With Father's Day coming up this weekend, I took the opportunity to interview my Dad, Chuck Hessenflow -- who has worked with agricultural cooperatives for over 30 years. My Dad and Mom both grew up on farms - and I have absorbed much of what I know about this sector from them.
Sustainability is about taking steps and actions to build something valuable that also enables the next generation to do the same. One of those steps should definitely be mining the wisdom of the previous generation. So, your sustainability task for today: interview your Dad about what he thinks makes a successful and sustainable business. I'll bet you learn more than you think you will. I did!
Interview with my Dad: Chuck Hessenflow on Co-ops, Leadership and Sustainability
I know you grew up on a farm and that Grandad farmed wheat and cattle – but give my readers a little more background about your roots in the agriculture industry.
I grew up on a dryland wheat and cattle farm in Northwest Kansas. The crop rotation included wheat, milo and summer fallow. The cattle operation included caring for a cow calf herd then feeding out the calves to finish. I attended high school and Decatur County High School which was large enough to provide a variety of educational and other activities, yet small enough to allow most anyone who wanted to, to participate. FFA, 4-H and sports were my choices.
After graduating from high school, I started college at Fort Hays State University after my parents asked me where else I thought I would be staying if I did not go to college? After two years, I transferred to Kansas State University. Upon graduation, I taught three years at Kensington and Beloit High Schools on ag education and vocational topics.
Teaching challenged and improved my people and speaking skills dramatically. I have always been very grateful for that experience. After 6 years of teaching, I decided to change career paths and went to work for Farmway Coop in Beloit, KS.
When did you start working with farming co-operatives? How long have you worked for them and what types of activities (especially around business planning and growth) did you perform?
I began working at Farmway in 1979 as an agronomy field man doing soil testing, and making fertilizer, seed and pesticide recommendations and sales presentations. Over the next thirty years I held several different positions including Member Relations, Credit Manager, Petroleum Department manager and North Division Manager.
Also during that time I was chairman of two LLC's and twice president of the Petroleum Marketers Association of Kansas. There were definitely a variety of product, customer, employee and management challenges. Due to this variety we always tried to surround ourselves with the best people and industry resources and use their best ideas.
Whether trying to improve daily operations or researching, planning and executing new start-ups, and mergers; success was always dependent on a unified effort of committed people at all levels.
What things are necessary to build and maintain a well-run co-op? What makes the difference in sustaining a business long-term?
I believe well-run cooperatives are those which define, understand and communicate their cooperative mission. Cooperatives were originally formed to profitably provide for the needs and services that farmers could not do for themselves or obtain fairly in the marketplace. In these areas, cooperatives could develop a competitive advantage.
When originally formed, members of co-ops were almost all identical in operation type and size. Their needs were basically the same. In addition the organizational structure gave the members control of the mission and operation of the cooperative. This control can be a competitive advantage, but that advantage is totally dependent on profitably meeting member needs rather than what some customers want.
Today's cooperative customers are much different. Their operations vary tremendously in size and type of operation. Many specialize in specific activities – including some that were unknown just a few years ago.
It seems to me, that cooperatives that have identified changing customer needs and modified their operations while remaining true to the cooperative mission have been successful. On the other hand, cooperatives that have not identified new or obsolete member needs or, have continued operating as if all customers still have the same needs, are failing.
After 30 years of working for Farmway Co-op, I worked 5 years for a privately owned company. It is my opinion that the cooperative member control and financing model does not effectively compete in highly competitive business operations in which there
is no specific customer need. Cooperatives must pick and choose their entry and exit in business operations based on member need, competitive advantage and profitability.
What are the traits of a good leader? Who would you consider a good role model for the agricultural industry to look to?
All successful leaders are able to identify and plan the best strategies. They are able to communicate well, execute their plans and have an effective and consistent accountability system.
Successful leaders have developed their own individual special skills. They also possess the ability to maximize team and industry resources. All leaders have some amount of people skills and decision-making processes that promote efficiency.
Some push, some pull and some lead. These skills and systems can insure at least short term success. It is no accident that the very best leaders are the most respected people in the industry. They have strong values and principles built on honesty and merit as well as profit. They use superior people and communication skills to inspire others.
Finally, it seems to me that longevity is the truest test of leadership skill. As Fritz Gwinn, the best leader I worked for said, "The true test of a leader is the ability to build a culture that can continue to operate as people come and go."
Longevity results from a system of honesty, merit, service, and profit.
Decision-making is shared and managed – which inspires a culture of employee ownership and trust. Decisions are made as close to the customer as possible. As a result, customers receive better more informed service and it is easier to promote people and ideas from within.
I know you have seen and lived through some bad management decisions and less than exemplary leadership – what are some lessons learned that you can share with others in leadership positions on co-ops or other ag businesses?
Unfortunately, I have experienced poor management and poor management decisions. Although they are actually very different events, one follows the other just as closely as sick follows tired.
Poor decision- making generally includes too little research and not understanding the big picture trends of the industry. Project results are usually promoted rather than studied without bias. Almost always, individual benefits, (manager, directors, employees or customers) are considered instead of the overall well-being of the company.
Finally, poor decisions are generally are not driven by a company's stated mission and its values. Often, the phrase “thinking outside the box” is an excuse to ignore historic values. Just because the thinking is unconventional, does not necessarily mean it is good. Sometimes things that do not change are the most reliable, trusted and successful. A proven mission and values statement should only change based upon customer need, not project projections.
Having worked for a cooperative for almost 30 years, been a member of several boards, and later for a privately owned company I have come to believe the two factors always involved in poor management are chain of communication (protocol) and poor accountability.
Employees with a strong chain of command and communication protocol know what to do, how to make decisions and who makes them. It is crystal clear who their supervisor is and what is expected. They understand how to work within the system and what the particular grievance procedures are. This protocol is vital for day-to-day operations and moral. When directors, managers, supervisors and employees don’t have clear procedures to follow; chaos and corruption results.
Probably the most common reason for poor management is the lack of accountability. People have a natural desire to improve and will do what is expected. Accountability measures and reports employee or project performance. It must be driven by merit as defined by the values of the company and must be reported to the employee and the company on a regular basis (the more often the better).
Finally, accountability measurements must be acted upon. Finding good people and rewarding them is only half of the formula. Poor performance must be dealt or it will become the cultural lowest common denominator.
You have always been such a champion of “buy local” and support the home team. How important is this concept for the future of agriculture and co-ops? Is this an outdated concept?
Today's marketplace has become driven more and more by price. Generally speaking, to accommodate this strategy, store locations have been reduced to a minimum and sales volume per store is maximized. Operating costs and product prices have been reduced by decreasing product quality, negotiating volume driven discounts and by more closely managing inventory and transportation. Customer service has been reduced to a “find it and load it yourself” store with a convenient return policy. Some businesses are simply web sites with a convenient return policy.
Also, manufacturers will build their products to encourage higher volume purchases including different quality products in very similar product packages. These high volume strategies are designed to be predatory toward low volume competitors who are not able to access volume purchasing discounts.
Paraphrasing John Ruskin, "There is nothing one man can make that another cannot make cheaper and sell for less." The key to this statement is how people define the word cheaper (less quality, or less cost). I am still a pro ”buy it local” guy, but today's consumers often don't value the difference between local access, quality people, quality products and service until access to it is lost. Examples are grocery and hardware stores, restaurants etc.
Small and low volume businesses must offer and define quality and service if they are to compete. I still look for and champion local when I find businesses that actually provide the afore mentioned quality and services. Having lived in a community of 2,000 and now a community of 50,000 it is amusing to me to see them both using the buy it local campaign strategies. Value, product knowledge and customer care have become niche markets. It also is amusing to me that those are the qualities the volume stores try to identify with.
You have always provided me with great career advice – share some of your gems on this Father’s day if you would (hint: you are who your friends are J)
These are interesting bits of wisdom I read or heard over the years. Most are paraphrased and the original authors are unknown to me.
You are who your friends are.
Show up on time, be where you are supposed to be, know your lines and you will be ahead of most of your competitor actors (Humphrey Bogart)
No tolerance rules are often excuses for executives not to make difficult decisions.
You are usually as good as your competitor makes you, so compete with the best.
You can't beat vanilla with French vanilla.
When the drowned believer gets to the pearly gates he and ask why the Lord did not save him from the flood as he prayed, the reply was: You were sent a ranger in a jeep, a coast guard boat and then a helicopter and you ignored them.
Equal is not equitable
You don't always have to outrun the bear, just not be the slowest runner.
Passive reaction encourages aggressive behavior.
Acts done for the the "common good" are generally a form of ternary.
Never understate the obvious
Never let schooling interfere with learning (Mark Twain)
Be sure the light at the end of the tunnel is not the train (Will Rogers)
The (first or) last one to speak is not always the winner.
I'd like to send a special thanks to my Dad for being such a strong, positive role model for me and wish all the Dads out there a Happy Father's Day -- please do continue to share your wisdom and your wallets with us all!