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A special letter from Glen Ludwig
by Glen Ludwig

November 12, 2007

To: Richard McDonald, President and Scott Franklin, General Manager of Grandview Producers Cooperative
It could happen, but admittedly it’s highly unlikely. The possibility of it occurring, at your agribusiness is so remote you are not uncomfortable with your lack of a response plan. But please take notice; it did occur at a cooperative located just over 100 miles from your trade area.

Richard and Scott, I hope the above paragraph has you wondering what “it” is. This letter is provided as a follow up on discussion which occurred during the second day of your annual strategic planning retreat, which I facilitated last March. You'll recall there was discussion about the increasing complexity of your business, the rapid growth you are experiencing and the need for greater depth in your management team. As you read on, you will understand how “it” and your planning discussion are indeed related.

IT was the recent tragic accidental death of the General Manager of a large and fast growing cooperative. Last month I attended the funeral of good friend and client, the General Manager of Advance Cooperative Services Inc (ACS).

Steve Fisher was the 33 year old General Manager of Advance Cooperative Services, a diversified agribusiness serving most of 3 counties in Central Illinois. Steve left a wife and two pre-school daughters. This unexpected loss also left a Board of Directors and a team of over 40 employees looking for direction and leadership as they faced the completion of what promised to be a challenging, record-breaking fall season.

During the ACS 07 FY sales volume was over $130 million, nearly double the prior year’s number. Their Board had just recently approved a fixed asset budget for its current year of $3.5 million. ACS is obviously a cooperative that is committed to growth and serving a dynamic marketplace, and certainly a cooperative needing strong and confident management leadership.

When it comes to tragic accidents, fate's timing is never good. While agribusiness leaders can’t control fate, making some simple preparations to soften the blow of worst case scenarios is indeed under your control and is a fiduciary responsibility you share.

Allow me to roll the calendar back a few months. I facilitated the third annual Board and Management planning meeting for ACS in February of 2007. The planning agenda at ACS had many similarities to your retreat. But the ACS group got more specific in their quest related to reducing the cooperative's exposure to the unlikely risk that in the future their General Manager might suddenly be unable to perform his role.

That discussion gave the shocked and grief stricken ACS Board of Directors the courage and confidence to name an “Acting General Manager ” within less than 24 hours of the death of Steve Fisher. This timely decision provided important stabilization to the employee team and comfort to customers and shareholders as the huge harvest season continued after Steve was laid to rest. Steve’s family was not offended that a quick decision was made by the Board to begin replacing their loved ones leadership. Following the February retreat Steve had shared with his wife that a response plan was in place at ACS to address the unlikely possibility of his sudden loss of ability to lead. The ACS Board is now well positioned to make a determination, with out excessive pressure, as to the selection and employment of the best long term replacement for Steve.

As the elected and employed leaders of your highly successful cooperative, I urge you to capture value from the experience and action taken by another of my valued clients. Having a plan in place for dealing with an unexpected management opening is an important step toward assuring that you have adequate depth of human resource talent in place.

As we discussed at your retreat, employing and retaining quality people may become a limiting factor to growth and profitability in the future for many agribusiness. Those that plan best are likely to have a competitive edge. I suggest you make succession planning part of your long term human resource plan.

Please call me at 815-743-5374, if I can provide any further support to the execution of your plans.
Best Regards
Glen Ludwig
Creative Ag Solutions

Authors Clarification: The preceding is a modified replica of an actual letter mailed to several clients of Creative Ag Solutions (an agribusiness consulting firm). The scenario described actually occurred, but the names of individuals and agribusinesses and some details have been changed to respect the privacy of family members and clients of Creative Ag Solutions.
Glen Ludwig, Creative Ag Solutions, specializes in professional management services to progressive agribusiness clients. Ludwig may be contacted at 815-844-3512 or online at www.creativeagsolutions.com.

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