Why peer advisory groups work
Programs such as The Executive Program for Agricultural Producers (TEPAP) and the Top Producer Seminar offer excellent venues for continuing education, exposure to new ideas and issues, and opportunities to network. However, they cannot provide the final step in continuous management improvement.
Peer advisory groups can work through the issues related to implementation and follow-through, addressing problems and opportunities as they arise to help members effect change. Essentially, a peer advisory group acts as a reciprocal advisory board made up of top producers with skin in the game.
A peer advisory group includes five to 10 top producers who are not direct competitors and are willing to share what they know to fill in the knowledge gaps of others in the group. To be successful, peer groups require openness, confidentiality and mutual respect for one another’s ideas and opinions, even if members don’t agree. The value occurs precisely because everyone doesn’t see things the same or think alike.
In Argentina, more than 200 peer groups (known as AACREA) made up of the top farmers in the country have been flourishing for 50 years. There are successful farmer peer groups in the U.S., but it’s time more producers get in the game. With increasing volatility in input and output markets and the speed at which things are changing, the time to address problems and capitalize on opportunities is shrinking.
Row crop agriculture has been on an unprecedented run for nearly eight years. When we do experience a significant downturn—and we will—there will be a shakeout and further consolidation. The winners will be the best strategic managers.
Danny Klinefelter is an ag economist with Texas A&M and director of The Executive Program for Agricultural Producers (TEPAP).
Five Advantages of a Peer Group
1. In closely held businesses, the management team frequently view issues from the same vantage point. This tends to create blind spots and limit objectivity. Peer groups provide a way to overcome that problem.
2. CEOs and successors need a "sounding board" for their ideas. Have they missed anything, are there alternatives they haven’t considered or implementation issues they might have overlooked? Peer group discussions can provide feedback on ideas and provide greater insight and objectivity.
3. Peer groups can provide access to the collective membership’s network of contacts, sources of information, resources and expertise. Some of these groups have even served as the genesis for various business alliances.
4. Coordination of field trials, testing new technology and benchmarking marketing, production, compensation programs and financial information can multiply the availability and usefulness of information.
5. Assume that several producers decide they need training in some area of personnel management. The type of program and level of expertise they need might require one to three days, and bringing in a quality presenter might cost $3,000 to $5,000 a day in speaking fees, plus expenses. Assuming this type of program isn’t available through their state’s Extension service, the cost for one producer could be prohibitive; but, shared by five to 10 producers, it could be reasonable.
- January 2012