Why your farm needs a CEO

Q: WHY SHOULD A FARM HAVE A CEO?

A: The role of Chief Executive Officer (CEO) in a farm business isn’t new, but it’s becoming a reality today. Previous generations of farm owners didn’t need a CEO, but the value of farms today requires someone in that role, or at least someone with a CEO mindset.

Canadian farm businesses have just witnessed the largest land-value hike in history, and if owners want to continue the legacy, they need to be business-savvy to manage these now multimillion-dollar operations, for today and the future.

Over the last decade, real estate has become the primary driver of farm values (and agriculture in general) rather than farm profits, like it has been in the past. This shift in the value of farms alone makes a case for the need to manage a farm business from a CEO’s perspective, because many of today’s farms are multimillion-dollar businesses. That means farmers need to know how to separate business from personal on the farm to keep it profitable, make business-focused decisions, put people with the right skills in the right roles, and know when and where to invest their time and money to be successful.

It wasn’t that long ago, maybe 20 years, that farmers could drive profits by going to the field and working harder. Today, a farm’s bottom line can be determined at the computer, where million-dollar decisions are being made. Farmers need to embrace this change and start thinking like a CEO.

Q: IN THE SUCCESS OF A FARM OPERATION, WHAT ROLE DOES A CEO PLAY?

A: There’s a big distinction between an entrepreneur and someone who is ‘taking over the family farm’. You can be both, but you have to manage the farm like a business.

A CEO understands there’s a clear distinction between business and personal on the farm and can balance those priorities. They are decisive, have a team of skilled people to support them, prioritize systems and processes, and communicate effectively.

An effective CEO knows how to delegate and surround themselves with the right people in the right roles. This requires knowing the strengths and skills of your family, staff, and advisory team so you

can build a collaborative culture. Delegating is crucial for allowing the CEO to focus on managing the farm as a business. Effective CEOs also empowers their team by assigning responsibilities and leadership roles.

Q: TO MANAGE A FARM, WHAT SKILLS DOES A CEO REQUIRE?

A: The first question a farm business owner needs to ask themselves is, are they the right person to be the CEO of the farm? Just because you own or currently run the farm doesn’t mean that managing a business is your strength or something you enjoy doing. And if it’s not, that’s okay. The important thing is to recognize your own strengths, interests and limitations so you can contribute the best you can to the farm. And if you need to find someone to fill that CEO role, start by looking around you—is there someone in your family, already working for you, or an advisor that works with you who has the interest or skills to act and think like a CEO?

Thinking like a CEO also requires farmers to understand the importance of having procedures, people and processes that can ultimately transform the farm into a self-managing enterprise.

Financial acumen and knowing your farm’s financial numbers inside and out are also necessary. Human resources and the ability to delegate are essential, too, as is communication. It’s important to establish when and where discussions are held, and adopting a CEO mindset will help you separate the farm business from personal life. For example, recognizing when to leave business discussions at the office rather than bringing them home.

Decisive decision-making is also an essential skill. When it comes to making farm business decisions, the CEO needs to keep emotion out of decisions. It’s not easy, but CEOs who run multimillion-dollar companies don’t make decisions based on their feelings or their gut; they make decisions that are grounded in facts, data and hard numbers. You can still hold business meetings at the kitchen table, but they need to be run with a CEO mindset.

When it comes to learning these CEO-required skills, I recommend farmers look to coaches, mentors, peer groups, and advisors. The best way to learn is to ask questions and always stay curious. •