If you’ve read my blog before, you know I sincerely believe marketing can be done well. It requires, among other traits, the application of sound business management practices.
When I wrote last time about “constraints” that keep you from accomplishing more in life and business, it was more than just my opinion. I based those thoughts on time-tested business management theory.
The “Theory of Constraints,” found in present-day management textbooks, has its roots in a 1928 principle called “Liebig’s Law.” Liebig’s Law, or the Law of the Minimum, was first developed in agricultural science by Carl Sprengel.
The law states that growth is controlled not by the total of resources available, but by the scarcest resource – the limiting factor. This concept was originally applied to plant and crop growth, when agricultural scientists found that increasing the amount of plentiful nutrients in the soil did not increase plant growth. Only by increasing the amount of the most limiting nutrient was the growth of the plant or crop improved.
In his book called The Goal, Eliyahu Goldratt applied this scientific breakthrough to business. He popularized the Theory of Constraints, which states that at any given point in time, an organization has at least one constraint which limits its performance relative to its goal. A constraint can be internal or external, a machine, a person or managerial, like a policy or procedure.
Apply this principle to your grain operation and ask yourself, “What is my primary constraint?” For continuous improvement of your business, Goldratt encourages managers to decide how to deal with the constraint and, as a result, improve the overall performance of the business.
The Theory of Constraints can and should also be applied to financial management and marketing. Having spent nearly 30 years in the commodity business, I have seen just about every kind of constraint hold back producers from being better marketers.
I listed two examples in my previous blog: You may have superior knowledge of all the marketing tools that are so crucial to marketing today, yet lack the time to employ those tools or the discipline to make decisions and pull the trigger at the right moment. Conversely, you might have time to do your own marketing well, yet lack the knowledge necessary to strategically implement the strategies.
- If you already have superior knowledge of the marketing tools, spending more time learning about them is not going to improve your marketing. Instead, learn to have the discipline to use the tools and pull the trigger when you’ve made a decision to act.
- If you have the time and discipline but lack the knowledge, hire an expert. In marketing, you either need to be an expert—in which case you also need to have the discipline to take action—or you need to hire an expert.
Evaluate your marketing process the same way you evaluate your crop enterprise and all the other segments of your operation. Methodically look at it, figure out what you are good at doing, and focus on trying to improve your most limiting constraint.
I wish you well as you continue to remove obstacles in your path to marketing done well.
Scott Stewart is president and CEO of Stewart-Peterson, a commodity marketing consulting firm based in West Bend, Wis. You may reach Scott at 800-334-9779, email him at firstname.lastname@example.org.