Planning helps gain better understanding of the future

I wrote an article in November 2017 about two possible future states for farm families.

One is the future shaped by what will happen simply as a matter of course. The other is the future formed by what farm families set out to purposefully work to accomplish.

If your preference is with the latter, an inherent challenge is that individual family members, working together, will typically have different ideas and opinions about the future that they would like to see. So, what to do?

This is the tricky part. People will comment that planning has less value to them because they don’t know what’s going to happen in the future. Of course that’s true. No one does, the competition included. But that is actually one of the key benefits to planning — gaining a better understanding of the future.

There’s a saying, and I believe it to be true, that there’s significantly more value in the process of planning than in the finished product.

This is because the process of planning requires that we spend time thinking about our business and what we would like to see happen.

When things happen in the future that weren’t anticipated, both good and bad events, we have a plan in place to assess the impact of the good or bad things and react accordingly. In the absence of a plan, we are left to deal with them as they come.

The plan gives us a better chance at being prepared. The preparedness won’t guarantee outcomes but it will put context to the discussion that needs to happen when the events arise. The greater the potential impact of the good or bad event, the greater the benefit that accrues from having a plan against which to assess different outcomes. This can only be helpful.

If we’re going to use a plan against which to evaluate progress and assess the costs or benefits from different opportunities that come along, then we need to have some way to measure things, a way to put our heads around understanding what’s going on at the time. Measurements that can be used will be quantitative and qualitative. In other words, numeric and non-numeric.

Desired end states are statements that define where we want our business to be in the future. The end states can be organized into key management areas:

  • operations
  • marketing
  • human resources
  • finance
  • technology

Here’s an example of a desired end state for the operations area of a dairy farm that I’ve been meeting with recently. Its time horizon is three years.

“We will have a 300-cow milking herd in place that fully utilizes our existing physical structures that include both the barn and the milking parlour.

“We will have a land base in place that ensures we have the internal capacity to produce sufficient feed for the milking and dry herd, and for replacement heifers.”

This statement defines the desired future for the operations component of the dairy farm. They are not currently milking 300 cows but have the barn and parlour capacity to do so. For this family, what do they need to do (step by step or action by action) from an operations perspective to give them the best chance of milking 300 cows and producing their own feed?

It would be similar for a grain farm that has people and equipment in place to handle more land. Questions arise. What are the plans to add more land and how do those plans line up with where the family wants or needs the farm to be in the future? The desired end states collectively bring definition to the future. They help in understanding what has to happen in each of the key management areas along the way.

As a farm transitions from one generation to the next, a change in management is required.

Bringing definition to the end states helps a farm family understand what those changes are in each of the key management areas.

Working to address the changes gives a farm family a better chance of getting to their desired future. This is the future the family will work to make happen as opposed to the future that will come along as a matter of course. This is less about que sera, sera and more about what a farm family can work on to make the future become what they envision.

Terry Betker, P.Ag, is a farm management consultant based in Winnipeg. He can be reached at 204-782-8200 or terry.betker@backswath.com.

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