Check in on Change
By Candace Krebs
Winston Churchill once observed, “If you don’t take change by the hand, it will take you by the throat.” With rampant changes in technology, weather, markets, consumer preferences, trade and politics, how can those involved in the agriculture value chain manage change proactively so it doesn’t end up managing them?
Engage and Reframe
Mike Doherty worked as a cooperative business expert at USDA when Vice President Al Gore undertook his famous “re-invent government” push.
As a result, Doherty went through extensive formal training to become a change management facilitator for USDA. Even then, change management was not a new idea.
“Large corporations and agencies traditionally used an old-school, top-down style, but in the 1980s and ‘90s there was a dawning realization that maybe they would be better off with a more touchy-feely approach,” he says. “Eventually, it became a whole field of study.”
Years later he still carries lessons from his experience as both a trainee and facilitator as senior economist and policy adviser for Illinois Farm Bureau (IFB).
“We, as humans, do not tend to react to change well, especially as we get older,” he says. “Going through training heightened my awareness that change is a process. There are things you can do to mitigate the downside, and it’s usually not as bad as we tend to think it will be.
“Fear is self-protective on our part. It comes about from not knowing what to expect,” he continues. “But risk can go either way: it can be positive as well as negative.”
While it’s obviously the potential for negative impacts that give change a bad name, the key takeaway from Doherty’s training was that talking it through in a group setting with all involved can have a buffering effect.
“It’s all about discussing the ‘why,’” he says, as well as
anticipating in advance what issues are likely to arise as the change is implemented.
Within agriculture, he sees the communication emphasis being particularly valuable to multigenerational family businesses, since different age groups tend to see and respond to change differently. Being open to another perspective and willing to reframe how you look at something can yield breakthroughs, he points out.
Break it Down
Looking at change management as a process of walking through a series of steps appeals to Gary Schnitkey, farm business management specialist at the University of Illinois.
“Over the last three or four years, farmers in the Midwest have moved from planting soybeans after corn to planting them before corn. That is a good example of moving from one method of operation to another in a way that requires rethinking the old paradigm,” he says.
There’s a psychological component that goes with that, he’s
quick to add.
“People get in a routine. They’ve found a system that worked well for them with good results, so making a switch is hard. There is always some discomfort involved,” he says. “It’s just about getting out of that mode or attitude or belief you’ve had for a long time.”
It helps to develop some degree of comfort with discomfort and be willing to tackle it head-on. “With the reduction in returns we’re seeing, one of the things we’re going to have to do is reduce our cash rent arrangements. Looking at ways to make that happen is something that can be hard to do, but it’s also necessary,” he says.
Strive for Continual Improvement
Michael Langemeier, professor of agricultural economics at Purdue University, proposes replacing the term “change management” with the phrase “continual improvement.”
In other words, be positive and proactive rather than putting all your energy into avoiding negative outcomes.
“The idea there is to always ask ourselves, is there something we could do better next year? To do things better, do we need to learn a new skill or purchase new technology? That’s a self-evaluation we should probably put ourselves through at least once a year,” he says.
A simple tool for that is a written skills assessment. Langemeier developed checklists in key areas that include production and operations management, financial management, general business management and personal decision-making. Working through each is a way to individually or collectively identify weaknesses and skill gaps and then set goals for how to address them.
Of the four categories, Langemeier believes finance is the area that tends to be least popular and most neglected by farmers.
“I think most people would admit we could do a better job in this area, especially with the current economic climate and the size of the assets at stake. It’s obviously a more important topic than it was five years ago,” he notes.
The main tasks associated with this category are generating good financial statements, conducting routine financial analysis and budgeting effectively.
Ramp Up or Link Up
Danny Klinefelter grew up on a farm in Illinois and started his career in Springfield before going on to a 30-year business and academic career, mostly with Texas A&M University. He retired last year and now co-edits a web-based newsletter, Gray Hair Perspectives, targeted to bankers, farm managers and financial planners.
He’s best known for developing The Executive Program for Agricultural Producers (TEPAP) into one of the most respected farm business training programs in the country.
Being change oriented and quick to adapt are defining characteristics of the 2,500 farmer-leaders who have participated in TEPAP over the years, but Klinefelter also chose to make cultivating those traits central to his curriculum.
“People have to realize if you want to succeed, and not just survive, you have to be continually learning and making improvements. The person who enjoys that has an advantage over someone who resists change,” he says.
He recommends creating a culture of learning within a business and constantly seeking to identify possibilities that have not yet become obvious to everyone else. Spend as much time analyzing what to stop doing as evaluating new opportunities.
In the current climate, it’s especially important to find ways to get more out of the same resources, he adds. He knows farmers who have hired someone to work a second shift on the planter to double-up use of the equipment or added backhauls to their deliveries.
“A guy I know farms in 12 states. Not only does he diversify his weather risk but he can move people and equipment around seasonally to take full advantage of them,” he says.
Many farmers are also collaborating and pooling resources to get access to the best machinery, technology or management expertise.
“More people are realizing one person can’t do it all. It takes a team,” he concludes. ■