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Capturing Success with the “Critical Four”
by Glen Ludwig

Being an agribusiness consultant is a great learning experience. You learn something from every client. Clients understand that the consultant is not going to show up with a briefcase full of answers and a spiffy PowerPoint presentation packed with solutions. Rather, the consultant will arrive with a lot of questions and a willingness to listen. Through the process of questioning and observing, along with many hours of drive time thinking, I have arrived at what I believe will be the “critical four” business attributes behind agribusiness success for the next 20 years.

Visionary Leadership

Any agribusiness that is going to thrive in the 21st Century needs exceptional leadership--leaders capable of seeing through the fog of conflicting information and embracing change while capturing and polishing a vision of what their companies can and should be. These leaders will be highly effective at communicating their vision and gaining support for their initiatives. They will have the courage to keep their vision alive when others might openly suggest the vision deserves to fade away.

They will be accessible. True visionary leaders don’t reside in ivory towers. They live their company’s reality. They keep themselves close to the action and deeply involved in molding the culture of the agribusiness they lead. They are in touch with the operational side of their business, actively providing support to the team responsible for day-to-day execution. They are strategic thinkers with the discipline to document, confirm and retest the assumptions they make. They establish milestones to assure regular measurement of execution. They are starkly aware that their vision will mean nothing if execution is ineffective.

Passion for Profit

I believe it is safe to assume that all agribusiness owners and managers have a desire for profit. But, experience has taught me that true passion for profit is not always present. When profit is a passion, all decisions are seen in terms of the long-term bottom line.

Here is an example of how management might lose this passion. During the last two years of huge crop production, many country elevator managers began to favor customer service over profit. They quickly executed every conceivable grain storage and handling alternative, regardless of cost or risk, to accommodate their customers harvest service needs. Over the short term, this was a gallant effort supporting the cause of customer service. But, as a result, these elevators assumed significant risks with little or certainly inadequate financial rewards. The passion for profit was certainly eroded if not lost.

Were these decisions wrong? This is not for me to judge. These were undoubtedly very tough calls to make. It is important to recognize that the commitment to customer service will be shallow and only short term for agribusinesses that fail to regularly generate strong bottom-line results. Responding to the challenging expectations of tomorrow’s producers will be a capital intensive proposition. The capital needed to meet customer demands will be most available and most favorably priced if your company has a strong passion-for-profit track record.

Efficiency is not an Option

Exceptional managers routinely search for ways to modify their business models to capture better efficiency. Doing more with less is an important focus. We can expect the trend to continue to fewer, but strategically located service points. Those with creative approaches to both fixed asset and human resource utilization will earn a competitive edge in a market demanding maximum efficiency.

Taking advantage of the most efficient technology will always be a priority. But managers must be judicious. The bleeding edge of technology may not be the most efficient place to be. Many will opt for being good observers of technology utilization and “quick and close” followers. Certainly, the status quo will experience the drag of the mouse on the trip to the delete file.

As far as human resources are concerned, each year it will be more difficult to find employees willing to take on the agribusiness career life style. Managers will have to be even more effective communicators and creative coaches of employee teams. Information will need to be shared more openly with employees who will not respond well to “marching orders” type management. Decision making will be moved closer to the customer. Commitments to employee training will increase. Compensation will be more closely linked to individual performance.

Even the customer will become a partner in the quest for greater efficiency. There will be more open sharing of information between agribusiness management and the production agriculture CEO (prepare to relate with your biggest customers as CEOs). Improved trust and transparency within the business partner relationship will improve coordination and reduce costs.

CRM Culture

As consolidation of production agriculture continues, the stakes get higher at the customer relationship management (CRM) table. The most successful managers will reinvent their firm’s approach to customer service. Customer data and transaction bases will be linked via new software. More sophisticated market segmentation will be utilized. Equal-for-all marketing will be replaced by equitable, fair and relevant. Customers will be better served as their needs and expectations are uniquely addressed. Prices, programs and terms will become more transparent.

Employees will receive more specialized training in CRM. Many will become talented customer consultants. At the same time, the risk of a sudden loss or defection of a key employee to the competitor will be reduced by key customer information being stored for instant access in the CRM database.

Agribusiness CEOs will continue to monitor return on investment, but a new performance metric will also demand keen attention. Return on customer (ROC) will be a measure of success as financial and information management functions link and integrate systems to improve both marketing and financial results monitoring.

The future will be exciting for agribusiness owners, managers and employees. There are new skills to learn, new talents to be developed and new challenges to face. Will conquering the “critical four” guarantee success? No…there are other important business competencies that will contribute to both individual and corporate success. But based on what I have learned working with client and peers, the critical four cannot be ignored. They will be significant success differentiators for the foreseeable future.

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