Leading through change

FARMERS NEED TO adapt to changes in social expectations and political agendas while facing the economic and environmental challenges of maintaining a successful farm business. It’s not always clear what the next big issue will be, so it’s important to have the right tools to deal with any situation that comes along. As business owners, farmers need to lead through change.

At the 2017 March Classic, Grain Farmers of Ontario’s annual conference, four guest speakers provided inspirational guidance and practical advice on how farmers can handle the ever-changing farm business landscape.

LEADERSHIP IS ABOUT PEOPLE

“As a leader, if you focus on the people that make you successful, if you inspire them to be a part of whatever it is that you are doing, you’re going to be ok,” said General Rick Hillier, Canada’s former chief of defence staff.

Hillier, who served in the Canadian military for more than three decades, says the simplest way to inspire someone is to prepare them to do the job and equip them to do the job well. But part of inspiring people is also having a vision which allows you to set priorities.

“People want to be part of something and contribute to a bigger vision,” he believes. Hillier said you should have three to five priorities and once they are set, you need to ruthlessly protect them. That makes communication an important part of your business. “Its hard work but the power of it [communication] is so incredible because people become one with you and you truly build a team.”

Hillier says many leadership lessons come from those who have gone before you. For instance, his study of Vimy Ridge taught him that, “it’s not the victory that’s important — it’s the way in which it was done.” He noted that Canadian soldiers achieved victory in this battle because they had visible, real, courageous, and ethical leadership from the front, they worked as a team, the military was a learning and innovative organization, and individuals were empowered.

Hillier said the power of one person can be incredible if you empower them to make a difference.

“Find your inspiration wherever you can,” Hillier said. “The first place we always looked was the men and women amongst us because I always found them inspiring. That’s what kept me going. That’s what made me love to be a soldier every single minute that I wore the uniform.”

RECOGNIZING OPPORTUNITIES

According to David Frum, business people have to deal with facts and the Trump Administration is a fact. Frum is a political commentator who shared his views on how the results of the 2016 U.S. election could affect Ontario farmers and global trade.

Frum believes large tax cuts will create fiscal stimulus through higher consumer spending and they will stimulate economic growth through capital investments. He said there is already a measurable rise in consumer confidence.

Another piece of good news is the expected elimination of what Frum calls ‘petty, harassing regulation’, such as the minute regulation of all waterways — including seasonal drainage ditches — by the Environmental Protection Agency (EPA).

Financial reform regulations that were put in place after the 2008 crisis are already being eased, which Frum noted will make consumer lending easier.

Overall, Frum said, “2017 is shaping up as a really positive year. More investment, more growth, more demand, more consumer positives.”

When it comes to the bad news, Frum indicated the biggest concern for Canada and the world are the strong protectionist instincts of the Trump administration. Frum’s point bore out in April when Trump targeted the Canadian dairy and softwood lumber industries.

Another negative point in Frum’s view is the trend towards higher interest rates which he said are difficult for not only modern companies to cope with, but also governments who accumulated enormous amounts of debt during the financial crisis.

However, Frum also noted as interest rates go up, so does the U.S. dollar. “As Canadian exporters you might welcome that because it makes your products cheaper for American consumers and it makes the money you receive from your customers more valuable to you. But remember, this is a protectionist administration — there will be decreasing imports into the United States and a ramp of exports out of the United States. They are going to see that as a challenge and that will drive them to more and more protectionist actions; and that is really dangerous.”

Frum also worries about the decline in public integrity, the unpredictable and unstable nature of the Trump Administration, and the potential for conflict with both allies and foes.

IN TRANSITION

Family conflict can be difficult to avoid when the subject of transitioning leadership and ownership of the farm arises. Jolene Brown, family business consultant, believes it’s better to work through those problems early on rather than for families to be fighting on the way to the funeral home.

The first thing she does when she meets with a family is ask the senior generation if they have taken care of their needs. “People have to live until they die. What are you going to live on and how are you going to live?,” she asked March Classic attendees.

She recommends the advice of financial advisors and accountants who say at the time you are transitioning the business, you should have 50% of your financial needs being met by sources other than the farm business. “Otherwise you will micro manage the next generation because they are messing with your security and you will never transition control and ownership.”

The start of a transition process should happen when the younger generation begins to work on the farm. Brown said that every family member needs to know what they are bringing to the business in terms of energy, capital, and labour, and the bookkeeper needs to keep an accounting of what each person costs the business every year.

“What you pay these people should fit into the cash flow of the business, not the net worth,” said Brown.

She also recommended that you put all aspects of the business in writing, from a formal business plan, to a code of conduct, to daily roles and responsibilities. ”Business first families have something in writing,” Brown said. “Quit presuming a conversation is a contract.”

This includes defining clear financial expectations for siblings who aren’t involved in the farm operation.

“The way you honour your family is by doing the business right,” Brown concluded, “because you have taught them that without communication, cooperation, and commitment you can count on resistance, resentment, and revenge.”

CHANGING THE CONVERSATION

Farmers are one of the most trusted professions in the country, and yet one of our biggest challenges is the negative perception of how we operate our businesses.

“Changing a perception is one of the most difficult tasks you can give to marketing”, said Terry O’Reilly, broadcaster and marketing expert. “People treat perceptions like possessions and they don’t give them up easily. Changing the behaviour of the public is never easy but it’s not impossible. It takes insight, it takes strategic thinking, it takes patience, but it can be done.”

O’Reilly says the first step is to dig for insight — look for meaning instead of facts — that will provide you with a leverage point that will make people re-evaluate you.

“The image of your brand hinges on the perception of the product, not the actual qualities of the product,” noted O’Reilly. “Your brand is one of your most powerful assets. Like anything of value, it needs to be protected and nurtured and somebody really has to worry about it on a daily basis.”

O’Reilly said the perceptions your customers have of your industry (your brand) is critical because a strong perception creates good will that can be banked and drawn on in tough times. “If people feel strongly about you they will ignore negative rumours about you in the marketplace and that’s why you have to make sure your brand is unique and compelling.”

“So while telling the public what you stand for is important, telling them also what you stand against makes you much more interesting, much more memorable, much more three dimensional rather than two dimensional which most marketing is.” •