I was recently talking to a new Client about the areas of their business, particularly some of their Costs/cwt, that needed to be improved as we move forward. In response, he and his bookkeeper stated, “John, as a result of your help with these measurements, we know what we need to do. We’re just not sure ‘How’ to do it.”
I found that to be very interesting. Yet, I also felt it was important that we address their concern. Otherwise, it would become a consistent source of frustration for them. As I have stated in prior blogs, and this is true for any item, if you measure it, you can understand it. If you understand it, you can control it. If you can control it, you can improve it! This is a direct tribute to my own Business Coach Dan Sullivan of The Strategic Coach organization.
Now, let’s do a reality check. Does the quote say you can fix it by tomorrow? No. It simply says that if you measure it, understand it, & control it, you can improve it. For example, I recently met with a long time Client and determined that in the past two years, we have reduced their total operating costs by $2.45/cwt! While this result is outstanding, it seemed to take forever to attain. The primary reason was that they had not taken the process 100% seriously until the past two to three years. As a result, their progress had been slowed.
As motivational speaker Les Brown is quick to point out, “Wherever you are in life, you made an appointment to be there.” Similarly, I often hear people say, “Oh, I don’t know if I can do this. I don’t milk 3,000 cows, or I don’t have the most modern facility.” Author Brendon Burchard, in a recent Facebook presentation, talked about how to overcome the challenging question that many of us face of “Who am I to deserve this?” In this presentation, he provides us with four valid points that we can utilize:
The very question of “Who am I to deserve this?” leads us to have self-doubt, but that’s OK. Instead of ignoring it, start asking yourself, “What action do I need to take? What do I need to learn? Who do I need to talk with, in order to make this positive improvement?”
This “Who am I…?” question can also be a cue to develop more self-competency. The key is to begin working on a “learning plan.” None of us are born with complete innate, inborn knowledge of everything, so obtain a mentor to assist you with this. If I can help you, please let me know.
Brendon points out that the “Who am I…?” question can also serve as a trigger for congruence. Often, if we really think about it, we need to consider whether our actions are being congruent with our desired plans. In other words, if we want to decrease our Cost of Supplies/cwt, are we really being congruent in our action? Are we exploring what might be pushing this cost upward? Are we having the difficult conversations with our vendors that may be necessary?
Finally, Brendon suggests that we never compare ourselves to others. While I believe there is some value to, not only measuring your Costs/cwt & comparing them to industry averages, we need to be careful of being tied to these measures as an anchor. Rather, I feel they are starting points to where we can think about making improvements in your operation. Obviously, if you are milking 100 cows in a tie-stall barn, your Labor Cost/cwt will likely be higher than someone who is milking 3,500 cows in a new Rotary Milk Barn. Far better that you compare against your prior years’ performance & then make changes that work for your operation from the perspective of operations & debt/cow.
The last point I want to leave you with is this. You can make improvement in various cost areas! If you study it, you will no doubt make positive strides on your costs/cwt. That is the very basis of the “Measure it, Understand it, Control it and Improve it” concept. It can apply to any aspect of your business or life!
What action or learning do you need to undertake this week? What will you do differently, going forward?
Here’s a suggestion for you. Sign up for our new Success Strategies Business Navigator Program. If you are open to learning new concepts and discussing them with other producers, you should take a look at this new program that will start this fall. It’s completely online, freeing you from travel but offering you an opportunity to learn from industry experts in the areas of milk marketing, management, financial analysis & banking/finance. For the value of the milk production of one 85 lb cow for a month, you can enroll in this quarterly workshop program. What have you got to lose?
You won’t regret it. I wish you the very best for a success-filled year!