January 19, 2018
Managing in 2018 - You and Your Board of Directors
Illinois FBFM Association and Department of Agricultural and Consumer Economics
University of Illinois
farmdoc daily (8):10
Recommended citation format: Krapf, B., B. Zwilling, and D. Raab. "Managing in 2018 - You and Your Board of Directors." farmdoc daily (8):10, Department of Agricultural and Consumer Economics, University of Illinois at Urbana-Champaign, January 19, 2018.
Successfully managing your farm business is an ongoing process. There are many resources, tasks and processes to manage. Being self-aware of the many things that vie for your time and attention can help you prioritize your list of skills to master and tasks to accomplish.
Dare to review all aspects of your farming operation with fresh eyes and a fresh attitude. That review may reveal deficiencies in your skills and abilities to best manage. Be bold and seek others who have skills that will compliment your own. Why not leverage up the maximization of your after tax net worth by improving efficiency and profitability with the wise counsel and advice of others.
Owning and operating your farm business can be lonely. Without trusted outside advisers it easy to succumb to 'breathing your own exhaust' and not extract the potential of your farming operation. The current environment of low margins means that you must operate your farm at peak efficiency and the assistance from a 'board of directors' can make a difference. Improving your business by seeking the counsel of others with expertise in areas where you lack can help you guide your business to success.
Consider the type of experts you can rely on as you build your group of trusted advisers. Investing in people to help counsel you is as important as investing in equipment and land. This investment in expertise from others might be one of your best investments of 2018. Consider these areas of expertise as you seat individuals on your board of directors:
- Legal counsel - both general counsel and estate/transition counsel
- Financial/tax counsel
- The counsel of a seasoned insurance agent to assist in mitigating risk
- Technology Expert
- Other business partners who understand your operation and can add perspective to you as you manage your farm. For instance, if livestock is a part of your farm, a veterinarian can add valuable expertise to your board of directors.
The point is to capitalize on the knowledge of others in topics where our own attributes don't bear fruit. Don't let your own faults and weaknesses obscure your potential to succeed. We don't have the time or interest to excel at everything; so find others that can help you see things differently and challenge the way you operate your business. Consider the strengths you possess and use them - then complement them with the expertise of others.
When you are accustomed to running your own business, you may need to pray for patience and bite your tongue when taking advice from your board of directors. Listen carefully to their evaluation of your opportunities and take notes you can refer to at a later date. Be picky. Make the most of the expertise of the members of your board of directors. Get recommendations from others as you put together your 'dream team' board of directors. Ask others you trust and who they use for counsel and guidance. Don't exclude those outside of agriculture - there is much expertise and counsel that can transfer from non-agricultural businesses that can provide insight on the road to success.
On purpose, seek advice and counsel from those who may not think like you. The quote from Gen. George Patton applies: "If we are all thinking the same ... then someone isn't thinking." Think of your advisers in terms of a professional sports team. Every major league manager would like to have a bullpen of good pitchers, but you can't play nine pitchers at the same time. You need good hitters, good fielders, some speed and, yes, that good pitching.
Your board needs the right combination of expertise to help you manage better. We all have different gifts. Look for people with gifts you can use to your advantage to seat on your board.
Your board is your team and good team members have the ability to assess the strengths and weaknesses in people, including their own. Find board members to help you succeed by building on their strengths and by asking them to help compensate for your weaknesses. You'll need people with the ability to assess your skills objectively. Better managers generally can find advisers they respect, people with whom they can be open and from whom they can receive honest and objective feedback.
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