D A I R Y I n i t i a t i v e s N E W S L E T T E R
V o l u m e 1 0 I s s u e 1 S p r i n g 2 0 0 1

Beyond the Bottom Line

When the Going Get Tough,
the Tough Get Going

ROBERT A. MILLIGAN
Department of Applied Economics and Management
Cornell University

SHARON M. DANES
Department of Family Social Science
University of Minnesota

We have often heard the cliché: "When the going gets tough, the tough get going." We do not question whether dairy farm families are tough. We know they are. We do not question whether they are ready to get going. We know they are. The question is: What should a dairy farm manager do to "get going," and where should he or she "go"?

Let's start by looking at another kind of family business with a similar dilemma. Myrtle's Diner has been serving meals for more than 40 years. Myrtle and Frank started the diner in 1957. Their son, George, now has primary responsibility, but rarely a day goes by without a visit by Myrtle. The diner has successfully supported Myrtle and Frank and now George and his family.

Recently, however, business has been declining. A strong local economy has made it hard to hire competent cooks and wait staff. As a consequence, food quality and service have declined. A recent case of food poisoning added to the difficulties, as did the opening of a large restaurant from a popular national chain down the road a year ago. Myrtle's Diner is under great economic pressure and George is feeling severe stress.

George is "tough" and is ready to "get going." Consider the two alternative strategies for George:

George's Alternatives

ALTERNATIVE A: George could be "tough" by working long, hard hours. He could reduce labor costs and improve food quality by doing more of the cooking and waiting on tables himself. Perhaps he could get his family to work more as well.

ALTERNATIVE B: George could be "tough" by focusing his energy on improving Myrtle's Diner and by carefully considering the future of the business. He could begin by rekindling the current staff's passion for this family business and satisfying customers. He could focus on training, increasing employee satisfaction, and recruiting. George could also begin a careful analysis of the future of Myrtle's Diner to determine needed strategic changes, including dramatic changes such as closing the diner.

Now put yourself in George's shoes. What would you do? The first choice might well have short-term benefits, but would not likely resolve the underlying problems. The second choice, while counter to our instincts to plunge in and "work harder," has a greater chance of success. It would let George address the critical but extremely difficult issues facing Myrtle's Diner.
Many dairy farm families are in George's shoes. They have crucial decisions to make concerning the future of their business. It is easy and appealing to follow George's Alternative A. Even people who know that the second approach is correct find it hard to follow because of uncertainty as to what to do. How to implement George's Alternative B is the topic of this article.

Resilience

In times of change, we need to increase our resilience--our ability to bounce back from the consequences of change. Change experts, including Daryl Conner, author of Managing at the Speed of Change, have identified five characteristics of resilient people:

Positive
Focused
Flexible
Organized
Proactive

Each characteristic has unique qualities. Aspects of all five are needed for business success.

RESILIENT DAIRY FARM MANAGERS ARE POSITIVE

In a recent TV show, investigators were solving a bombing at an office building. The culprit turned out to be the son of a fired employee. The son was so incensed by his father's bitter complaints about being fired unfairly that he decided to "get even" with his father's former employer.

Although fictional, this story illustrates how dramatically our words and attitudes impact ourselves and those around us. The father had no idea how his words and attitude were impacting his son; in this situation, devastation resulted.

A positive person views life as challenging and ever-changing but filled with opportunities. If an individual is not positive and excited about what he or she is doing, it is time to seriously consider a change in attitude or job or both. Each of us must seriously examine our attitudes for the sake of ourselves and for the emotional health of those around us.

One help in staying positive is to focus on things that we can influence. Our circle of concern (right) includes both things we can influence and things we can't. Staying inside our circle of influence will lead to a more positive attitude.

For example, think of a time when bad weather delayed planting or harvesting. The weather was certainly within your circle of concern. However, it was NOT within your circle of influence. Dwelling on the weather only made you mad. The alternative was to focus on your circle of influence--to concentrate on making preparations for planting or harvesting when the weather improved.

RESILIENT DAIRY FARM MANAGERS ARE FOCUSED

Proverbs says, "Without a vision, the people perish."

You probably are a part of a business with a mission that involves a dairy farm business. But what is your vision? Rural living? A particular life-style? Producing nutritious food? Helping feed the people of the world? Being your own boss? Owning a family business? Owning a farm? Owning a dairy farm? Is your vision shared by other family members?

We believe you know your vision. But you probably need to more clearly articulate it. When you share it you may find, as have many farm families before you, that there is more than one mission that can fulfill the vision for you and your family.

One danger of not being focused on your real vision and mission is that you can get stuck and resist change when that change would improve your situation without deviating from your vision. You must continuously ask how important it is to your vision to do things a certain way, to use a particular technology, to have a specific farm size or enterprise mix.

We all can become more resilient to change if we know and focus upon what is really important--our personal vision and the vision of our family.

RESILIENT DAIRY FARM MANAGERS ARE FLEXIBLE

MIT professor Peter Senge asks his students to view change as a biologist would. What does he mean? Think of a plant or a crop that is not growing well--perhaps it is wilted. What do you do? Do you tell it to grow? Of course not. You figure out what is wrong and fix it.

When we find ourselves or others not changing, what do we usually do? We tell ourselves or others to change. That's like telling the ailing plant to grow!

Senge suggests that we approach change as we would approach the ailing plant. He recommends we focus on why we or others are not changing, then remove the constraints to change and provide needed support to enable the change.

What are some constraints? We may be negative and need to become more positive. We may be stuck in the outer portion of our circle of concern and need to move into our circle of influence. We may need more information and time to collect, analyze, and use that information.

Senge also suggests we support those who need to change. For others who need to change, that means providing encouragement and assistance. What does it mean when you're the one who needs to change? It means reaching out to family and friends and asking for their support in your efforts to change.

RESILIENT DAIRY FARM MANAGERS ARE ORGANIZED AND PROACTIVE

Being proactive means finding ways to adjust to current industry trends to move toward business goals. It means addressing issues that are within your circle of influence and making adjustments required to compensate for changes that are only within your circle of concern.

A business plan aimed at enabling you to fulfill your vision and mission will keep you organized and "on track." Communicating the components of the plan to other family business members, creating enthusiasm and passion for the vision, and adjusting the plan when needed are all part of developing and maintaining resilience within your dairy business.

A Dairy Farm Example

Let's look at how being positive, focused, and flexible can make a difference on a dairy farm. Diane and Frank Smith are on the young side of 40 with two children, ages 10 and 12. The dairy farm they own and operate is not providing the economic return they believe they deserve and they need to support their family.

Let's look at some alternative visions the Smiths might hold and how they impact their alternatives. Let's also speculate on what the Smiths might do to focus on changes within their circle of influence.

ALTERNATIVE A: Diane and Frank believe in the virtues of rural life. They want to raise their children in a rural environment and provide them with opportunities to grow and develop so that they can become productive, happy adults working in whatever field they find satisfying. They live in the home where Diane and her father were born and raised and would like to stay there.

The Future: Diane and Frank have many alternatives. However, making no change is not one of them, because their current income won't let them fulfill their vision for their family. They might modernize the current dairy, expand the dairy, change farm enterprises, or reduce or eliminate the farming operation and get local jobs within or outside of agriculture.

ALTERNATIVE B: Diane and Frank are both fourth generation dairy farmers. Retaining an operating dairy farm is basic to their personal and family needs. They are not interested in and/or able to make a major expansion. They realize that passing this farm to their children is not a viable option.

The Future: Diane and Frank are in a difficult situation. They are 25 to 30 years from retirement and retaining the farm may not be viable for that long. They should focus in two directions. First, they must do everything they can to achieve the maximum economic return from the business they have. They also should consider alternative sources of income that fit within their family vision--for example, creative enterprises (sweet corn? pumpkins? farm tours?) and/or part-time off-farm work.

Second, they must set criteria for how much they are willing to sacrifice to fulfill their vision of owning this dairy farm. In other words, at what level of extra work and lost economic return should they alter their vision and seek something else? Until then (and hopefully "then" will never arrive), they must develop positive attitudes and focus on their circle of influence.

ALTERNATIVE C: Diane and Frank have always owned their business and never worked as employees. They desire a financial return that will let them provide opportunities for their family and spend time with their children as they grow. They don't believe they would be happy working for someone else.

The Future: Again, the current situation does not appear to fulfill their vision. They could expand the current dairy. Depending upon their skills, they could consider some other type of farm or nonfarm business. Any business expansion or startup comes with risk as well as opportunity. They do have significant equity and that is a great start. They need to develop a business plan that will let them fulfill their vision.

Summary

When the going gets tough, the tough get going. "Tough" means resilient. It means you have the ability to bounce back from the consequences of the changes that are all around you. "Getting going" means to be positive, focused, flexible, organized, and proactive. It means developing new skills as a manager as well as carrying out the business plan. It means understanding and building upon human resources as well as financial and physical resources.

D A I R Y I n i t i a t i v e s N E W S L E T T E R
Volume 10 Issue 1 Spring 2001