Long-term thinking is a healthy mindset for business, but for farmers, this thinking is critical for continued, annual success.
After all, longevity is a farmers’ primary goal.
This mindset is passed down from generation to generation, with decades or even centuries of constant care and consideration.
For the truly successful farming businesses, a farm, brand or food product becomes a household name that lasts for decades.
In contrast, corporate businesses are often focussed on quarterly or annual mindsets.
Leaders are only ever focusing on next year’s P&L, delivering shareholder results, meeting bonuses, and keeping staff. Marketing departments are prone to short-term thinking which might provide results in the short-term, but won’t build a brand that lasts.
Corporate businesses have a lot to learn from farming and agriculture. Here’s how corporates can start to incorporate those important lessons into their own businesses, focus on building a sustainable model, and avoid the temptation of quick wins.
Invest for future growth
Successful farming families can increase their revenue tenfold by building the right infrastructure around their business. In order to do this, they’ll typically invest around 90% of every dollar they receive back into the business for future growth.
The farmer’s business model is about sustainable, planned profitability that factors in risk and allows for a long-term view of the business’ future.
It’s about planning for the funds you’ll need in the far future, rather than merely planning for the funds you’ll need today, next quarter, or next year.
This sits in contrast to the world of corporate business, where a large proportion of a business’s profits are taken out of the business to line the pockets of those at the top of the food chain. As a result, long-term growth is impacted.
Consistency is key
When it comes to long-term thinking, consistency is the name of the game. Nowhere is this more true than when it comes to your business’s staff.
In the world of corporate business, management is ever-changing. Multiple studies have shown that CEO turnover is at a record high.
With short tenures becoming the norm, leaders and managers won’t necessarily understand the lifelong goal and progression of the business. One manager might focus on cost-cutting, but in five years time, a new manager will be appointed.
Their task? To resolve the effects of badly managed cost-cutting.
In contrast, farmers don’t think about next year as much as they think 10 to 20 years. Everything they do today is setting them up for success in 5 years’ time.
They might not think of this as strategic thinking, but that’s exactly what they’re doing. Corporate leaders would do well to take a leaf out of their book.
Working on your business, not in your business
It’s all too easy for leaders to fall into the trap of micromanaging their staff. The very best agriculture businesses understand that in order to be successful, delegation is critical.
The most successful farmers work on their business far more often than working in their business. In order to do this, they must have a team they can trust, filled with people who are trained to do the work as well as – or perhaps even better than – the leader.
The same is true in the world of corporate business, too.
A strong CEO knows how to step back and let their team do the necessary work within the business, so they can focus on the bigger picture. Only by taking a step back can a leader see the real issues, especially those issues that might arise in 4, 5, or 10 years’ time.
Your business is only as good as the people in it
A sustainable view of business means taking great care of the people you hire. This doesn’t simply mean hiring them for any particular role, but hiring people who might someday lead your business.
Investing in people is a typical trait of the very best farming businesses. In many cases, farmers are training their own family to pass down the business to; but even if your corporate company isn’t a family business, the concept remains the same.
Training, promotions, and greater responsibilities are all essential factors in employee retention. Leaders must think of their hires as the ‘next generation’ of leaders and must be generous with showing their team the ropes.
Any training or investment in people should always be done with this forward-facing view, instead of simply training for training’s sake.
Training will help the business in the short-term but the ultimate goal is to bring knowledge and experiences that will set the business up for long-term success.
Team members come and go, but a forward-facing culture goes beyond the individual.
It makes up the DNA of your business as a whole.
Of course, the passing down of knowledge must be done in a way that allows room for innovation and bringing new ideas to the business.
The best businesses allow a two-way dialogue between those with experience within the business, and those who have more experience elsewhere.
This way, when it comes time for the next generation to ‘inherit’ the business, a sense of longevity and ownership is already factored in before it even gets handed to them.
Once that culture is deeply ingrained in your workplace, you’ll be well on your way to building a business that will last a lifetime.