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GUIDEBOOK OVERVIEW |
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Building
Effective Farm Management Systems
A toolkit for
commercial-size family farm businesses to implement
proven strategies for managing resources and planning succession.
Purpose and Intentions of Guidebook
The purpose of this guidebook is to provide
family farm business with an implementation path for building and maintaining a
system of management that will:
1. Ensure effective business and personal
relationships,
2. Enable the business to achieve its intended mission, philosophy and key
objectives, and
3. Successfully pass the farm to the next generation.
This guidebook is written to bridge the gap
between Management Theory or "Principles" and the Application or "Practices"
required to effectively manage the farm business. It encapsulates long
established basic business management theories and illustrates how they can be
applied in daily practice in agricultural production businesses. This
guidebook is designed to serve as a key reference book for performing managing
duties and collecting additional materials and strategies as time passes.
Targeted Users
The intention is to develop a
user-friendly text for working managers and owners of commercial size family
farm businesses who are looking for effective strategies for managing people and
providing a leadership roadmap for the farm. The target audience for this text
can encompass the family owned and/or managed operation that involves as few as
two and as many as dozens of parties working together.
This guidebook can also serve
the following audiences:
1. Farm Management Educators – Educators
can use this text as a lab manual in a farm management class to teach students
how to apply technical management concepts in a real world environment using a
systems approach.
2. Consultants and Facilitators – This guidebook can be used to lead
local constituents or clients through a systematic process of building a
personalized management system.
3. Financial Services Vendors – Farm credit and financial services
providers have a captive relationship with family farm businesses that allows
them to see when a business has a serious need to advance skill levels or
management practices. This guidebook can be used to expand both customer and
vendor awareness of systems approaches to farm management. It can also be made
available to clients looking for resources to improve their proficiencies in
farm management.
Structure of Guidebook
The introductory comments
define the benefits of parties working together and common problems that develop
in family business relationships, and discusses general principles and
considerations in developing a Farm Management System. The main text of the
guidebook is divided into sections reflecting various stages of the management
process. Each section includes three components:
1. A general discussion addressing concepts and
how they apply to family farm management
2. Sample documents or case studies illustrating how these concepts have been
put into practice by actual farm operations, and
3. Worksheets or templates designed to enable the user to develop a specific
application of this component appropriate for his or her farm operation.
Some readers may swear that
their home or shop has been bugged and documented in this book. Others,
particularly former clients, may conclude I am divulging information discovered
under confidential circumstances. However, no farm can lay individual claim to
these problems. The problems described are general issues that have been
witnessed repeatedly or experienced personally countless times in family
businesses. If you see yourself or your business in this guidebook time and
again, take comfort in the fact that you are not alone. By acknowledging this,
you will find a peer close by who shares a similar challenge and a joint desire
to work together to implement better farm management practices.
In proposing solutions there is
some danger in committing actual practices or applications to paper. A farm
manager may be tempted to look at some of these practices as "formulae" or
"cookbook recipes" for applying practices in his or her operation. They then
extract the practice nearly verbatim without participation from others involved
in the business and use it without giving careful consideration to the principle
behind the practice. Effective managers will conceptualize which of these
principles are relevant to the operation, allow others affected by the process
to participate in the design process, and finally, implement a set of practices
suitable to the operation's character and basic mission.
You can think of this guidebook
as a John Deere or Case/IH Operations and Service Manual. The guidebook is
designed to help you build a system from scratch, solve a specific management
challenge, or do a major overhaul of your management process. You can read
through the whole thing, or if you have a specific problem or concern, you can
go directly to that chapter for help. You can be your own mechanic, or you can
call in outside help if the “breakdown” is beyond your capacity to repair.
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Synopsis of Each Chapter
The following questions provide
insight into what is covered in each chapter.
Chapter 1 – Introduction
- What is a Management System
and how can it add value to my business?
- How does a Management System
differ from a Strategic Plan or Business Plan?
Chapter 2 –
History and Key Trends
- “People who don’t know
history are bound to repeat it.” What are the key events that have shaped the
history or our business? How can documentation of this history be used as an
effective tool for our business team and audiences with whom we interface?
- How can a Key Trends summary
sheet be used to get a quick overview of my business?
Chapter 3 – Mission,
Vision and Core Values
- What do these different
terms mean and how can these “guidance documents” be used to provide direction
and focus to our business efforts and team approach?
- What techniques can be used
to build these statements professionally so they represent our business,
corporate culture, or image…not something that looks
canned from some management model?
Chapter 4 – Planning
- What are the various forms
of planning that confuse, confound, and consume family farm managers’ time
(production plans, marketing plans, financial plans, contingency plans,
manpower plans, strategic plans, succession plans, retirement plans)?
- How do we custom
design or tap into proven models that allow us to do effective operational and
strategic planning?
- What are the Key Performance
Areas we should be focusing on to measure our business success?
- Why is goal setting so
important in a family farm business, and what are some ways we can get
personal and business goals committed to paper and communicated to appropriate
audiences?
Chapter 5 –
Organization and Role Descriptions
- How do we describe reporting
relationships, divide roles and write job descriptions for parties working in
unique roles in a family business?
- How do we decide who will be
the manager or boss in transition situations, and what attributes will be
expected from the leader of our family business team?
- How does the concept of
“career paths” relate to family farm businesses, and how does one know when it
is time to turn over the wheel to a successor?
Chapter 6
– Defining and Documenting Farm Operating Policies
- What are the critical areas
in your business that need to have clear policy understandings to insure sound
operating, financial and personnel practices are followed?
- How do I write a set of
policies and communicate them to those affected by the policy?
- Several “land mine” topics
are discussed that commonly are abused in family farm businesses. Information
is offered that will guide farm managers through some of the considerations on
how to build good policy structures. As an example of what you may learn in
this chapter, ask yourself, “Do the members of our family business have a
clear consensus on how to handle:
- Housing and other benefits
provided to those residing on the farm?
- Setting compensation
levels for owner/managers, employees and part-time help (both family and
non-family)
- Division of business
earnings between those who own the business capital vs those who are
providing the primary management and labor?
- Withdrawals and
contributions of capital
- Inter-entity transactions
where there are multiple entities and ownership arrangement involved?
Chapter 7 – Standard
Operating Procedures
- Why are SOPs becoming
increasingly important as a tool to insure consistent performance of duties?
- What areas in my business
can benefit from documented SOPs accessible to employees responsible for
carrying out repetitious functions?
- How do I develop SOPs and
what is the best format to make sure employees can use these tools
consistently?
Chapter 8 – Communication
and Coordination
- How can we set up
professional rules for communication, and why is this critically important to
family farm survival?
- What management “pieces of
the puzzle” should be in place to have a quality communications atmosphere?
- How do personality styles
affect communication and teamwork? How can we learn more about identifying
and managing personality style traits?
- How do we use meetings to
improve farm communications and efficiency instead of just wasting time and
productive manpower?
Chapter 9 – Management Control
Systems
- What components make up a
management control system?
- Can and should performance
evaluations be conducted among family members working together in a business?
If we say “Probably, yes,” what proven strategies can we follow to implement
this practice in our business?
- What should our farm’s
Management Information System look like, if we were to design the ideal set of
information to support decision-making in our business?
- What are proven strategies
for creating, sharing and interpreting farm financial performance information
for appropriate audiences (employees, managers, owners)?
- Where do Ratio Analysis and
Managerial Reporting fit into our management control system? Do we know how
to define manageable segments of your business and track performance in each
segment (i.e. cost of production for key profit centers)?
- What are proven strategies
for training and self-development?
Chapter
10 – Conclusion: Putting Concepts into Practice
- What is the “bigger
picture”? How do we integrate our Business Management System and Strategic
Plans with other key focus areas of our life, such as faith development,
family, community service, health, recreation, etc.?
- What strategies can I use to
access reliable resources to adopt better management practices and keep them
current as our business grows, changes, and adapts?
- What are some practical
approaches for organizing Management System documentation, so it
is accessible to appropriate members of our family farm business?
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Appendix I – Building Effective Relationships with Off-Farm Family and In-Laws
- What are sensitive areas
relatives and friends need to be aware of?
- What are positive strategies
that family farm businesses have put in place to:
- Make the farm an inviting
atmosphere for those away from the farm
- Separate the emotions of
selling the “farm heritage” from selling a “financial interest in farm
assets?”
Appendix II
– Key References and Resources
- What are proven sites or
sources of information that further adoption or utilization of good farm
management practices and decision-making analysis models?
- If I could access a model
library of Family Farm Management topics, what “classics” would be in the
library?
Appendix III – Computer Diskette with Templates, Worksheets, and Application
Models
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What examples or templates
have already been built that I can use as a foundation to implement management
concepts on our farm?
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The diskette in the appendix
contains real-world examples and working templates for implementing a number
of guidebook concepts. The Appendix includes a narrative summary of templates
provided and special instructions on how to access or use each file.
Appendix IV
– Biographical Sketches and Farm Resumes
Copies of worksheets, templates
and application models and other selected documents are included on the diskette
included in the Appendix. This
material is provided to expedite your efficiency in building your own personal
management system. You are welcome to copy, cut and paste, or re-organize many
of these examples as foundation material in constructing your own system.
Please look at these applications as only one of many ways the concept can be
applied.
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Introduction