farm are the same as almost countless other farms. The relief and comfort seen on the faces of these young farmers when that became evident was obvious. They felt less stressed and less alone when they realized that they are not the only ones feeling the angst, the despair, or the helplessness that dogs their personal situation at home.
Don’t sit alone and wallow in your own anguish over what challenges you in your business. Sharing your trials and tribulations will not only help mentor the passionate successors to our industry, it may help you find comfort in knowing “you’re not alone.” It might even turn up a solution.

3-circle

3 Circle Model in Transition (Succession) Planning

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Twice in the course of a week, I was able to partake in a Canadian Association of Farm Advisors (CAFA) Succession Update following the 3 Circle Model http://johndavis.com/three-circle-model-of-the-family-business-system/
The three circles represent each of Ownership, Business, and Family: the critical components that hinder any business transition process. I was speaking in the business circle.

Working with family can be as incredibly rewarding as it can be incredibly challenging. The nature of living with those you work with, grew up with, and hang out with, leads itself to challenges just from being in such close continual contact. Throw in the communication challenges that every family must deal with, and it is truly amazing more family businesses don’t fail.

The illustration of the 3 Circle Model is a simple yet accurate depiction of why there can be challenges in family businesses. The root of the challenge, when tapping into the experience of experts who consult family businesses, is the relative inability of family members to separate the three circles. Issues that belong in the “business” circle often end up in the “family” circle; issues in the “ownership” circle often have heavy effects on the “business” circle; issues in the “family” circle usually ripple outward to affect both the “ownership” and “business” circles.

Success in separating the circles can only be had if all family members are conscious and intentional in their effort to recognize the tendency to let issues bleed from one circle to another and proactively manage their behavior to not let it happen. This is easier said than done.

3-circle-with-a-twistI especially like this graphic that Jim Snyder, National Director, Agricultural Practice Development with BDO, used in his opening presentation to describe the 3 Circle Model. When you think about torque, a planetary is a tremendous bit of engineering (a nice plug for all you gearheads.) Separating the three circles in the model creates a strong business and stronger family. A family affected by the crossover of issues between the circles will be in a constant state of damage control.

Direct Questions

How do you separate the issues you deal with in your family business between three distinct circles: family, business, and ownership?

When you become aware of family issues affecting business, or ownership issues affecting family, etc, how do you stop, reset, and refocus to deal with the issue and not let it “creep?”

Family business is the backbone of our nation’s economy. Are you a “family business” or a “business family?”

From the Home Quarter

There is a distinction between a family business and a business family (please contact me to discuss further.) Neither is bad, but there is a difference in mindset and approach to family, business, and ownership. Knowing which type you fall into will help you understand the challenges to be managed as you eventually navigate through the 3 Circle Model of your future business transition. Because, whether you acknowledge it or not, one day your business will need to transition. You might as well be ready for it…

ready-for-harvest

Change, Risk, and Fear

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Change brings risk. Risk brings fear.

 

“Risk and the appearance of risk aren’t the same thing.

In fact, for most of us, they rarely overlap.

Realizing that there’s a difference is the first step in making better decisions.”

Seth Godin’s Blog – Apr 18, 2016

 

Change is the only constant in life. Charles Darwin is often credited with saying, “It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is most adaptable to change.”  There is no question that when it comes to production practices, farmers’ ability to change is very apparent.

Now if that would only apply everything…

There is a change on the horizon that almost every farmer will face: how to adapt to life when he or she is no longer farming. That tune has been sung, and will continue to be sung until the message gets through. Yet, by the relative inaction of most farmers to address succession, or transition as it is often called, it is easy for those of us beating the drum to ask, “Why aren’t they getting the message?” I’m less sure that the message isn’t getting through; I’m more convinced that it is the act of facing change that harks fear into the farmer.

Risk, on the other hand, is something every farmer has an appetite for. Without it, one cannot farm. The act of dryland grain farming in its simplest form carries more risk than most non-farmers could even comprehend. Contrast that to the risk that many farmers take in relation to cash flow and debt, and I have to question their comprehension of risk.

One will not fear what one perceives as zero risk. Lacking appreciation for the financial risk from decisions that will strain cash flow and debt levels is why there is little fear of that risk. Lacking action on addressing farm transition is based on a perceived risk.

“Risk and the appearance of risk aren’t the same thing.” The financial risk that many farms put themselves in stems from the LACK of the appearance (inability to fully grasp) of risk. The avoidance of the farm transition discussion is a result of the appearance (created in one’s own mind) of risk. In both cases, the real risk is not considered, but the appearance of risk, or lack thereof, is given full credit.

Direct Questions

What is the REAL risk of farm transition activities? That the next generation won’t do it as well, or the same as you…? (HINT: your dad felt the same way when you took over and you did just fine!)

If you believe a risk does not exist if you do not acknowledge it, explain how that same theory would work with your spouse or children?

Fear is a very real motivator, or demotivator. How do you go about understanding the risk to mitigate the fear?

From the Home Quarter

With change, there is always risk. Risk has an effect on everything we do, whether the risk is real or perceived. The fear of negative (or undesirable) outcomes can be crippling. It is easy to see how change can bring immediate crippling fear now that the connection has been made.

Change the way you look at risk, and you’ll have less to fear.

 

Reinvent yourself _whats next

Reinventing

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The Olympics have now come and gone. The excitement and the drama, the anxiety and the relief, have all subsided. Real life makes its triumphant return.

Imagine for a moment what “real life” will now be like for young Penny Oleksiak. At the tender age of 16, she earned a spot on Canada’s Olympic team. In her first Olympics (please note that…her FIRST Olympics) not only did she perform well, she medalled. Not only did she medal, she won 4 medals: 1 gold, 1 silver, and 2 bronze. Now unofficially dubbed as Canada’s “Best-Ever Summer Olympian,” where does she go from here?

The pressure to be better 4 years from now at the next Olympics will no doubt be tremendous. Will she be expected to win 6 medals? All golds? What?

Imagine for a moment what “real life” is like for a phenom like Connor McDavid. At 19, he’s entering his sophomore season and is no longer a rookie pro-hockey player. According to a Google search, he’ll earn $832,500 US this upcoming season (approximately $1,071,000 Cdn at current exchange rates.) He lives life under a microscope, in the spotlight, and by being a part of the Edmonton Oilers, he is certainly a big fish in a small pond. (Enough metaphors for you?)

The pressure to be better this season, and each season going forward will no doubt be tremendous. Will he be expected to score 30 goals? 40 goals? Eclipse Gretzky’s records? What?

These are examples of two exemplary young Canadians who have worked harder, and overcome more challenges, than almost everyone in order to achieve what they have.
What happens if they can’t follow up to their early success? What if the pressure gets to them? What if they fail to meet expectations? Fear is an incredible demotivator…

Neither of these 2 young athletes will disappoint. Even if their future success is pale in comparison to what they have already achieved to date, no one can take away what they have accomplished before 20 years of age. So what if they have long and successful careers? No matter how you slice it, they will be ready to retire in the next 15-20 years…old hags in their mid-30’s.

While it is easy for us as “regular people” to glorify the thought of retiring from a professional sports career before age 40, living the good life for the rest of our days, it’s just not that easy, nor is it real. While physically my prime is behind me, now in my 40’s I have more to offer, more to contribute, and can make bigger and better change in the world than I could have as a 20-something.  Mine has been an evolution. But for young athletes, it’s a reinvention.

What does someone who was at the peak of their career, and earning power, in their 20’s do once they’ve retired in the 30’s or 40’s? How does one reinvent oneself when one was once at the top of the world? It’s got to be awfully bloody difficult to overcome the mental and emotional hurdles that threaten the efforts of these people to reinvent themselves, to find new purpose, to contribute, to make a difference…

I certainly do not envy them…

You, as a business owner, will hopefully have the opportunity to reinvent yourself. That is to mean that you’ve lived long enough to be able to enjoy retirement! It is not something to fear and loathe, it is something to celebrate and enjoy! Do not bemoan living long; it beats the alternative.

Direct Questions

Life will change, and your ability to adapt is your key to success. How are you planning to reinvent yourself for when the time comes? Who are you looking to for help?

From the Home Quarter

If you’re a farmer getting on in years, and if farming is all you’ve done, then you are likely facing a reinvention in the future. But as a farmer with decades of tenure, at least you are not reinventing yourself during a possible mid-life crisis, like a young athlete who was once on top of the world…

 

Goals and Strategy _corn rows

Goals and Strategy

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Never trade what you want most for what you want at the moment. It only leads to failure.

Those are profound words. While “failure” is not absolute, I believe in this perspective failure means “failure to reach your goal.”

What is your goal in business? What are you working for? Some business-people in primary production agriculture have defined their goals: one aggressive young farmer I know has made it clear that his goal is “to leave the land for the next generation in better condition then when he got it.” His desire for a newer tractor or more land never trumps his goal, and therefore his decisions reflect his goal.

I often speak to farmers who describe their goals as ” reducing debt” and “improving profitability” yet they trade those goals, whether consciously or unconsciously, for what they want in the moment (typically additional equipment)…which usually increases debt and can often have an adverse effect on short term profitability.

Does that mean the farm will fail? Does that mean the farmer is a failure? No. It means that there is failure is reaching the goal of reduced debt and increased profitability.

This leads me to circle back; ” What is your goal in business? What are you working for?”

We touched on this a few weeks back in Growing Farm Profits Weekly – Eat to Live or Live to Eat. It is no one’s place to tell you your goals are wrong. Just be honest with yourself about what’s really important, and expects results accordingly.

I work with farmers who acknowledge the need to have strong business goals that align with their personal goals. All of them are grateful to have some help to clear the air when making decisions and to take the emotion out of the equation. I have done the same in my own business: I have an advisor who I’ve hired to help me wade through the issues, and the emotional roadblocks, that could potentially affect my business.

Here are the Growing Farm Profits™ 3 Keys to Reaching Your Goals:

  1. Start with with a goal in mind, and set tactics later. Starting with tactics enters into a never-ending cycle.
  2. Plan for adversity, strategize how to adjust, and respond as required.
  3. Stay on course; get any and all help you need to keep from straying off the chosen path.

Direct Questions

What information do you need to allow you to clarify your business and personal goals? Who is helping you get it and sort through it?

Who do you lean on to help strategize when mapping your business and personal goals?

How do you manage the desire to trade what you want most for what you want in the moment?

From the Home Quarter

It is not unusual for farmers to get caught in the cycle of “head down, shoulder to the plough, get the work done, plant the crop – harvest the crop – sell the crop – repeat.” And after 20-odd years of doing just that, and finally looking up, most find that they’ve built something they never expected or planned for. Now facing the thought of planning for life after farming, many are asking “What now?”

Beginning with an end goal in mind is a critical key to successfully reaching that goal. Stay on course, and do not trade what is wanted most for what is wanted now.

failure to communicate

Critical State – Inability to Communicate

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A few weeks ago, we opened a dialogue on Critical State which is defined as “the point at which something triggers a change in the basic nature or character of the object or group,” or to paraphrase: something can be referred to as being in a critical state when at the point of significant change.

Inability to communicate is, in my opinion, the greatest single cause of breakdown in relationships of all types and sorts. While many other factors come into play, and often bear most of the blame, the primary cause is communication and its lack thereof.

There are virtually countless books, courses, and resources dedicated to improving communication in almost any circumstance: marriage, parenthood, employee, co-worker, sibling, etc. etc. I have only read a minute fraction of what is available on this topic, so I cannot offer insight as to which are most beneficial. But, like you, I have a lifetime of experience in communicating with others. It is fair to say that all of my communication experiences could use improvement, because to say otherwise would indicate that there was, at times, perfection in my communication interactions. Let’s be honest, there is always room for improvement.

Here are some of the most important relationships in your business that need solid communication:

Bankers/Lawyers/Accountants

Often times, when hearing banker-ese or legalese, we tend to not ask that which we do not know or understand for fear of appearing, well let’s say it, stupid. Many people have signed onto something that they did not want, nor did not understand because they were unable to communicate their questions, their fears, or their outright disagreement. The future ramifications of a lack of clarity in matters of borrowing or of law can be monumental.
When I was still in banking, I had a husband & wife client where the wife would apologize for asking what she called “stupid questions” about the terms and conditions of their borrowing package. She could have silently signed her name to the documents and fretted over her lack of confidence in what she just did, but instead she chose to ask. For her own clarity, her own comfort, and her own peace of mind, she asked. For that, I was grateful; it strengthened our business relationship. When I told them I was leaving the bank, she hugged me saying “I’ve never hugged a banker before!” I replied with a wink, “I’m not REALLY a banker; just a farmer who’s working at the bank!”

Employees

Everybody is rowing their own boat in life. It does your business no good whatsoever if your employees are not rowing in the same direction as you. Setting goals and expectations for your team, and sharing the overall business goals with your team can carry significant weight in efforts to get everyone “rowing the same direction.”
I’ve learned about a number of farm businesses that have taken the proactive approach: involve the team in goal planning, provide regular feedback, reward good performance. The most successful farms treat their employees not like employees, but rather like trusted partners who have a vested interest in the success of the business, and communicate with them accordingly.

Family and/or Primary Relationship

I will go on record saying that all “problems” in family and/or primary relationships will trace back to communication. Whether communication be the final straw or not, communication likely led to the behavior that became the final straw.
I was very impressed in meeting a young farmer earlier this year. When he came home to farm a decade or so ago, with his would-be wife, his father made clear with him and his non-farming siblings how the farm would transition. There was no ambiguity; no one could complain; there are no hard feelings today. Consider how things could be today when we acknowledge how successful this farmer now is, and how much wealth he has built in his operation…lack of communication could lead to unreasonable demands from family members, and the potential for critical state.

Direct Questions

Does fear ever affect your communication? How do you manage it?

How would you rate your ability to share positive feedback versus negative?

From the Home Quarter

Lack of communications, or an inability to communicate, will lead to critical state in a sneaky kind of way. If one doesn’t notice that communication is breaking down, over time it will snowball into a major issue. Everybody has a breaking point. It’s usually wise not to let things get that far, not matter which relationship we talk about.

 

family succession

Critical State – Lack of a Succession Plan

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I have been incredibly impressed with the service and quality of work at Queen City Glass. I stumbled onto them a number of years ago when I got a stone chip on my truck’s windshield right at the the beginning of a November cold snap. I knew that tiny chip would spider-web in a big way the first time I cranked on the windshield defroster. Going to the glass shop I had frequented up to that point and being told to come back in 3 days or so, I was about to accept the fate of my front glass when I drove by Queen City Glass. With nothing to lose, I whipped in to see if they could help me out.

They took me right in without an appointment and did a great job of repairing my windshield. I didn’t have glass coverage at that time so the fee would be coming out of my wallet. Not knowing what to expect, having never paid for a windshield repair before, I was happy with what they took from me.

While I was waiting for the work to be done, I learned that they do all kinds of glass, almost anything that one might custom order. The guys in the back were sharing stories of building display cases for jewelry stores and fighting with 10′ high panes for shopping mall store fronts. They admitted to doing a lot of work for antique cars, as well as farm equipment.

Coming back from a recent client meeting, my windshield got hit by a rock which left a chip. Almost as big as a quarter right away, I knew I had to get the damage repaired soon or it would be too big to fix. I pulled over on the highway at about 2:20 pm and called Queen City Glass. They told me if I could get there by 3, they’d have me done in time to get to my 4pm obligation. One of the owners was doing the work on my truck. After he shared with me the story of the company’s ownership,how his father acquired the business in the 1960s and has since passed it down to him and his sister, I asked him what was his succession plan. He replied, “Freedom 85, man!” I clarified that I didn’t mean his retirement plan, but the plan for the future of the business when he and his sister no longer want to work it (sometime after he turns 85 as per his declaration.) He admitted that there is no interest from the 3rd generation to own and operate the business and that if it couldn’t be sold, it would probably close.

As I stood in that shop and considered all the amazing glass work that would have been done there over the years, including a turn-of-the-20th-century hand carved piece of furniture in which they were installing a custom mirrored back that very day, I realized what a shame it would be to not have this business carry on what is most likely a storied legacy. As the late great George Jones once sang, “Who’s gonna fill their shoes?”

Direct Questions

Family business is the backbone of Canada’s economy, and farms are often the most enduring of all family businesses. What is your plan to ensure the progression of your farm carries on?

With family or without, you have opportunity to transition your business without selling everything. What options do you have beyond immediate family?

Whose gonna fill YOUR shoes?

From The Home Quarter

Queen City Glass will be at the point of critical state when one or both of its current owners decide they’ve had enough work, and want to retire. I would argue they are at the point of critical state right now, if not very close to it. With no succeeding generation currently involved in the business, should either of the 2 owners become disabled or killed, the business would likely face an immediate upheaval and could be forced into a final closure. Any family business in any industry without a succession plan faces a similar potential fate; none are immune. If you are the beneficiary of a proud family legacy, what are you doing to ensure that legacy continues?