The Search for Meaning

I wanted to take this opportunity to share with you a story that I had written in a previous blog almost three years ago. My reason for this is that, in spite of the difficulty we have faced with our economy these past ten years, I think we all still have a lot to be thankful for. Frankly, I couldn’t think of a better way to remind ourselves of that fact than to share this story of Victor Frankl once again. I hope you enjoy it.

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 guidance here for us, too.

First, he said, “Realize that the game of life has changed.” Isn’t that applicable today with our worldwide economic situation? As Frankl stated, the old game is over, a new game has begun. That’s true for your industry, as well. We’ve got to operate under a new set of assumptions because the old game is over. Be open to change – it’s already coming!

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 situation, find some humor each day. We all need it.

Fourth, every day, you must find something to be grateful for. Instead of focusing on what you’ve lost or what you don’t have, 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 others 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 changed. We’re in a new experience. The sooner we realize this, the sooner we’ll be able to rise above it. Also, don’t forget the other five steps to success:

Every day, find something:

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

Try this today. I think you’ll be glad you did!!!

 

Wanting What You Want!

I know what you are probably thinking, after reading the title of this blog. Wow, that sounds demanding, perhaps even childish. If so, I have to say that my initial impression was very similar. I can honestly say that because it was a concept that my own business coach Dan Sullivan introduced at a workshop that I attended. Gee, I thought, we spend most of our life being told to be more modest about our specific wants. You know: just cover your basic needs, don’t stand out too much, “Be average…” Instead of being “just one more performer among many,” this concept almost sounded self-centered. But wait!

I started thinking about this more and thought, “No, this isn’t self-centered at all! What else would you want out of life?” If you cannot answer that last question, you have two choices. Either stop reading this blog or give it some very serious consideration. That statement applies if you are a businessman, a sales representative, a service provider to the industry or a stay at home Mom. Being your best will undoubtedly have a more positive impact upon our society and economy (perhaps especially for the stay at home Mom and the great citizens she can create!). You have probably noticed. Generally speaking, do things get better when we all move toward the average? No. They get better when we make big improvements, create new ideas, and build new services! Henry Ford never did a “Focus Group” to see what his customers wanted. If he had, they would have told him they wanted a faster horse.

So, what is the central theme of this “Wanting What You Want” concept? I believe it is really about deciding what you want from your business and life, and then pursuing those objectives. Once you have the goals written down, develop a plan to get there. What steps will you need to take to reach those goals? What obstacles are you facing and what are the options available to overcome them? What is a reasonable deadline for reaching your objectives? Once you have given serious consideration to these items and actually written them down, you are almost there.

What are the primary challenges that we need to overcome in this process? Allow me to provide you with several:

  • 95% of us don’t actually know what we want. As a result, we often spend more time thinking about what we don’t want. So, instead of worrying about the fact that you do not want your banker asking you for more information, why not work on a plan to pay off your loans or, at least, get refinanced at a bank where you will be happier. Either way, you must decide what you want.
  • Society seems to want us to be average. Remember the first time you outscored everyone in your class on an exam? What did most people say to you? “Hey, lighten up. You’re making us look bad…” These forces of average must be overcome. Why not be superior? Outstanding? The first step will be to decide what you want to accomplish and set up the necessary steps to get there!
  • The greatest problem with many folks today is this. They suffer from TOM’S disease. That stands for “Terrified of Missing Something.” As a result, they will try just about anything, in an effort to get ahead. I assure you – you cannot afford this anymore. If you are currently living with the thought that you can, you are headed for big financial challenges…

Here’s the deal. We all know that business is getting tougher, so why not strive to develop a plan of action that will take you closer to your goals. Decide what you want, determine what actions you need to take to reach them, and remember that these can change as you proceed. Set some deadlines for your actions and their related goals, and then measure your results. Most of all, I think it’s perfectly acceptable to “want what you want.” Besides, you aren’t taking anything away from someone else when you seek your own goals. After all, they should have their own objectives. Think about it!

Living on “Someday I’ll…”

I still remember hearing a speech in the early 1990’s by Author Denis Waitley. He talked about how many of us spend a lot of time on “Someday I’ll.” You know the place, as we all do, only too well. As he describes it, “Someday I’ll” is a very comfortable location, where little changes from year to year. Your intentions are to make dramatic improvements in your business or your life, but there always seem to be distractions from the process.

Yes, you have wanted to boost your business’ productivity, but what if costs get too high? Your banker or accountant will be reminding you that you need to cut these costs, if they appear out of line with the rest of your industry. You know that you really should fine tune your labor efficiency somewhat but, “Hey,” you rationalize, “Joe has been with me for 20 years, even when we were barely getting by. I’ve got to keep him on my staff. Maybe ‘Someday I’ll’ be able to improve this cost area, at least by the time Joe retires…”

You know the type of employee I am referring to, don’t you? He is the guy that when you drive onto a business and see him standing around, you ask: “How long have you been working here at ABC?” to which he replies, “Ever since they threatened to fire me.” I think you get my point. It is time to start moving to higher levels.

You may recall the comedian Gilda Radner and her now famous quote: “When I was young, I always said I wanted to be someone. Now that I’m older, I just wish I’d been more specific.” While we find some humor in that quote, what was she saying? Set some new goals for your business. Prepare specific objectives for your operation and measure them regularly.

I often hear about measuring so many objectives in “real time,” and I agree that for some items that may be ideal. However, if an objective isn’t currently being checked weekly or monthly, I seriously doubt if it will get monitored minute by minute. Besides, sometimes we can become overwhelmed with too much information. In my own experience, I find establishing Goals is the first step to reaching them. After that, you should compare your actual results with what you have projected as your objective as often as you reasonably can.

You should make these SMART goals, too. This stands for specific, measurable, achievable, relevant and time-bound. In other words, they should be clearly defined. They should be something you can measure, yet be something you can, in fact, accomplish. Finally, the goals should represent something that matters to you and your business, as well as an item on which you can put a date by which you will accomplish it. I also suggest that we all need to be careful that we don’t set the horizon as our goal, because, have you noticed, it constantly keeps moving further away, and, eventually, you will get frustrated because you never can “reach it.”

What are some areas within which you can set goals and then monitor your results? How about Labor Productivity, e.g. how many units you produce per hour of labor input? What I find interesting is that if you get your entire Team involved in setting these goals, as well as monitoring them, your overall results can accelerate. Your Team will be excited about reaching them, primarily because you communicated these goals with them.

Sound ongoing communication will be the key in this process. Your employees realize that if you do better, they will benefit as well. I believe that most employees do not go to work, intending to do a bad job. They want to succeed, and, in reality, they want you to do better, too. Sharing goals with your Team will guide them to help you reach them more quickly. At least, this has been my experience. Make a point of setting some new goals for your business today, so you don’t get caught living on “Someday I’ll.”

To learn more about the points mentioned above, check out my website for financial tips at: www.success-strategies.com.

“There are no unreasonable goals, just unreasonable deadlines.”

Dan Sullivan, Founder of The Strategic Coach

 

Is it Time to Automate More of Your Business?

Have you started to automate your business yet? Before you say “No,” consider some positive areas that you’re probably not thinking about. Do you manage the finances of your business using a program like QuickBooks or are you still tracking everything with paper and pencil?

When you are considering an investment in new equipment or updated facilities, do you still study this potential purchase and its expected returns on a sheet of paper, writing only by hand? Perhaps you do this initially, but I expect that before long you are using Excel or at least a calculator. If you run a successful, growing dairy operation, are you still using paper based cow cards or have you adopted software like Dairy Comp 305?

If you answered “Yes” on any of these questions, you have already started to automate parts of your business. Whether you currently operate a dairy operation, a farming business or any other type of entity, it’s time to consider additional steps toward automation.

I regularly hear Clients saying that labor costs are rising or that potential employees are becoming less available. These two factors and the basic economics of labor efficiencies will eventually dictate more automation. I am fatigued by the ongoing discussions of the political ramifications of the U.S. lacking a positive immigration policy. Maybe this lack of supply goes beyond just that factor. Could it be that the labor supply & demand is changing in its balance, nine years after the “Great Recession?”

Further evidence of the possible need for more automation is “Skills Availability.” I was recently in a store when its registers went down. Fortunately, I was paying cash, so I could be processed okay, but… getting the correct change was another story, not exactly a testimonial to the math skills being taught in our schools today.

Here’s an idea. Start to look for items in every sector of your business that you can automate. It will pay in almost every area within which you can boost your efficiencies. If your business is the type of operation that can be “commoditized” or produced elsewhere, be cautioned that you could become a target for competition. This is just one more reason to get more efficient through automation.

Need another incentive? A recent article in Peter Diamondis’ newsletter, Abundance Insider, was entitled “Tax the Rich and the Robots? California’s Thinking About It.” A member of the Board of Supervisors for the City of San Francisco has launched the “Jobs of the Future Fund” to help California offset the societal effects of more automation. As their website describes it, “As workers are displaced, the companies continue to pay a portion of the lost tax into a fund that can then be used for education, retraining, and targeted investments in new industries.”

I thought that was why we already paid taxes, to educate and train future employees… This, in my mind, is just another reason to start to automate more. Perhaps, we can get “grandfathered” in before the Jobs of the Future Fund and its followers levy a tax on all new automation.

So, as I asked last month — if I was to ask you about your present and future labor efficiencies, how would you respond? How many units of production does your work-force produce daily? Is it more than five years ago? Are there opportunities for automation in your processes? Can you use robotics to your advantage? Even in my own business, I have started to offer more “automated services” for Clients and I believe it is the wave of the future.

I have two Clients who have expanded their dairies, and, as they added free stall barns, rather than building a new milking barn for huge money, they continued to use their older milk barn and simply add robotic set-ups in their new facilities. It’s just a different approach to expanding and applying automation without “breaking the bank.”

Please visit us at www.success-strategies.com for future updates on their automation. You may just find tools in our Financial Analysis section that you can use to evaluate your own efficiencies!

“Leave the Crown in the Garage”

In a moment, I will explain the title of this Next Level Thinking blog, but I wanted to start by sharing with you the thoughts of a business leader, whose work I recently read about on LinkedIn. Her name is Indra Nooyi, and she is the Chairman & CEO of PepsiCo. In the article, she described the seven critical lessons she has learned for running her company. I felt you might be interested in learning these, too. Here they are:

  • “Everyone needs a vision.” – When she became CEO of PepsiCo, she decided that she wanted to bring a new sense of meaning to the work she and her employees did every day. With this in mind, she added that, in order to continue recruiting and retaining world class talent, they needed to meet the changing expectations of a new generation of employees. Sound familiar? I know it’s getting tougher to hire top talent in many industries, and the key will be to provide your Team with a vision that not only illustrates the direction of your business, but also inspires your employees to make it a reality. Are your people inspired?
  • “Think hard about time.” – By introducing these new programs, she felt they were now focusing not just on the short term, but on the long term as well. For many in agriculture, for example, 2015-2016 have been financially devastating years. Yet, this is an excellent time to think long term. Are you looking ahead and doing all that you can to boost your efficiencies for the long haul?
  • “Ensure that culture change sticks.” – Whenever you initiate programs that change items in your business management, you can expect to face resistance. To minimize this factor, be sure that you are getting “buy-in” from your Team. You will undoubtedly need their support, so be certain that you send them a clear & positive message.
  • “Listen carefully.” – I’m sure you’ve heard the expression about each of us having one mouth and two ears, meaning that we should listen twice as much as we speak. Believe me. I’m guilty as anyone of violating this rule. However, the point I want to share here is that often there are people in your business who have great suggestions on how to do things differently, often in ways that are far better than how we currently complete them… My question for you is this. Are you truly listening to their suggestions?
  • “Be a student for life.” – Do any of us know it all? Of course not. In all my business travels, I grasp every opportunity I can to learn more about how other people do certain tasks in business. Trust me – flying over 100,000 miles a year will provide you with plenty of lessons about how you should (& sometimes how not to) do numerous tasks in business. Are you learning new things daily? I offer you a suggestion: Please take a moment and visit success-strategies.com where you will find new items, such as articles, blogs and videos, posted every week. And, the good news is that many of them are free!
  • “People are everything.” – I wish someone had told some of my prior “bosses” this. Your Team is one key to your success. Be sure to thank your people when they do things well. A “Congratulations” today will lead people to back you up when the going gets tough, and at some point, it gets difficult for all of us.
  • “Leave the crown in the garage.” – Now for the explanation on the blog title above. Indra, the day she was promoted to President of PepsiCo, went home and told her Mother, who was visiting, that she had a big announcement. Her Mom told her that was great, but first she needed to go to the store and buy some milk. She went to the store, and then told her Mom the great news. She said that was great, “but when you step into this house, you’re a wife and a mother first. Nobody can take that place. So, leave that crown in the garage.”

Her point was that we all have to determine our priorities, so she reminds us to never forget the multiple important roles that we play. I’m often reminded that all our employees have lives beyond their job responsibilities. I am sure you’ll agree that these roles are essential to their overall success, too.

I hope you’ve enjoyed these seven crucial lessons from Indra Nooyi, CEO of PepsiCo, and that you will find a solid application for some or all of them in your company. Remember, it’s your business!

Banking on a New Future

I wanted to share with you an excerpt of an article written by marketing expert Seth Godin, simply because I believe it has a powerful message, one that could serve as a sound directive to get our industry and, more specifically, our businesses back on track in so many ways. I hope you enjoy his thoughts, which fit any industry:

“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 is 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 (or business) and then suddenly see it fade.

For a while, politicians and organizations promised that things would get back to normal. 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.”

 

As I said in my first book A Roadmap for Success written in 2005, “Welcome to the Age of Possibilities.” Just as Seth Godin points out in his article above, the rules have changed. Is it fair? No. Is it pleasant? Not really, but it’s all we’ve got. It truly is where we currently reside in the management of our businesses, amidst uncertainty with a number of moving parts and variables that can often surprise us. I would suggest that we can no longer depend on politicians to help us out. Some things they complete are helpful, but we need to become more refined in our approach to business.

My suggestion is that we all need to focus on achieving greater efficiencies. In a recent discussion with one dairy industry Client of mine, he suggested that our primary focus should be on achieving greater Feed Efficiency and Labor Efficiency. Are you maximizing how much milk you are producing for each pound of Dry Matter that you are feeding your herd? How efficient is your labor force? If they have less to accomplish on their shift, do they simply move slower to “fill in the rest of their 8 or 10 hours?

Consider that there is a reason that more and more fast food restaurants are going to a fully automated ordering process. Even at mid-price restaurants like Olive Garden, they are offering mini-computer terminals at their tables, so you can order & then pay for your meal without using a waiter or waitress… It is a prime example of those businesses attempting to achieve improved labor efficiencies, partly in response to rising minimum wage laws and maybe, at least in part, due to a reduced availability of workers. Can you relate to that recently developed challenge?

So, if I was to ask you about your present and future labor efficiencies, how would you respond? How many units of production does your work-force produce daily? Is it more than five years ago? Are there opportunities for automation in your processes? Can you use robotics to your advantage? Even in my own business, I have started to offer more “automated services” for Clients and Prospects. I believe it is the wave of the future.

On July 31, 2017, our completely redesigned website at Success Strategies, Inc. went live, so take a look at our new monthly Success Videos and Tele-Seminars, which will be listed under our Financial Techniques at www.success-strategies.com. Take a moment and view a free sample video within the Success Videos section today. This is all new material, and, in conjunction with our Financial Analysis Tools included there, it might just be what you need to evaluate your own efficiencies!

Are You Really Prepared?

Following the dismal prices of the last three years, especially in the dairy industry, I am certain that if I asked anyone if they were prepared to receive higher prices, they would respond by saying, “Of course, I am. Are you kidding me?” Yet, I would ask, once again, are you truly prepared? Are you 100% ready?

Here is how you will know. As prices in your industry rise, are you totally prepared to hit the ground running? I know it’s been tough the last three years in the dairy industry (and this can apply to any industry), but if you are really prepared, you should have a plan to complete the following tasks:

  • To move forward & return to profitability. A sound financial projection will tell you how soon you can expect to reach this level.
  • To catch up on any and all Accounts Payable that are not current.
  • To pay down your Lines of Credit as much as possible, as soon as you can.
  • To make the changes & improvements necessary to boost your Profitability.

If you don’t have this plan in place before your revenue levels increase, you could fall into the trap I’ve seen so many times before:

  • You slog along with your Accounts Payable, reducing them somewhat, but with a fear that if you pay them all the way down to current levels, you might need that money later. While that need may be partially true, if you get these paid down, I’m sure your Vendors will be more willing to work with you in the future. Likely, your banker will be, too.
  • You resist reducing your Lines of Credit, fearing, once again, that you may run short of cash & justifying this inaction by saying, “Hey, it has been rough.” No one will disagree that it has been difficult, but lenders can only work with you within their standard lending guidelines, so do all you can to reduce your lines of credit when you are able to do so.
  • You just get your plans in place to initiate the improvements you know you have needed to complete, and then, “BAMM,” you are hit with low prices again.

There is a better way. Here is your Call to Action:

  • Develop a Plan, as outlined above.
  • Set your priorities. If you are behind on Accounts Payable or other items, you may not be able to correct them all at once. However, do not let what you cannot do (e.g. paying them all back at once), keep you from doing what you can do (e.g. an orderly repayment of Accounts Payable).
  • Determine what you will need going forward to make your business more successful. Then, you won’t get caught flat-footed, wishing you had taken action sooner. Instead, maybe you’ll be talking to your banker about your next great move forward!

If you would like some assistance with this process, I offer you the following. On July 31, 2017, our completely redesigned website at Success Strategies, Inc. went live. You may want to take a look at a new video series we call The Strategic Gameplan Series, which will be listed under our Financial Techniques at www.success-strategies.com. Check it out. It may be just what you need for an entirely new game plan!

 

What’s the Difference?

I’d like you to think about two words and compare what they can mean to you as you move forward in your business and life.  The two words are “Reactive” and “Creative.”  While they are both spelled with the same letters, they have quite different meanings, don’t they?

When I am working with my clients to develop their business strategies, one of the greatest gifts that I believe I can give them is to teach them to be more creative and less reactive.  This is especially true when we are seeking financing from their bankers, and I will get into that more in a moment.

I believe it is crucial that we always remember that each of these Clients, or any other person for that matter, is going through a transition.  This is their “journey,” if you will.  Whether they have been on the brink of a financial disaster and want to restore their solvency and then go on to higher levels of prosperity, or they simply desire to get better at what they do, they all want greater levels of clarity.

To achieve this, the key is to know where you currently are in terms of your finances and proximity to your long term objective.  Understand what you want to accomplish, and just as significantly, understand your “Why.” Why do you want to expand your business?  Is it to earn more, to allow for your son or daughter to join you in the operation, or is it to position your business for a better sales price when you decide to retire?

Believe me.  If you know where you currently are, what you want to achieve, and have a firm grasp of “Why” you want to accomplish this goal, the steps you’ll need to take will become much more evident.  You will start to see what you are lacking and then be well positioned to obtain those necessary items.

This has always been the case whenever you need new financing to complete your goal.  If you can explain to your lender what your goal is, why you want to pursue it, and the steps necessary to get there, most bankers are quite good about providing the funding you will need, assuming it makes financial sense.

I believe that if you really want to accomplish anything in life, this is the process you need to follow.  Know your starting point, where you want to end up (the Goal) and then evaluate what you are lacking in order to refine the steps you should follow to get it done!

On August 1, 2017, our totally redesigned website at Success Strategies, Inc. will be completed, so you may want to take a look at a new video series we call The Strategic Gameplan Series, which will be listed under our Financial Techniques at www.success-strategies.com.  Check it out, because it may provide you with the foundation you need for an entirely new game plan.  I think you will be glad you did!

Building Your Business Confidence

Have you ever had a time in your life when you didn’t necessarily feel like your confidence was as high as you’d like it to be? I have. In fact, I think we all have some times like this, especially when things around us are not going as smoothly as we had planned for them to go…

It’s hard to feel very confident when industry events put you in a position of losing money regularly. Unfortunately, negative financial returns can cause us to start asking ourselves some tough questions: “What am I doing wrong? How long can I hold on, given my losses and my current equity levels?”

I am sure you’ve heard the age old advice: “Be careful what you ask for. You just might get it.” With that in mind, let’s shift our focus to a much more proactive approach, because these negative questions can, indeed, take you to some very disappointing and depressing results. I have had the honor of being directly involved in the financial turn-around of numerous businesses during the past 19 years. However, in each of these circumstances, I felt it would be beneficial, rather than focus on how long this Client could “hang on,” to shift our attention to a far more proactive direction.

While the “dangers” of their financial situation were always in the back of my mind, I believed their business turn-around would require us to correct their course and get back on track. Oh, wait a minute. Getting back on course would require us to know what our destination actually was. It would require us asking: “What’s next? What do we want to achieve? What do we need to do in order to get there?”

My advice has always been: Slow down, Think & Plan. Remember, if this was easy, everyone would do it. However, it isn’t always easy, and so, people don’t do it. We all like shortcuts, but don’t fall into that trap on this task. I want you to be different. I want you to do better. I want you to succeed!

Rather than focusing on what can go wrong or how long you can hang on, focus on something totally different – what you want for your outcome! Following this strategy has served me well in these turn-around situations. I’ve seen businesses that lost $2.5 million one year turn a profit of $39,000 the next year. Was that phenomenal, in and of itself? Probably not, but even their banker had to admit that there was some hope going forward, which allowed them to work with us to get the business refinanced. They did go on to turn larger profits in future years, and this was a much better outcome for all those concerned, including the lender, as we moved forward.

What to do?

  1.  Set your Goal.
  2.  Know “Why” you want to reach this objective.
  3.  Lay out the necessary steps to achieve this.
  4.  Put dates for each of these action steps.
  5.  Take Action and continually move forward.

If you follow this process, I assure you, it will build your confidence and prepare you to discuss these steps with your lender, simply because it will equip you with answers to the questions that she will be asking. What do you want to achieve, why do you want to do this, and what are the actions necessary to accomplish this? With the answers to these questions in front of her, we can both be more confident she will be better prepared to help you.

If you would like some assistance with this process, I offer you the following. On August 1, 2017, our redesigned website at Success Strategies, Inc. will be completed, so take a look at a new video series we call The Strategic Gameplan Series, which will be listed under our Financial Techniques at www.success-strategies.com. Check it out. It may provide you with the foundation you need for an entirely new game plan.

 

The More it Changes, the More It Stays the Same…

Recently at the Western Dairy Management Conference in Reno, Nevada, we heard an excellent presentation by Mike Lormore, Director, Cattle & Equine Technical Services at Zoetis, regarding the various profitability variables all producers contend with in their daily operations. The presentation, entitled “What Drives Financial Success on a Dairy?” was based upon extensive research with Ag Star, a leading dairy lender in the upper Midwest.   I believe this presentation was exactly on target with what I have seen in my consulting work during the past 19 years. While there are many profitability variables to contend with, and this research does not suggest that ignoring one of the lower correlated variables would ever be a good idea, the top three are all ones that I have had the opportunity to deal with in each and every financial turn-around situation. They are the ECM level of the dairy operation, its 21-Day Pregnancy Rate and its heifer survival rate.   Let’s explore why these are the top factors:

  • Energy Corrected Milk per cow per day – This is fairly basic. Most dairies get paid for the amount of milk they ship to their creamery, whether it is higher in components or simply greater in milk flow quantity. As long as they are keeping feed costs and other expenses in line, the higher ECM herds will tend to be more profitable. Now, before you write me to tell me about the exception you found to this rule, please remember that we can always find exceptions to every rule, but this rule holds for most herds. Somatic Cell Count is also a factor here – think milk bonuses! Creameries only give these financial incentives for lower SCC.
  • 21-Day Pregnancy Rate (or risk) – I have seen this in so many difficult financial situations. Low Pregnancy Rates equal financial challenges ahead. Simply stated, a higher pregnancy rate leads to more pregnant cows, which leads to more fresh cows, which then leads to more milk, which certainly helps to pay more bills, assuming all other factors are consistent within a given dairy business. More ECM, as outlined in #1 above, is more profitable. For most dairies, this higher ECM only comes via more fresh cows, which is a direct result of getting cows pregnant sooner. I have Clients who regularly push a 30% PR, and their higher PR leads to more fresh cows and higher levels of ECM.
  • Heifer Survival Rate – It is incredible to me how many operations that have financial challenges ignore their heifer survival rates. Do so at your own risk. Keeping more heifers alive is like putting money in the bank. Often, I hear that selling heifers is the last step before the death of a dairy… I say, not so fast. Selling heifers, if it is part of your regular financial plan (and not a “fire sale…”), can generate some nice cash flow, which, if you sell them as fresh two year olds allows you to be taxed only at Capital Gains rates (and you can keep their heifer calves, too, adding more to the value of your herd!).

These are just the top points from Mike’s excellent presentation. However, if focus on your level of ECM, your 21-day Pregnancy Rate and your Heifer Survival Rate, your profits will not only increase, but many of your related variables will also improve.   Remember, as I previously stated in my February 28, 2017 blog, and as presented by Dan Sullivan, Founder of The Strategic Coach:   “If you measure something, you can understand it. If you understand something, you can control it. If you can control something, you can improve it.”   I hope you find these discussion points helpful. If I can assist you with your business in any way, please let me know. Be sure to watch for upcoming announcements of my new program entitled Six Hours to your Best Year Ever! available at www.success-strategies.com soon.