Sometimes the purpose of a business is very clear, however many times it is below the surface, as businesses simply get on and “just do it”, but are driven by something in them that is great. Some themes come up frequently in terms of purpose – whether the businesses are outwardly successful or struggling. These are a willingness to:
- fulfill a personal drive and ambition to do something great or to be the best
- provide a foundation for family well being
- fulfill a way of life and a genuine love of farming
- provide something different that is good for people and the world
- enhance financial wellbeing
- simply do it, because it’s what we do.
The operations I have observed had a variety of ways of driving performance, and many different ways at attempting to improve their practices to achieve better results. Focuses included:
- building and working from a solid financial foundation
- enhancing competitive advantage and responding to the market
- being more expert in technical aspects of their operation than others
- having a good knowledge of the regulatory environment and using this to advance business and gain competitive advantage
- maintaining stable access and right-to-farm suitable land-investing in their business and enhancing innovation
- pushing the operation beyond its natural performance trajectory
- recognising the capability of people in the enterprise and enhancing this as required
- effective collaboration throughout the supply chain
- an integrated approach to the supply chain
- having a good story and telling it well-maintaining a commercial edge
- organising themselves well and disciplining their strategic decision-making
- trusting their gut
- taking the leap into the unknown when it felt right
- working collaboratively to enhance the businesses advantages as above
It is important to note that whilst many of the operations I studied are operationally sound, run professionally, and inspirationally led, not all are overwhelmingly viable businesses from a profit and loss perspective, or necessarily successful farming operations. There are many reasons this might be the case, but common themes are vagaries of the market and fickle consumer behaviour affecting demand in market, distortion of markets due to government influence, bad luck playing a part in business, or a lack of focus on profit and loss due to other factors being the prime driver of an operation.
To summarise, in observing the above strategies to achieve the purpose of farm businesses, I have distilled some of the key aspects that agri-businesses should focus on to drive performance.
Many if not all of these drivers are needed in some form to run a good business – and indeed many of the seemingly positive behaviours can be a negative and hold a business back if applied in the wrong manner (e.g. hyper competitiveness leading to low pricing, driving market share up and profitability down).
In this paper I will further expand on what I believe to be the key drivers of the agricultural businesses I have studied.
Perhaps the key overarching factor is that these businesses affect what they can, take account of the factors beyond their control, and get on with the job and make things happen. They are results-orientated rather than problem-focused. They work hard AND smart to make their own luck.
John Murphy
