Think Like a Strategist

November 12, 2013 06:46 PM

Embrace forward thinking instead of task-based planning

In the beginning, it was just you and your family, maybe a partner on the farm. You drove trucks, met with the crop insurance agent, made marketing decisions and emptied the trash. Now your farm has others who help with daily tasks and it’s time for you to "be strategic."

If you find yourself resisting "being strategic" because it sounds like you aren’t working hard, you’re not alone. Every leader’s temptation is to deal with what’s directly in front of them. Most producers stay busy doing "stuff." Strategic thinking means taking the time to think about what’s really important for everyone in the business to be doing.

"It’s about what you do today to get into the position where you need to be in the future," says Dean Heffta, Water Street Solutions senior director of development. "It’s spending time thinking: Where is our world headed? What are the decisions we have to make today to get our farm and our skills ready for what that future will look like and demand of us?"

Nature or Nurture? Are great strategic thinkers born or made? The answer is both, says Michael Watkins, cofounder of Genesis Advisers, and author of the new, updated and expanded edition of "The First 90 Days: Proven Strategies for Getting Up to Speed Faster and Smarter."

"The implication for organizations is that they must find ways to identify and cultivate future leaders with the capacity to think strategically," Watkins explains in a recent blog for "The Harvard Business Review."

The implication for the individual is that it’s pointless to worry about nature versus nurture, he says, noting that you should focus on nurturing the talent you have.

Watkins offers a few approaches to help develop your strategic thinking:

  • Immersion. Second language teachers often say that total immersion is the best way to learn a new language. It’s also the best way to figure out complex business environments. Immersion is key because people need significant "soak time" in an environment to build powerful mental models.
  • Apprenticeships. As with most arts, one of the best ways to learn to think strategically is to work with the masters in apprentice-like relationships. These offer low-risk environments to observe and learn.
  • Simulations. Business simulations are great for developing intuition about interactions among the variables that drive organizational performance. They provide a "manageably complex" environment where managers can safely experiment and gain insight into cause-effect relationships.
  • Case-based education. Accelerate the development of your strategic thinking by exposing yourself to a diverse range of realistic "cases" and letting yourself reflect on the experiences so you can absorb the lessons, Watkins says.

Execute. Growth begins with strategy. First, you must select opportunities, whether alliances, acquisitions or internal ventures, and then create a strategic plan to achieve them. Quality leaders move strategy from concept into reality, develop the leadership capacities of the team and drive change while remaining vigilant about countermeasures by the competition.

Once you decide what changes you’re going to make to get ready for the future, the biggest step is "doing." "What are the things that you’re going to do today to move your operation forward?" asks Heffta. "It’s execution—it’s the thing that holds us back from being more successful, and that’s making those changes that have to be made."

Not Your Grandpa’s Business

Farms are transitioning from a system of producing broadly defined commodities to products with specific attributes, notes Dan Hofstrand, retired Iowa State University Extension value-added agriculture specialist. This requires strategic thinking on the part of the producer.

"The links of the commodity chain were connected by a series of open markets," he explains. "The emerging chain will be linked by contracts, joint ventures or direct ownership. Those who adapt to these changes will have an advantage compared to traditional farmers."

Below is a snapshot of how the business of farming has changed from a traditional paradigm to a new paradigm. Think about these changes and ways you can adapt your farm:

  • Labor: In the past, farms were a one-man operation. Farmers expanded their business until their labor and management were fully employed. As we move forward, farms will be comprised of a team of employees, consultants and specialists. As a result, skills in human relations and the ability to work with others will become more important.
  • Farm Structure: Traditionally, farmers considered themselves to be independent of others because they did all of the farm operations. The farm of the future will be more complex. Much of their time will be spent working with specialists and managing labor. Farmers need to look atthemselves as being the CEO of their business.
  • Management: Because commodity production involves large amounts of capital, it has been important for farmers to spend a substantial amount of time managing capital assets. As we move toward growing and raising products with specific attributes, information management will replace asset management as the most important resource to manage.
  • Value: Because capital was so important in commodity production, farmers leveraged their resources by borrowing money or leasing assets. Leveraging money will continue to be important, but leveraging information will also be important.
  • Income. Because every bushel of corn was considered to be the same, maximum income could be achieved by increasing yield per acre. As production moves towards specific-attribute markets, farmers will generate the most income by increasing the amount of the crop’s specific attribute.
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