A2B-Lancaster Farming, Saturday, January 5,2002
SUSTAINABLE
FAMILY BUSINESSES
In the area of agriculture sus
tainability, many disciplines are
important to help family busi
nesses improve profitability.
Some of those areas include pro
duction techniques, marketing,
environmental practices, business
skills, and applications in tech
nology.
One of the most overlooked
areas is in relationships and com
munication skills. As beginning
farmers and existing businesses
identify and develop a strategic
plan, a family business should
address how a family will inter
act in that setting.
Challenges that a family farm
ing enterprise or any other busi
ness experience is the separation
of family life from the business
environment. Often, there are
times a family problem develops
into a crisis and affects the busi
ness. Many decisions related to
sound business operation requires
an open mind and objective eval
uation. It is important that the
family establish a period of time
to discuss business issues, and a
separate time to address family
concerns.
An extension educator col
league told me the story of a visit
to his native homeland of New
Zealand. While he was there, on
a stretch of newly formed wet
clay road that was a mess of deep
ruts, and there was a sign. It
read; “Choose your rut carefully
you’ll be in it for the next five
miles.” This contrasting illustra
tion can best be applied to a fam
ily business. The “rut” in the
business road that is complicated
by a family issue can distract sen
sible resolutions to tribulations as
they occur.
The underlying quandary in
many family businesses is poor
communication skills. Commu
nication in a marriage has several
sets of important objectives for
addressing personal relation
ships, spiritual, family, and home
issues. Time should always be set
aside to discuss or address these
important matters.
Married couples should ar
range to get away for a day or
weekend if possible to work
through difficulties. This helps to
focus on the issue without dis
tractions. Trying to debate or ad
dress a personal issue during
business hours or feeding or
milking time never involves the
undivided attention of one or
both of the people engaged in
that discussion.
Sometimes grudges and hard
feelings are fostered in a stressful
environment. Depending on how
important or stressful the subject
is, this may interfere with per
formance of an important task
and potentially injure the rela
tionship.
There is some evidence that
farm accidents can result from
stress related to anger or unfo
cused attention to work detail.
Family businesses must keep per
sonal problems separate from the
work environment.
On the other hand, a business
requires attention to important
particulars such as planning, or
ganizing, directing, controlling,
marketing, supervising, and labor
. ‘.'ll
SustainablriM
Lebanofi County
management. The family and re
lationship side a family business
require good communication
skills such as listening and hav
ing respect for the other individu
al or persons in the family. In a
family agriculture enterprise,
sometimes the business and fami
ly concerns will collide. Often the
attitude or mindset influences
how problems or issues are ad
dressed. In most instances, you
have two prevalent mindsets: liv
ing to farm and farming to five.
The first mindset is ordinary to
many farming businesses, as well
as many other family enterprises.
In this category, farming or busi
ness is the main focus regardless
if there is a profit or not. Another
similar characteristic is purchas
ing equipment or personal items
without consulting a spouse or
other family members involved in
the business.
This group looks over the fence
of the farm lane or storefront
window to watch the neighbors
pull their camper to go off on a
vacation and look at each other
and say, “Where do you wish you
went this year?” Vacations and
recreation time are thought of as
frivolous activities that are an ex
pensive excuse to get away from
work. This mindset has a favorite
radio station WIFM “What’s
In It For Me.” Conflicts are
usually swept under the rug, and
the assumption that the injured
family member will “get over it.”
Busy husbands usually excuse
themselves from children’s
church or school activities be
cause of the demanding business
or farming schedules.
Even though farming or busi
ness operations are important
and have peak seasonal de
mands, the business is every
thing. With Sunday’s being an
important day off for spiritual re
flection and fellowship with
friends and family, you can al
ways bet that you will find indi
viduals with similar interests
seeking each other out at social
activities to discuss markets,
money, or other business-related
concerns. These few examples are
not inclusive to everyone that
lives in this mindset; however,
similar behavior and other nu
merous examples are not uncom
mon.
The second mindset is also
normal in family agriculture and
other businesses. This group re
lates to the family business as a
means to accomplish the objec
tives that help the family survive.
Like the previous mindset, a
profitable business or financially
challenged enterprises may exist
in this structure as well.
Emphasis is placed on the fam
ily needs. Family vacations add
to personal growth and enhance
relationships. Other family mem
bers are included in making deci
sions such as major purchases of
equipment or other inputs. Busi
ness activities are generally kept
separate from family and rela
tionship issues. Communication
skills are generally good, but
some improvements in several
areas are still needed.
The home and the family are
central. Social interaction in
cludes diverse interests not relat
ed to business. This business fam-
ily will be involved in many
activities. In some instances, this
can go to extremes with too much
emphasis on activities that can
increase stress levels. However,
this mindset lives for the family,
while the business or farm is the
method used to achieve the life
style.
Both mindsets have positive
and negative implications on ei
ther the family or the business.
The process of evaluating the
areas that can be improved in ei
ther category can apply self-help
skills to make adjustments and
initiate change. One such tool is
SWOT analysis.
SWOT analysis helps an indi
vidual evaluate Strengths, Weak
nesses, Opportunities, and
Threats. In business this is an ef
fective vehicle to resolve several
decisionmaking areas as a man
ager. This system also has some
value when applied to people and
relationships in the family busi
ness.
Strengths are identified as
positive aspects that are per
ceived or experienced internally.
Weaknesses are negative aspects
that are also internal in charac
ter.
Opportunities are positives
that are experienced externally.
Threats are external feelings that
are perceived as negative.
A business or family can de
velop a series of short lists and
identify at least three or four
items in each category. Some
people will have many more is
sues or items to list in different
categories. Other family mem
bers may not be able to list any
thing in one or two of the catego
ries. This process is important
since this will help each person
understand the diversity within
the family and the business. It is
recommended that separate lists
be made for the family and the
business. This is an effective
exercise that is used throughout
major companies around the
world.
This process accomplishes sev
eral important principles;
• Initiates personal reflection
• Stimulates thinking and
communication
• Identifies areas that an indi
vidual realizes changes are
needed
• Creates a teamwork ap
proach in business and family
• Helps family or business re
solve conflicts
• Contributes to improved
business objectives and family re
lationship.
The list should identify the
four categories and generally be
short but descriptive of any is
sues indicating strengths, weak
nesses, opportunities, and
threats. The main purpose of this
exercise is to isolate what really
is important. This effort facili
tates a strategic approach to key
issues. The key issues should
then be written in an elaborative
fashion to be offered in a discus
sion. If an issue is not listed or
elaborated in writing, it should
not come to the discussion phase.
This is self-defeating of develop
ing a SWOT list and distracts
the discussion phase.
Keep these rules:
• If it is an important issue to
discuss, then it must be listed
and elaborated in writing.
• Limit issues to three or four
of the most important.
• Focus conflict resolution on
repeating issues listed by other
family members as weaknesses
or threats when applied to the
family dnit.
• Do not criticize. Be objec
tive.
• Use the positive indicators
such as strengths and opportuni
ties to overcome the negatives
listed in weaknesses and threats.
What should you write down
under each category?
Under strengths, you should
answer the following questions;
Penn State Offers
Dairy SOP Workshops
UNIVERSITY PARK (Centre
Co.) “I can’t seem to get every
one pulling in the same direction
around here!”
“If you want it done right,
you’ve got to do it yourself!”
“You can’t get good help these
days!”
“I’d like to take a few days off,
but who’s going to do the work?”
“We seem to take one step for
ward and two steps back every
time we try something new,
what’s the point?”
If you can identify with any of
these statements above, then you
need to attend a Dairy Alliance
Standard Operating Procedure
(SOP) workshop. You will team
• What are your advantages?
• What do you do well?
You should be considering
these questions from your point
of view of the family members
you are working with. Don’t be
modest, but be realistic and hon
est. (If you find this difficult, try
listing your characteristics.
Hopefully these will be
strengths.)
Weaknesses:
• What can you improve?
• What is done badly?
• What should be avoided?
• (Family) What behavior or
habit can be changed?
Remember that this area
should be listed from internal
and external perspective. Do oth
ers perceive a weakness that you
do not realize? By being realistic
and honest with this category, it
may help an individual face un
pleasant truth about them. This
is really important since this cat
egory will possibly result as
strength.
Opportunities:
• Where are good changes
facing you?
• What are the interesting
trends?
A beneficial opportunity can
be identified as changes in mar
keting, technology, social stand
ing, lifestyle, or local events. You
will not always recognize every
opportunity when they first ap
pear. In some instances, you can
heighten your awareness to rec
ognize opportunities to capture a
greater share of them as they
occur.
Threats:
• What personal obstacles do
you face?
• What or who is your compe
tition?
• Is your position or responsi
bilities changing? Is your market
or production changing? Is the
weather a major factor? Is
changing technology a factor?
• Do you have bad credit?
Cash flow problems?
• (Family) You can probably
list anything you perceive as a
threat to you personally.
By developing lists and anal
yzing your individual strengths,
weaknesses, opportunities, and
threats privately, a narrative par
agraph is ready to be developed.
After everyone in the family
business completes a narrative
paragraph, the discussion phase
is ready to proceed. It is very im
portant to adopt rules to keep
discussions on targeted issues.
Take turns and identify the big
picture. The most important em
phasized rule should never allow
an issue that is not written in the
narrative to be introduced at the
discussion phase.
When a family business adopts
useful management tools such as
SWOT, you increase commu
nication skills and remain on tar
get in your enterprise. When you
recognize that sustainability be
gins with the family, then busi
nesses grow and remain profita
ble.
how to write, implement, and
manage standard operating pro
cedures using the SOP Process.
The SOP Process is a powerful
set of management practices that
has the potential to transform a
dairy business. It’s more than just"
writing down a set of how-to in
structions on a piece of paper.
Dairy Alliance’s SOP Process;
is a step-by-step method that be-'
gins with goal-setting, proceeds;
through development and writing
of best practices, moves on to
monitoring techniques, and con-'
eludes with strategies for contin-j
ual improvement. The process;
works throughout to draw in all
of the stakeholders relevant tg
each procedure. At the end of the
workshop, participants walls
away with a draft of one or more
procedures that they can quickie
bring to completion and put intg
practice. Mote importantly, they
leave with a blueprint for using
the SOP Process to dramatically
improve their dairy’s
ment and profitability.
If you are a dairy manager and
you want to take your skills to
the next level, contact Tammy
Perkins at Dairy Alliance (888)
373-PADA to register for the
workshops nearest you. If you ar|
a progressive agribusiness repre
sentative, contact a few of you*
clients and bring them with you
to the workshop. You can add
SOP development to your serv
ices and help your clients achieve
success.
For more information about
content of the SOP Workshop,
contact Richard Stup at (814)
652-6430 or RichStup@psu.edu.
Scheduled workshops include:
• Jan. 29: Bart Fireball, Rt.
896, Georgetown 9:30 a.m. to
3:15 p.m.
• Jan. 30: Weaver’s Markets
banquet facilities, Rt. 272, Ad
amstown 9:30 a.m. to 3:15 p.m.
• Feb. 21: Clarion County
Park, Rt. 66, Shippenville 9:30
a.m. to 3:15 p.m.
• Feb. 27: Blair County 9:30
a.m. to 3:15 p.m.
• March 20: Lighthouse Res
taurant, Rt. 11, Chambersburg
9:30 a.m. to 3:15 p.m.
Renewable
Energy Forum Set ,
GETTYSBURG (Adams Co.)
The Southcentral Region of
the Pennsylvania Young Farmers
Association has announced a
one-day seminar on “Renewable
Energy and Alternative Uses For
Crops” slated for Jan. 17 at the
Adams County cooperative ex
tension office.
Speakers include Scott Welsh,
York County ag economic devel
opment specialist, with a presen
tation titled “Are We Ready For
an Ethanol Plant?” and Ed Herr
mann, regional ag sustainability
agent presenting “Important
Products From Ag Commodi
ties.”
Rep. Steve Maitland and Sen.
Terry Punt will present a “Bio
fuels Legislation Update.” Bio
fuel topics involving soybean die
sel and ethanol will be addressed
by Rick Handley, director of the
Northeast Regional Biomass Pro
gram.
Adams County agent Lynn
Kime will speak on the impor
tance of crop insurance and
Welsh, Herrmann, and Handley
will also lead a biofuels panel dis
cussion.
For more information, contact
Tim Brown at (717) 359-5084.