Unnecessary Roughness?

Wow! My Client was irate, possibly just plain hurt, by the negative commentary. As you know, the years of 2015-2018 were tough years for profitability in the dairy industry and some other agricultural sectors as well… He had met with his loan officer, and despite being profitable in both 2019 & 2020, this is the message he caught: “You are a problem loan!”

What? Problem loan customers don’t show profits for two years in a row, reduce their Accounts Payable by over $200,000 and also service their debt structure as agreed. Oh, and did I mention that the Client’s Loan to Value was 60% on his herd loan and 80% on his feed line, along with an excellent diversification plan in place?

The point is this. If we had been playing football, the loan officer would have been flagged for unnecessary roughness! I understand that being a loan officer is not an easy task, but being one also doesn’t give him or her a license to be a butt-head either… The job isn’t that difficult. I know, because I did it successfully for eight years. My message for this loan officer is one that comes from former President Teddy Roosevelt, who said:

“Complaining about a problem without proposing a solution is called whining.”

Now, more significantly, what can you do, as a borrower, to avoid being the recipient of such “unnecessary roughness?” I’d suggest the following items, which this borrower had already put in place:

  1. Monthly tracking & reporting of Inventories & Accounts Payable.
  2. Monthly Cash Flow Analysis of your operations. Remember, if you measure it, you can understand it. If you can understand it, you can control it, and if you can control it, you definitely can improve it!
  3. Regular CPA Prepared Financial Statements, at least 2X per year.
  4. Positive goals that seek to boost profits long term.
  5. A Diversification Plan in place to survive the downturns.
  6. A Plan that includes opportunities to evaluate, adjust course and implement the process.

Following these steps doesn’t guarantee that you won’t become a target of “Unnecessary Roughness,” but I assure you it will prepare you for greater levels of success and the ability to stave off any success comments.

I urge you to please join me in making the changes we need to in order to succeed and prosper! As we move forward with my Next Level Thinking™ blogs, I’ll start my focus on the benefits of “Upstream” thinking from Author Dan Heath. If I can assist you in any way prior to that, please reach out at john@success-strategies.com or at 209-988-8960.

What Just Happened?

The realization is now – Written by Marketing Expert Seth Godin

*** I wanted to share a copy of Seth’s article with you, simply because I believe it has a fantastic message, one that could serve as a sound directive to get our country and hopefully keep your business on track in so many ways. This was actually written five to six years ago. I hope you enjoy his thoughts, which fit almost every industry (The italicized items are my comments.):

“New polling out this week shows that Americans are frustrated with the world and pessimistic about the future. They’re losing patience with the economy, with their prospects, with their leaders (of both parties).

What’s actually happening is this: we’re realizing that the industrial revolution is fading. The 80 year long run that brought ever-increasing productivity (and along with it, well-paying jobs for an ever-expanding middle class) is ending.

It’s one thing to read about the changes the internet brought, it’s another to experience them. People who thought they had a valuable skill or degree have discovered that being an anonymous middleman doesn’t guarantee job security. Individuals who were trained to comply and follow instructions have discovered that the deal is over… and it isn’t their fault, because they’ve always done what they were told.

This isn’t fair of course. It’s not fair to train for years, to pay your dues, to invest in a house or a career and then suddenly see it fade.

For a while, politicians and organizations promised that things would get back to normal. (Remember, this was written 5-6 years ago, not during our recent pandemic… It’s fitting today, though, isn’t it?) Those promises aren’t enough, though, and it’s clear to many that this might be the new normal. In fact, it is the new normal.

I regularly hear from people who say, “enough with this conceptual stuff, tell me how to get my factory moving, my day job replaced, my consistent paycheck restored…” There’s an idea that somehow, if we just do things with more effort or skill, we can go back to the Brady Bunch and mass markets and mediocre products that pay off for years. It’s not an idea, though, it’s a myth.

Some people insist that if we focus on “business fundamentals” and get “back to basics,” all will return. Not so. The promise that you can get paid really well to do precisely what your boss (…or government leaders claim) instructs you to do is now a dream, no longer a reality.

It takes a long time for a generation to come around to significant revolutionary change. The newspaper business, the steel business, law firms, the car business, the record business, even computers… one by one, our industries are being turned upside down, and so quickly that it requires us to change faster than we’d like.

It’s unpleasant, it’s not fair, but it’s all we’ve got. The sooner we realize that the world has changed, the sooner we can accept it and make something of what we’ve got. Whining isn’t a scalable solution.”

I urge you to please join me in making the changes we need to in order to succeed and prosper! Next month, I’ll start my focus on the benefits of “Upstream” thinking from Author Dan Heath. Stay tuned. If I can assist you in any way prior to that, please reach out at john@success-strategies.com or at 209-988-8960.

The Search for Meaning – What Does That Really Mean?

I wanted to take this opportunity to revisit a story that I had written in a previous blog almost three years ago. In spite of the difficulty we have faced with our economy at times during the past ten years, we certainly have a lot to be thankful for. Frankly, I couldn’t think of a better way to remind ourselves of this than to look at the story of Victor Frankl once again. I hope you can relate.

Throughout the crazy events sometimes surrounding us, it’s often difficult to find meaning – in effect, to make sense of things that are occurring every day. Victor Frankl was a survivor of the Auschwitz Concentration Camp in Nazi Germany. Many entered Auschwitz; few survived. Victor Frankl in his book entitled Man’s Search for Meaning explained that the key to survival was that people needed to do six things. There may be some sound guidance for us here, too.

First, he said, “Realize that the game of life has changed.” Isn’t that applicable today in all industries? As Frankl stated, the old game is over, a new game has begun. That’s true for you and me, too. We’ve got to operate under a new set of assumptions because the old game is over. Be prepared & remain open to change – it’s coming faster than ever!

Second, every day, you must find something beautiful. For Victor Frankl, from his cell, he could see a mountain range. For us, maybe it’s a sunset.


Third, every day, you must find something humorous, something funny. For Frankl, it may have been the way one of the guards walked. As you face the stress of working through any difficult situation, find some humor each day. Trust me. We all need some.


Fourth, every day, you must find something to be grateful for. Instead of focusing on what we’ve lost or what you don’t have, try to focus on what you do have; something you are grateful for!


Fifth, every day, you must find some way to be useful. For Victor Frankl, it was helping other prisoners in the concentration camp by listening to them. What will it be for you? How can you be useful to someone else or to your industry today?


Finally, every day, you must find something to help you prepare for the future – a big goal, for example.  We all need a bigger goal beyond this current experience. For Frankl, what kept him going was his goal to write his book: Man’s Search for Meaning.

As Dan Sullivan, founder of The Strategic Coach organization says, “All progress starts by telling the truth.” So, remember, as Victor Frankl stated, realize the game has definitely changed. We’re in a new experience. The sooner we realize this, the sooner we’ll be able to reach new objectives. Also, don’t forget the other five steps to success:

Every day, find something:

  • Beautiful
  • Humorous
  • Something to be grateful for
  • Some way to be useful to others
  • A reason to prepare for the future – A Goal!

Try this today. It works far better than complaining, especially on items over which we have no control… As Teddy Roosevelt said:

“Complaining about a problem without proposing a solution is called whining!”

Who Is This Guy?

As we wrap up the year, which has been a difficult one, I wanted to share with you a story of Howard Hill, perhaps the greatest archery performer ever. They say that, not only could he split an apple on the top of someone’s head successfully. He could split those halves a second time, and thank you, but “No, I’m not really interested in holding the apple…

I only tell you the story because as you wrap up you year, I want you set some, as Jim Collins calls them, BHAG’s, i.e. Big Hairy Audacious Goals!!! Make them big and challenging. The bigger the better!

  1. Define it clearly.
  2. Lay out the steps to get there.
  3. Determine who will be involved.
  4. Set a deadline for the completion of these steps.
  5. If you hit snags (Welcome to life…), adjust your course, as needed.
  6. Then, go forward, and “take no prisoners!”

As you prepare for next year, I want to state that you can hit your target better than Howard Hill. I’d just have to blind fold him & spin him around until he was dizzy & could barely see. I know what you are thinking. You’re saying, John, that just wouldn’t be fair. No one hit a target they cannot see…

And, you know what? You’d be absolutely correct. The same holds true for you. You cannot hit a goal that you cannot see! You have to literally “Go for it!” You may recall what I suggested in my last blog:

  1. Determine what you want to pursue now. Define it clearly in your mind. If you don’t, guess what. Another year could go by, and you’ll still fall short of that objective!
  2. What steps do YOU need to take? What is your first one?
  3. Who else can assist you with this process? Are they already on your Team, or is it someone from outside? Forget about “saving your way to prosperity.” The right person on some of these tasks will pay for themselves 5-10X over. Ask anyone who has ever been saved from the brink of financial disaster. They never considered the cost, just the potential benefit.
  4. When do you want to achieve this result?
  5. What will the “drivers” of this challenge need?

If I can assist you with this process, please contact me at john@success-strategies.com or 209-988-8960. Best Wishes for a joyous Holiday Season and continued prosperity in the coming year!

What Would You Do?

Put yourself in this situation. It’s been a tough year, accompanied by lower sales & a small financial loss. I know – some of you are thinking – like normal… I know it can be painful. In fact, when I worked in the banking industry, we had a term for that. It was called a SNAFU, which stood for “Situation Normal, All Fouled Up…” I have a suggestion for you.

As you wrap up 2020, perhaps it’s time for a serious review of your accomplishments, e.g. what went well, what could have been better, and, perhaps most significantly, where can we improve?

First, what went right? What steps did you take & why do you feel it went so positively? When you know the answer to these questions, you have established the foundation for even greater success. How can you build upon it? Is it something that you will be able to repeat? If not, why not? Are you sure of this? If it worked in 2020, it could very well work going forward. Maybe you just need to make some adjustments & make it happen!

Next, what are the areas within which you fell short, and, once again, why? Was it due to the COVID pandemic, the economy or other items beyond your control? Was it due to poor or limited planning? Was it planned okay, but poorly executed? Please don’t take the answers to these questions lightly. Your future success might be dependent upon these very answers…

Finally, what are the areas that you feel you can do better on? More importantly, how? Here are some steps you can take to reach your objective(s):

  1. Determine what you want to pursue now. Define it clearly in your mind. If you don’t, guess what. Another year could go by, and you’ll still fall short of that objective!
  2. What steps do YOU need to take? What is your first one?
  3. Who else can assist you with this process? Are they already on your Team, or is it someone from outside? Forget about “saving your way to prosperity.” The right person on some of these tasks will pay for themselves 5-10X over. Ask anyone who has ever been saved from the brink of financial disaster. They never considered the cost, just the potential benefit.
  4. When do you want to achieve this result?
  5. What will the “drivers” of this challenge need?

If you can truthfully answer these five questions, you will undoubtedly position yourself for a stronger finish. If you take the time to complete this process, I’ll look forward to seeing you at the “Finish Line!” If I can assist you with this process, please contact me at john@success-strategies.com or 209-988-8960. Best Wishes for a joyous Holiday Season and continued prosperity in the coming year!

Would You Meet Me Upstream?

I recently completed an outstanding book entitled Upstream, which was written by Dan Heath. He is a Senior Fellow at Duke University’s CASE Center and has co-authored a number of excellent books with his brother Chip. You may even recognize some of them: Made to Stick, Switch, Decisive, and The Power of Moments. I’d highly recommend that you read this book in the near future.

See if you can relate to his opening story in Chapter 1.

“You and a friend are having a picnic by the side of a river. Suddenly you hear a shout from the direction of the water – a child is drowning. Without thinking, you both dive in, grab the child, and swim to shore. Before you can recover, you hear another child cry for help. You and your friend jump back in the river to rescue her as well. Then another struggling child drifts into sight… and another… and another. The two of you can barely keep up. Suddenly, you see your friend wading out of the water, seeming to leave you alone. ‘Where are you going?’ you demand. Your friend answers, ‘I’m going upstream to tackle the guy who’s throwing all these kids in the water.’”

A public health parable (adapted from the original, which is commonly attributed to Irving Zola)

This is a great example of “Upstream Thinking.” Have you ever noticed that we seem to spend a lot of time and money “fixing” problems, essentially those challenges that we are seeing “downstream” in our business? As you’ve heard me state many times, I firmly believe the following:

  1. If you measure some item in your business (e.g. Cash Flow), you can indeed understand it. It equips you to catch severe cost increases quickly before they get out of hand. Since these changes directly impact your break-even levels, they flow directly toward the “bottom line.” As I’ve said before, you can also use these cash flow measures to set your milk price floor within the Dairy Revenue Protection program.
  2. If you understand your cash flow, you can control it. You’ll know exactly what steps to take to positively impact it. Looking at your break-even levels, you can determine just exactly what changes you need to make in order to achieve improved profitability.
  3. Finally, if you can control it, you can improve your cash flow results. Isn’t that the objective of every business operation?

Well, whenever we identify a measurement that appears out of control, we should consider if we can go one step beyond this “downstream” measurement. Can we move more “upstream” and determine what is actually causing our problem? Here’s a simple example. Recently, one of my Clients was faced with higher than normal calf losses. These higher losses were the “downstream” measurement. At first, we thought that it may be due to changes at the calf ranch. However, as we moved “Upstream,” we determined that the machine used to pasteurize the colostrum being fed was only functioning at 60% efficiency. In other words, 2 out of every 5 days, it was not working correctly. This may shock you, but the employee that ran the faulty equipment noticed that it seemed to be failing. Unfortunately, he never bothered to tell anyone else. Hence, the challenges that arose “downstream.”

I’m sure you can think of other possible areas in your business that seem “off” in some respects, whether it’s a higher than normal “Cost/cwt” or another “Efficiency” measure. I would invite you to join me as I start to continually move my Clients “Upstream” in the next 12 months. Until then, what items in your operation are seemingly “out of kilter?”

Going back to the original question, “Would You Meet Me Upstream?” please give some consideration to this new type of thinking. It definitely will make a huge difference. If I can assist you with this process, please contact me at john@success-strategies.com or 209-988-8960. Best Wishes for a joyous Holiday Season and continued prosperity in the coming year!

When Will You Find Time?

This is a question I recently asked a new Client of mine. Please allow me explain my thought process. During our initial discussions and analysis, we had discovered several areas of his operation that needed some ‘fine tuning.” In other words, they were unintentionally off course in terms of their costs. Please take my word for it. They were way too high, in comparison to other producers.

To provide you with some background, his production was solid, and most of his expenses were admirable in comparison to industry guidelines. However, his Feed Expense and Cost of Supplies were both well above where they should have been. I had originally assumed that they were two separate challenges. However, as it turned out, they were both traced back to a common source.

For years, in an effort to save money, he had used the same Nutritionist from a local feed company. However, while saving the $1,000/month fee of a neutral third-party Nutritionist, he was spending thousands more on Feed Costs. His Supplies expense was also being impacted by the use of some “Pixie Dust” powder that was being added to the calves’ rations. Please don’t ask me why it was included in his Supplies cost. I assume it was placed there as a result of its’ “medicinal benefits…”

Now, understand that any Nutritionist can run into these same challenges and then need to make some changes. The difference here was that his current feed advisor wasn’t willing to make the necessary changes. With the guidance of another Nutritionist, this producer lowered his Feed Cost by $0.40/cwt and decreased his Supplies Cost by $0.10/cwt. Now, this change generated $10,500 of reduced costs per month. After paying the new Nutritionist $1,000 per month, his bottom-line return was still boosted by $114,000 per year.

Now, while the net impact of this change was dramatic, my point is not to pick on his former Nutritionist. This situation could happen with almost any advisor. The significance really revolves about the willingness of this producer to fully analyze these sizeable cost variances and then actually take the steps to improve his results. How much money had he left on the table because he was “too busy” to make these changes? Our industry is one with thin margins in most years. That is precisely why it’s so important to take action today! Do you know the best time to plant an Oak Tree? The best time was 20 years ago, but the second-best time is today.

Going back to the original question, “When Will You Find Time?” your very survival depends upon this type of thinking. Based upon my experiences of the past 22 years, it will make a huge difference. If I can assist you with this analysis process, please contact me at john@success-strategies.com or 209-988-8960.

Why Don’t You Just Go Away?

Hopefully, I caught your attention with this question. Please allow me to explain. Read on & see 3.a. below. Cal Newport in his fantastic book Deep Work defines “Deep Work” as:

 “…the ability to focus without distraction on a cognitively demanding task. It’s a skill that allows you to quickly master complicated information and produce better results in less time. Deep work will make you better at what you do and provide the sense of true fulfillment that comes from craftsmanship. In short, deep work is like a super power in our increasingly competitive twenty-first century economy.”

As you attempt to wrap up 2020 which has, at times, been very challenging, this focus on “Deep Work” becomes very crucial. Here are a couple of questions for you to consider as you strive to finish strong this year:

  1. What items went right this year? We probably all tend to dwell on what items went “sideways,” but think about and write down what went well. Was your production per cow better this year? Could it be, going forward? What’s your profitability look like, especially in light of the CFAP money from USDA? Are your 2020 costs in line? How about Labor costs? Did your 2019 investments pay off? What else would boost efficiencies?
  2. What needs to change? Are there better cost controls you need to put in place? For more on that specific topic, please see my October 14th NLT blog entitled “Why Bother?” Do you need to maximize Labor Efficiency, i.e. become more productive, especially in light of rising labor costs? How about your debt per cow, especially as we consider the strong possibility that, at some point in the future, we will see lower milk prices…? Do we need to decrease your debt levels?
  3. Most important, ask yourself, What’s Next? Treat this like “Deep Work,” because that is precisely what it is. My recommendation includes the following:
    1. Go Away! No, I’m not telling you to get lost. Just simply get away from your everyday distractions and do some “Deep Work” on your business, using the information above as a guideline.
    1. Focus on what, specifically, you want to see next year! Yes, I know it’s only late October or early November as you are reading this, but soon the Holidays will be upon us, and will you find time then? Not likely…
    1. While you are in solitude & focused: What specifically do you want to accomplish next year? Who is involved? What steps do you need to take? By when? Do your proposed changes require some financial analysis? If so, please contact me if I can assist you.
  4. Take the time to focus on this “Deep Work” now. Your future success depends upon it!

If I can assist you with any steps of this process, please contact me at john@success-strategies.com or 209-988-8960.

Why Bother?

Ouch! That is the question I was asked by a producer in December 2018. Please allow me to put his question into perspective. He had suffered through four consecutive years of low milk prices, continually growing expenses (despite our supposedly have only “minimal inflation”), and no profits. These factors were the basis of his question, “Why bother?”

My response was fairly straightforward. If you measure Cash Flow, you can understand it. If you can understand it, you can control it, and if you can control it, then you can improve it! His reply? “Yeah, right…”

However, in my consulting during the past 22 years, I have experienced the difference that measuring items such as your cash flow regularly can make:

  1. If you measure it, you can indeed understand it. It allows you to catch severe cost increases quickly before they get out of hand. Since these changes directly impact your break-even levels, they flow directly toward the “bottom line.” You can also use these cash flow measures to set your milk price floor within the Dairy Revenue Protection program.
  2. If you understand your cash flow, you can control it. You’ll know exactly what steps to take to positively impact it. Looking at your break-even levels, you can determine just exactly what changes you need to make in order to achieve improved profitability.
  3. Finally, if you can control it, you can improve your cash flow results. Isn’t that the objective of every business operation?

I can’t emphasize the significance of this formula enough. The example I used above was just for cash flow, but it can also be applied to any number of other operational measurements. Here are a few examples:

  1. Financing – This type of CF Analysis has impacted a large number of my Clients during these past 22 years. Frankly, it has impacted every one of them to be more profitable. If there are any exceptions, that producer wasn’t very serious about making any changes. They were hoping for a miracle, getting better without changing anything…
  2. Nutrition – I believe that most Nutritionists do a great job. Given the dairy producer’s Revenue & Expense levels can equip them to do an even better job of helping you become more profitable. The resulting break-even levels of your cash flow analysis will tell them exactly what you can spend on feed and still make money. The days of just maximizing milk production “at any cost” are over. This tool of cash flow analysis can assist you & your Nutritionist to be even more successful!
  3. Advisors – Whether we are talking about labor efficiency or any number of managerial items, cash flow & break-even analysis will provide you with the tools you need to make smarter decisions. For example, what is the impact of adding one more employee in the milk barn on your CF or break-even levels? With this information at your fingertips, you will know. Considering that milk prices haven’t really increased anywhere near the proportion that your expenses have during the past 40 years, improved efficiencies are absolutely crucial!

Going back to the original question, “Why bother?” your very survival depends upon it. Based upon my experiences of the past 22 years, it will make a huge difference. If I can assist you with this analysis process, please contact me at john@success-strategies.com or 209-988-8960.

Moving Beyond Survival!

Wow! This has definitely been a tumultuous year in the dairy industry, following the COVID-19 pandemic’s impact. However, if you are reading this, you’ve survived it, and that’s fabulous, but what’s next?

What new items, if you achieved them, would substantially push you forward? What would represent a major breakthrough for your Business, your Team or your Family?

You don’t need to be Superman to get this done. Even Muhammad Ali, one of the best boxing legends of all time, had limitations, but that didn’t hold him back. His limitations became obvious when he was flying somewhere in the world, and the flight attendant kindly asked him to put his seat belt on.

Ali, never one who was short of witty responses stated, “Superman don’t need no seat belt.” To which the flight attendant replied, “Yeah. Well, Superman don’t need no plane either…”

My point? As you approach these new areas & challenges, think it through and start small. Lay out your game plan, and then start with small steps. So, what if you stumble? It’s no different than learning to walk. If a baby falls while walking, we don’t put that child back in their crib and say, “That does it. You blew it. No more walking for you. We’re not trying that again!”

Of course not. We encourage them to try it again and again until the child gets it right and can walk on his or her own. And, then we celebrate that achievement, too. Yes!

Likewise, when you’re lifting weights, you wouldn’t start with 120 pounds. No, you’d start small and build you way up to that 120 pounds level. You wouldn’t train for a marathon by running 26 miles on day one. You’d work up to that by race day.

You need to clearly define your objective, your goal. Then, you outline the small steps that will help take you there. What do you want to pursue this year, as you move forward? Only you know the answer to that question. Take your time, take small steps, as needed, and move closer to your dreams. This was best summarized by author Kendra Adachi in her book The Lazy Genius: Embrace What Matters, Ditch What Doesn’t, and Get Stuff Done. She states:

“When you start big, you give up before you even begin, but the smaller the step, the more likely you’ll do it. The more you do it, the more you’ll keep doing it, making it a meaningful part of your daily rhythm which is the point. Embrace the power of small steps. They matter, they count, and they’re the best way to create habits around what actually matters to you.”

Best wishes with your success plan. If I can assist you in any way, please let me know at john@success-strategies.com or 209-988-8960.