Good Times Require Discipline, Too!

In the book Team Secrets of the Navy Seals written by an anonymous author who actually continues to serve as one of our U.S. Navy Seals and hence wishes not to reveal his identity, one of the most significant lessons expressed in the book revolves around our need for constant evaluation of “… whether you can afford to work with a ‘leadership challenge’ or whether it makes more sense to find a replacement” for that employee.  The author goes on to say that “If the weak Team member is truly a good person, try to find another job for them.  Do not keep them on for fear of hurting their feelings.  It will hurt both them and your Team.”

We are currently facing a similar situation in the dairy industry today.  As I write this column, we are enjoying some higher milk prices.  However, by the time you read this article, we could very well be seeing lower prices again.  While I hope that is not the case, it is always a possibility.  I recently had a client who felt the need to change his milking force’s days around.  During that process, one employee blatantly challenged my client that he wasn’t about to make the necessary changes, regardless of the outcome, and was prepared to leave if the changes went through.  As the saying goes, “Sometimes the only way to change a person is to change a person.”  That is exactly what occurred in this case, and as a result of this employee’s departure, I believe that both my client and his Team are better off.

I believe we are facing the same dilemma throughout many phases of our dairy industry today.  I realize that some decisions are really tough.  However, as my colleague and futurist Jim Taylor stated, “Wait for the future and you have no future!”  You’ve got to get going on this evaluation of all aspects of your business, and it’s not all about cost cutting either.  While we certainly do not want to overlook opportunities to cut costs in areas that will not have a negative impact upon our operations, there are other areas that deserve consideration:

1.)    Do you have the correct debt structure in place for your business?  Talk to your banker (or other lenders) to determine if your debt structure has been optimized.

2.)    Have you been using Milk Price Options?  They can provide a method for minimizing the damage during a downturn.  While you may find them somewhat confusing (as most of us do), they can be helpful.  Spend some time with other producers who have used them or with industry specialists who understand them.

3.)    Review the “efficiencies” of your current operation.  Are there items available that might boost production per cow with little additional cost?  Is there a way to milk more cows per hour or per man?  Today is always the best time to look at these items.

4.)    I hope I’m not too late on this one, but be sure to catch up on your Accounts Payables.  Use this time of higher milk prices to regain as much ground as possible in getting your bills caught up.  It takes some real focus, but you’ll be glad you did!

5.)    Finally, (and you knew you could not read an article of mine without this being mentioned) be sure to develop a plan for the future of your business.  Our industry, as is the case with most businesses, has become less forgiving of those who ignore the items listed above.  With that in mind, plan for the future that you want for your business.

As I have said many times before, you’ll be glad that you did!  Former Green Bay Packers Coach Vince Lombardi stated, “Winning is not a sometime thing – it’s an all-the-time thing.”  Make it part of your business planning today!

When Should I be Worried about my Business?

I often hear Clients say that they are worried. It sometimes makes sense to express concern about items in your business and personal life. However, does it pay to literally worry? I don’t believe so. Mark Twain described worry as the interest paid on a debt you never owed…

While we should all be studying various facets of our business, I see little benefit in worrying. Will it make things better? I doubt it. Will it add any time to your life? I don’t think so. It will be more likely to accomplish just the opposite.

Will worrying add any clarity to your business thinking and acumen? I doubt it…

Napoleon Hill suggested that we should, “Kill the habit of worry, in all its forms, by reaching a general, blanket decision that nothing is worth the price of worry. With this decision will come poise, peace of mind, and calmness of thought which will bring happiness.”

A lifelong friend of mine stated that he considers all of the possible outcomes of any decision, and then, if he feels he can live with what he believes is the worst possible outcome, he moves forward without worrying further about it. Sounds like good advice!

My advice: Quit worrying, focus clearly on the decision at hand and the options available, and based upon what you and your advisors know, make your best choice. None of us gets every decision right, but I believe you will be well on your way to achieving higher levels of success as a result!

A Unique Approach to Boost Your Interest Earnings

Ever wonder how to boost your interest earnings, especially with rates that banks pay you being so low? Granted, you may earn about 0.10% on any balances left in your account. Why not earn it another way by saving some money on interest expenses? There is still a way to do this. 

 When your milk check comes twice per month, why not pay down your revolving lines of credit for a couple days, while you are deciding specifically what invoices you will be paying? While these earnings are not huge, they are far greater than anyone can earn on any funds sitting in a checking or savings account today. If your lines are at a rate of 4.25%, you can save over 40 times what the bank will pay you on any unused balances. Sounds like a good trade to me…

 When your milk check arrives, assuming you have a revolving line of credit, you simply pay down the line, especially if it comes on a Friday or before a three day weekend, and then save the loan interest until you send out checks to your vendors. Just be certain that you have the funds back in your checking account before your checks written start to clear the bank. Otherwise, the overdraft fees will wipe out any savings you have had on your line interest.

 You may also want to check with your bank to see if they have an automatic “Sweep Account.” A sweep account will do the same thing for you every banking day, ensuring that you minimize your interest expenses, while ensuring that your checks are always covered. This sweep process is done completely via a computer program, designed to save you money, just like the manual process I described above. 

That, my friends, is good for your bottom line. It is a great example of Next Level Thinking!

Getting Yourself on the Right Team!

“I don’t ask the players if they want to win. I ask them if they can live with losing, because if they can, that is exactly what they’ll get since it’s so much easier to have.”

I love this quote from former Notre Dame head football coach Lou Holtz because it succinctly says so very much. Which team do you want to be on with your dairy operation?

Here is an excerpt from an article I recently wrote for the October 2013 issue of the Western Dairy Business:

Please allow me provide you with some points of comparison for two teams, because there are consequences involved with both:

1.)   ” The managers on the A Team have a definite plan that they follow very closely. Of course, they adjust their path occasionally, but for the most part they stick to their plan. Why? They do so simply because they spent a lot of valuable time with their key advisers developing this plan that will take them closer to their desired objectives. Does the B Team have a plan? Certainly. They have even considered getting it out of the file drawer to review it once in a while. They just haven’t found the time to check it again, so sometimes they get off course…

2.)    The A Team knows precisely where they are on a day to day basis in terms of herd health, milk production and reproduction. The B Team has considered collecting this information and maybe even putting together a daily summary report for their entire team, but they barely have enough time to keep the bills paid and meet with their banker regularly. One Nutritionist had suggested this, but they decided he just represented another cost that they could not afford…

3.)    Members of the A Team seem to have a solid handle on their costs. They get surprised sometimes, but it’s not because they are asleep at the wheel. They adjust course and may substitute one product for another. However, this is never done blindly. They simply discuss it with the appropriate advisers. The B Team, on the other hand, keeps a close watch on their more successful neighbors. If they are trying something, it might be worthy of consideration, no?

4.)    The A Team makes a lot of money farming, especially with the high feed costs we have seen the past several years. They invest farming funds carefully, and, as a result, achieve solid yields, which leads to stronger profitability. The B Team? Well, it’s not really their fault, and they would have hit better yields, but they couldn’t get their Crop Adviser or the fertilizer company to come out because their account balance was large and past due 120 days. However, as I mentioned earlier, they don’t feel it is their fault…

5.)    Finally, members of the A Team are very teachable. They have been in business for a number of years, but they realize that the industry has changed. They realize that they must change, too. The B Team? Their leader exclaimed to one young adviser that, “If he followed every recommendation he had received over the prior 20 years and they had all worked as planned, his cows would be producing 120 pounds day.” Sounds like it may have been worthy of consideration, in comparison to the 62 pounds per cow per day he was currently hitting…

What’s the message for us as managers? First, we need a solid plan. Second, we need to follow it and adjust course as needed, because none of us has a crystal ball into the future. We also need to realize that all of our decisions (or lack of them) have consequences. They can also impact our credibility with vendors, bankers, our business partners, and other key players, all of which will have consequences.

Which Team do you want your operation to represent?” I’m going with the A Team! To learn more about the points mentioned above, get a copy of my latest book, The Five Factors Guaranteed to Impact Your Future, at: https://www.createspace.com/4336264

Who Has Time to Develop a Plan?

We live in such a busy world, don’t we? While we are all trying to be more successful, every one of us still needs to take some time to “plan our work, before we work our plan.” 

I recently had a Client who said, “Are you kidding me? I barely have time to get everything done as it is. Now you think I should allocate some time to planning?” As soon as he completed his statement, I think it actually occurred to him what he had just said. He had realized that he needed a better plan to get things completed correctly and on time. I know you have heard the old adage: If you don’t have time to do it right, where will you find the time to do it over?

Doesn’t that same rule apply here? I am sometimes guilty of the same thing, that is, not planning the detailed steps of my work and then being disappointed when everything does not turn out quite like I had hoped. What can we do? I am glad you asked. 

There is never a bad time to plan tasks we wish to accomplish, but this is particularly true as we approach a new year. It has been said that the best time to plant an Oak tree is 20 years ago. However, the second best time is today! As you approach the end of this year and start planning for the upcoming one: 

–         Set some positive Goals for you and your Team.

–         Decide what Achievements you really want to accomplish.

–         Lay out the Steps necessary to reach these.

–         Determine what your intended Time Table will be for each step.

–         Decide Who will be involved. Do you need additional people or is it something you can hire an outside contractor for?

–         Establish some solid Measurements to track your level of progress.

–         Outline what Specific Activities you will use to monitor this progress and review them with your Team.

–         Finally, Celebrate Your Success and share the achievements with the rest of your Team!

Follow these eight steps, and I believe you will be well on your way to achieving higher levels of success!

Planning for Success

In my last blog, I discussed how we each need to have a plan for the success of our business. Guess what? Now is the time! It is late in the year, and I personally find that this is the most optimal time of year to complete this process.

There are several reasons for this. First, you have a fairly good feel for what the current year’s results will be. This will provide you with insight into the areas you want to improve. It will also guide you to set new objectives for next year.

Second, it is nearing year end, and your banker will be pleased to know that you are planning for next year. Why not share a copy of your plan with him or her? This is especially important if there may be new financing required…

Finally, any expense involved will be deductible for taxes this year. With that in mind, let me provide you with several ground rules:

1.)    Establish what planning tasks you want to accomplish while you are doing this process. What is most important to you for next year?

2.)    Know “Why” you want to accomplish a certain objective next year. If you know your why, the how will become much more evident!

3.)    Get offsite to do this planning.

4.)    Yes, I did say offsite! This will minimize your distractions and interruptions. Besides, you don’t work for “Corporate America,” so you don’t need permission to do this. In fact, I believe your expenses should be deductible. Ask your Accountant.

5.)    Stay focused (another advantage to being offsite). Stay on task and push yourself to set higher and more challenging goals.

6.)    Plan an agenda before you go, and follow it closely.

7.)    I suggest that any business owner do this at least once per year. Having a mid-year checkup is not a bad idea either.

8.)    Best wishes for a successful planning session.

Follow these steps, and I believe you will be well on your way to achieving higher levels of success, your reward for Next Level Thinking!

What Was He Thinking?

Recently, I was talking to a colleague of mine who does nutrition work for many of my Clients. He pointed out that my Clients were operating at such low levels of debt, it must be easier for them.

After thanking him for his compliment about how I had helped them achieve these lower debt levels (and, believe me, this is not true for all of them), I started to think about some of the objectives we had set and accomplished with these Clients during the past ten years. He was correct in his statement, but I believe that everything we achieved could be done at any dairy or, for that matter, any business at all.

Before you tell me that this cannot be done on your operation, allow me to explain that I cannot remember any case where this was completed with ease. Every one of these Clients had challenges to overcome and required a solid game plan! We became focused after the dramatic downturn in 2006. I recall getting to the end of 2006 and saying to my wife, “Man, I hope we never have another year like this one. I am exhausted!”

Little did I know what was waiting around the corner in 2009 with its rock bottom milk prices or in 2008, 2012 and 2013 with record high feed prices… So, clearly we lost some ground (or made progress at a slower rate) in those years, but we still pushed forward.

 I believe the keys include:

1.)    Develop a plan and have clearly established Goals to shoot for in terms of profitability and debt reduction.

2.)    Make sure your debt structure allows you maximize your cash flows and still reduces your overall debt levels each year.

3.)    Don’t borrow for anything unless you need to, but when you do, shop for the best rates and repayment plan.

4.)    Monitor your results every month. This is the only way you can stay on track and ensure that you reach your objectives.

5.)    Push yourself and increase your goal levels every year, whether it is on profitability, debt reduction or both.

6.)    Never give up. As Winston Churchill stated, “Never, never, never give up.” That, my friends, is a definite!

7.)    When you reach your Goals, as I am confident you will, celebrate with your Team. Remember, they helped you get there.

8.)    Finally, if you get off track, get some qualified assistance. You gain absolutely nothing by claiming that you never needed anyone’s help to get where you are but then “hit the wall,” as so many businesses have the last five years. If you need some guidance, get some. Why wait?

This will allow you to re-focus on Steps 1-7, after which I believe you will be well on your way to achieving higher levels of success, your reward for Next Level Thinking!

Entering a New Game!

Welcome to a new year, a fresh season and a clean slate – all with the makings of a positive start. With this new beginning, we all get a clean score card without any pluses or minuses. The scoreboard simply has all zeros. Unfortunately, this state won’t last long.

Take a quick look at your results for last year, and figure out what went well and what areas need to be improved. Are you prepared? I realize this can be a difficult question, but what have you done to prepare for this year? Have you set new Goals and developed a Plan for reaching them? This process can be challenging, but it definitely is needed in every business (including mine). Here is a list of questions designed to assist you with this preparation process:

  • Do you know what you want to accomplish this year? Share these objectives with your Team.
  • Have you set specific goals for items that have a direct impact on your efficiency? Written goals will keep you consistently focused on your target.
  • Do you have an established system in place for measuring your results on a regular basis versus just waiting until year end to see how it all works out?
  • Take the time to establish profitability goals on a monthly basis. Do you measure your margins monthly?
  • The best thing you can do is to measure your outcomes versus your plan regularly. There is no better way to know whether or not you are on track!
  • Do you have established Team Accountability measurements in place? These should be set with your employees and your outside professionals. People do not rise to low expectations, but, in all cases, it always helps to know what your expectations (Goals) really are.
  • Do you have a system in place to measure these results throughout the years? With my Clients, I use a scheduled set of Management Team Meetings with them, their key employees and other professionals to track our results throughout the year.
  • Finally, as the saying goes, “Plan your work, and work your plan.” Having a plan in place will dramatically increase the odds that you are more successful this year. Using this tool as a guideline for what items you need to focus on improving will serve you well as you proceed forward.

Following a solid plan based upon the points listed above and your business’ unique aspects, and then measuring your monthly results against an established plan, will get you closer to your objectives. Best wishes for a successful year!

Busy Earning a Living…!

Do you ever go through a period of time when, no matter how much work you finish, you just cannot seem to catch up, leave alone get ahead? I know I have had this feeling at times. Maybe it’s just part of being caught up in the never ending race called Corporate America, yet even today I find myself getting caught up in this “race,” and I don’t actually work in that arena anymore…

I recently talked with a friend who just could not seem to get everything done. In fact, I talked to him several times over a period of three days. Each time that I did, he sounded like he was further behind. No, it wasn’t because he had talked to me those times. I believe it was because he was suffering from what business author Mark McCormack described as “working too hard earning a living, to really make any money.”

He was so focused on trying to get everything done, that he had never stopped long enough to determine what items on his lengthy list were most important. In fact, did I say he had a list? Perhaps in his mind he did, but he killed his own efficiency by failing to take several key steps.

First, he never stopped long enough to literally make a list of the items he needed to complete. Additionally, he did not take a moment to prioritize them. I believe this is what Stephen Covey referred to as “beginning with the end in mind.” He needed to decide what he wanted to accomplish and then prioritize the tasks that would get him closer to those specific goals.

What? Who has time for this, you ask? I would suggest that the process of making a list could end up saving you a significant amount of time. Making a list and determining what is most important, what should be second, and so on would likely save you a considerable amount of time. Who knows? You might even find some synchronization of steps where you and your colleagues can gain some efficiency by working together…

 My advice is that when you get this “busy,” you need a road map planned out more than ever. Most people don’t plan to fail. They simply fail to plan and then lose their focus. I suggest you give it a try, because as famous investor Warren Buffet says of such times, “It’s only when the tide goes out that you find out who’s not wearing swimming trunks.”

“Building a World Class Team!”

A few years ago, I attended a Leadership Conference at Duke University and was fortunate to hear a keynote address delivered by Duke’s Head Basketball Coach Mike Krzyzewski entitled “Building a World Class Team.” His message centered around his experiences 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. Perhaps, you will find these helpful as you develop your internal management team and build relationships with other professionals you work with. The attributes he described include:

1.)    No Arrogance – Now remember, he was dealing with a team consisting of professional NBA players, some of whom are earning up to $10 Million per year. Are there some egos involved here? Absolutely, yet, they have learned to put the team first and themselves second. This is no small task, but it can be accomplished in your operation, too, by helping your Management Team to share your vision for success and put their individual egos behind your team’s progress.

2.)    Collective Responsibility – Simply stated, we win together and lose together. Is the loss of a game the responsibility of the player who missed the last second shot from 20 feet out? I don’t think so. Collectively, if we had played better throughout the entire game, maybe we would not have been under such pressure at the end. The same holds true for your business. When your milk flow is down, don’t blame the nutritionist. Maybe we should have watched the breeding program closer to ensure better heat detection & more pregnancies, resulting in more fresh cows.

3.)    Work Together to Get Better – Remember, in a great team setting, I don’t lose if you win at whatever role you play. We both win! Life is not a “zero-sum” game. Rather, it is the summation of a series of win-win situations wherein we grow. We need to work together to get better collectively.

4.)    Confront Under-Performers – There are so many examples in our society where we attempt to “equalize” everyone’s results, so we “feel better” about ourselves. I need not single out any sector or institution, because you already know what I’m talking about. As I said above, work together to get better & cultivate excellence.

5.)    Teach Your Legacy to New Talent – We can all learn from others. Everyone’s experiences are valuable, so why not make it a point to teach the younger “players” in your organization? Why force others on your team to learn by making the same mistakes you’ve already experienced? Pass your experience on!

6.)    Create a Vision – Set Goals for your Team and tell them what’s in it for them. For Coach K, it was to win a Gold Medal for the United States. For you it might be to increase production per cow to a certain level or to reduce the average days open in your herd and shorten your calving interval. You decide. You might be surprised how interested your employees are in helping you reach your goals. A lot of people enjoy working for someone else. Thank goodness, because we need good employees. They simply want to be aware of what your vision is for the business, because they cannot help you achieve a goal you do not have…

7.)    Be Worthy to Win – Work hard and play by the rules, but play to win! When you do reach your objectives, be sure to share the success with your team. You probably could not have done it without them.

8.)    Use the Power of Words – When Coach K autographed his book for me, he stated, “Always believe in the ‘Power’ of ‘Words.’” This can be a word of encouragement or, as he shared in his book Beyond Basketball, it might be as simple as stating “I believe in you” when you are interacting with a teammate. Words can also be a powerful visualization tool for people. Be sure to use them wisely.

9.)    Have Passion! – Be excited about what you do. Whether you’re an owner, milker, herdsman or Cooperative Board Member, play your role to the fullest extent possible. My dictionary defines Passion as “Great enthusiasm.” Coach K described it as “… extreme emotion. When you are passionate, you always have your destination in sight and are not distracted by obstacles.” However you define passion, be sure to demonstrate it on a daily basis as part of your success routine. I am sure you will have no regrets!