How time flies as we move into the second quarter of the 21st century. For many of us, the turn-of-the-century feels like yesterday, but changing forces of technology, geopolitics, weather, and consumer and society trends in the U.S. and globally will create extreme economic volatility. The next quarter-century will require a more intensive management mindset regardless of the size or the type of agricultural business endeavor.
In my years as an educator, business owner, and mentor, I have found the 5 percenter management mindset will improve any business’ odds for success. The time-tested performers are very balanced, resilient, and nimble. This mindset does not involve doing one component especially well, but many components just a little bit better in your business year-over-year or compared to the competition.
These managers will often use trend or peer analysis to work on becoming a little bit better each period, despite what uncertainties or opportunities are bestowed upon them. A 5 percenter is a little bit better in production, operational efficiency, and effectiveness. There is an old saying that “better is better before bigger is better.” A 5 percenter has a well-developed, executed, and monitored marketing plan, sometimes with the assistance of an advisor or coach. They will sometimes leave money on the table because they are not always hitting the peak of the market. They understand the consequences of risk and utilize a sound, well-thought-out risk management plan with the necessary insurances and operational practices that minimize risk.
A 5 percenter knows their financials and periodically examines key ratios and metrics to determine how the business stacks up. They maintain a nice balance between generating a profit and allocating earnings to growth, building working capital, and an income tax management plan.
A management mindset around people and leveraging productivity results through effective human resource practices will be critical in success. Historically, those involved with agriculture were often independent with little desire to deal with people. Being interdependent, networking, collaborating, and managing people is one of the elements that gives managers a competitive edge in today’s marketplace.
Regardless of the business or enterprise, the managers that go the extra mile will often challenge themselves to improve on three strategies, tactics, or actions that can be 5 percent better to excel in business and life. Remember, if you conduct this exercise, there are no traffic jams in the extra mile!