Wow! Wasn’t 2009 a real tragedy in terms of overall cash flow and bottom line results? It was absolutely pathetic for most producers. Since then dairymen have been enjoying the fruits of higher milk prices. How can we avoid revealing the same calamities again? What could you have done differently as a manager? These are critical items to spend some time on.

Previously, I talked about how to come up with ideas to improve your operation and implement positive change. “The Best way to manage change successfully is to create it.” Peter Drucker in his book, The Daily Drucker, discusses how to be a Change Leader! “One cannot manage change. One can only be ahead of it. In a period of upheavals, such as the one we are living in, change is the norm. To be sure, it is painful and risky, and above all it requires a great deal of very hard work.”

You’ve probably heard about the Harvard Business School study regarding the value of having clearly defined goals and a written plan designed to achieve them. 3% of the study’s respondents had a “written, specific plan” for what they wanted to achieve. 10% of them had a “general set of goals” with no definite plan. 60% of those surveyed had only “survival goals” that would allow them to live day to day. The final 27% had “no goals”. When the study was completed 20 years later, people in the 3% group with definite written goals had out produced the 10% group by over ten times. In fact, this 3% group had amassed greater wealth in those 20 years than the entire other 97% of those surveyed!

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Let’s face it. The days of the “handshake equals dairy loan” are long gone! Actually, it’s been that way for 25 years.

At a Leadership Conference at Duke University, I heard a keynote address given by Duke’s head basketball coach Mike Krzyzewski entitled “Building a World Class Team.” His message centered around his experiences during 2005-2008 developing the USA Basketball Team that competed in the 2008 Summer Olympics in Beijing, China. He also outlined what he felt are the primary keys to positive leadership and sound teamwork.
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We each need to remember that a banking relationship, just like a good marriage, is a two way street. We need to always be showing improvement in our operating results, demonstrating we have a clearly defined plan with reliable historical numbers and sound cash flow projections.

The years 2000, 2002, 2003, 2006 and 2009 all had something in common for me. They were years when I had the challenging opportunity to assist dairymen by helping them turn their business situations around and getting them on a more successful path.

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Since December 2008, I’ve heard a lot of people stating all the things they can’t do:

  • I can’t get my bank on board for the changes I want to make.
  • I can’t get production where I want it to be.
  • I can’t get feed costs down.

Please allow me to offer a few suggestions:
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For a fascinating example of speed and action combined, just watch what happens in the pits at an Indy car race. As outlined in Fast Company’s book The Rules of Business, there are four primary rules that guide both the driver and his pit crew in their respective roles.

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Win! That is what we do when we clearly establish the items that are most essential to be completed right now, also represented by the acronym WIN, “What’s Important Now?” Recently, I was working with one of my clients to determine how many of their 2009 objectives they had accomplished. They were amazed that each and every one of their goals and objectives had been accomplished! They also had “dodged the bullet” on all three of the “worst possible events” that they had estimated could happen during the same time period.

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