Review, reaffirm and rethink: How to keep your strategic plan alive and kicking

You’ve now completed a comprehensive plan for your farm business, conducted a thorough review of processes and procedures and you understand risk and where you feel comfortable growing and challenging yourself.

It’s been an important journey with lots of challenging yet critically important work. Everything we’ve examined and done so far is in the name of helping you achieve greater success at your farm and business.

One thing that never changes if you have a working farm or business – creating and executing strategic plans. As one ends, it’s time to create another with exciting new goals, ideas and possibly even vision and mission statements.

Summary of what we’ve learned

With so much to look after at the farm, it’s imperative to have well-designed plans with close details such as processes and procedures and overarching information like mission and vision statements and risk management strategies.

1. Ideate. We started by dreaming big and then distilled it to create a coherent and concise set of mission and vision statements. That was vital because now we’ve learned what our business is about – and not about.

2. Test and evaluate. With that box checked off, we assessed our environment — from business to weather and markets to strategic advantages — to help us better understand what we’re up against with our farm and business. We introduced the SWOT concept to help drive efficiency and be honest about our goals and operations.

3. Integrate. We took our SWOT answers and began to use them as a tool to carry out decisions both small and large. By understanding the strategic advantages of the farm business, it became clear how we could integrate and prioritize change into daily farm life, focusing on what would provide long-term, stable success.

4. Confirm objectives and risk. With a fresh plan in place, we waited. This was done to allow us to review and measure our objectives by understanding our risk appetite. This is important because these invisible boundaries aren’t known until we bump into one. Understanding risk is one of the most important things we do on a farm and learn about ourselves.

5. Operationalize. By understanding where our internal and external risks lie, we began to operationalize, which is to say we maximized our operation. We became familiar with goals, risks and our appetite for both. We adjusted both planned and ad hoc to maximize profit, efficiency or other opportunities at the farm or off-farm.

6. Monitor and measure. Most importantly, we continued to monitor non-stop. We do this by getting software, processes and practices in place to achieve this. As we monitor, regardless of frequency, we become better farm managers by not always sitting still watching progress reports but, rather, trusting in the data. We implement strategies and processes that enable us to succeed and not always be pinned down because we must monitor our farm and farm’s progress or employees’ progress on different things.

7. Review, reaffirm and rethink

With any farm or business, there will always be times to review progress, procedure and productivity. Often this can be done as overall projects are completed, or individual components of projects wrap up. These natural breaks in the farm schedule often allow for a chance to perform a “state of the union” within our operation.

Time set aside to perform this kind of review is important because the farm is busy, and if we’re not intentional with our time, it disappears. We all know the feeling when best-laid plans go awry for one reason or another. Often this is a result of ad hoc planning, and sometimes, it‘s out of our control.

Review This could be as simple as looking back at what was done last week compared to the initial goal set out.

Example: Did all the combine belts get changed before harvest as requested?

Reaffirm Just as important as changing operational plans is to look back on something that was a complete win and went exactly according to plan. Not only does this help underscore confidence from others in your management group and employees, but it also reminds you that the work you have done throughout articles 1-6 is now bearing fruit and paying dividends.

Example:  Hiring the agronomist with specialized training to your crops — and not trusting your general knowledge from ag college — paid off huge, with soil testing showing a two-fold increase in organic matter and above-average contracts due to crop quality. Perhaps with a slight adjustment, we can make next year even better.

Rethink Sometimes, when a major event happens either within or outside our control, it can cause us to rethink our next step.

Example: With a nearby berry processor shutting down, what does this mean for my freight and logistics costs?

Putting the 3 Rs into action

There are many times throughout the year when it makes sense to not only assess ourselves but adjust plans, as well. Often, we may undertake these actions at established intervals or simply conduct a review analysis when different signals dictate, such as market forces, weather woes, logistics issues and more.

There’s never a “normal” year in farming, but when the season progresses with relative ease, it’s good practice to perform these three Rs at established intervals.

We may Review before and after each key season while we may Reaffirm on the fly and later review annually. Depending on events surrounding our farm and the economic climate, a Rethink may be in order. At times, Rethinks can last years as they can fundamentally alter the trajectory of our farm business. Allow yourself time to complete this important R work.

Review: Ensure we track all finances for tax and business purposes.

Reaffirm: Conduct quarterly and annual reviews with our accountant for an accurate picture of our true finances.

Rethink: Shift to accrual-based financial reporting to generate a more accurate picture of the farm’s finances for the future health of the business.

Throughout any of these R values, you must decide who you’ll involve and why. Consider the good to great reminder that what brought your farm or business to its current level of success won’t necessarily get you to that next height of success. At times we need to bring in external partners and outside resources. These are not free, but ask yourself, what’s the cost of doing business without them?

Farm example: You acquire a new quarter-section of land between crop years. To date, you’ve been relying on your agronomy courses from college and knowledge of the land. However, this time it’s a different soil and climatic zone. Rather than spend $15,000 on an agronomist to advise, you continue to rely on your field sense alone. However, you haven’t kept up with current crop production research and end up making an unprofitable decision with a new rotation and series of new-to-you crop protection products. You saved $15,000 not hiring an agronomist, but poor production costs you more than $80,000 in yield potential.

Go easy on yourself by establishing pre-set times for these events to take place. You can mentally begin to prepare well in advance for important conversations.

This process is no different than your personal life and a five-year plan you may have for yourself. That plan changed, so why wouldn’t your business plan? Your business has a degree of fluidity to it, and that’s both normal and expected. Rigidity can be a lifelong trap for people if they don’t understand the need for flexibility. You’re flexible – why wouldn’t your strategic plan be?

Watch the signals

If one or more of your measures or objectives set out in your strategic plan are not being met, this may indicate that you’re off track from your objectives, which relates directly to your mission in Article 1. So, what’s your next step? You must figure out what’s going on and rectify the situation.

It may be an easy fix, or it may be something bigger. If obvious solutions don’t naturally spring up, it may signal a bigger issue than first suspected.

Farm example: Jim and Suneeta begin to receive fewer and fewer phone calls from nearby breweries to purchase their hops. The COVID-19 pandemic meant that breweries have struggled, too. They began to source cheaper hops from larger, more centralized suppliers to save money. This cascading effect is now impacting their plans for future growth. Jim and Suneeta are suddenly not meeting some of their internal targets and must readjust. With no clear solution presenting itself, they realize they need to enlist outside resources and partners to help rethink their farm business plan.

Lean into your carefully crafted plan

What was once an overlooked area of the farm has now become central to most operations. A strong plan is set up and designed with your input to work for your farm’s needs. Rigid planning systems don’t serve us well, and many now opt for a system of fluidity.

However, planning systems only work if you set and manage expectations accordingly. Setting up the system is just as important as standing back and letting it run. Automation and customized alerts and notices from a system underscore the importance of the need to disconnect from monitoring your farm 24/7 and helps prioritize mental health, as well. Knowing that all your vital data will be collated into a centralized system can afford a piece of mind unlike anything else.

Be open to what the system can teach you, too. Sometimes we are unaware of what we do not know. Since we have natural skills and talents in certain areas and not others, learn from the system where you admittedly lack acumen. This is where your comfort level around trust and risk management will be put to the test. Trust that the system capturing financial information is telling you the truth—after all, this is what it is designed to do. Sometimes seeing information in a new way helps you skill up in this area and grow personally and professionally.

Such systems can be more helpful than we realize. If something is not going according to plan at the farm, our planning system can alert you of a deficiency or operational lag before even realizing an issue. Having a system that works for you behind the scenes more than pays for itself and allows you to focus on the task at hand, which is being the best farm and business operator you can be.