Dealing with ambiguity during a global pandemic
Uncertainty is a theme for many businesses as we navigate the many ramifications of a global pandemic. How does a farm business plan strategically?
Synthese Agri-Food Network
I’ve found it surprising that certain farm businesses are reluctant to do strategic planning. I’ve had multiple folks say they were going to do formal planning this spring, then delay it until they know how things will turn out. That got me thinking why, in such an uncertain time – when strategic planning is so important – some are delaying. It comes down to scenarios and solutions.
Scenarios: When people are doing strategic or business planning, they feel the need to predict the future. COVID-19 taught us we cannot predict the future, but we can prepare for it.
If you were a food company, maybe you sold through grocers, speciality stores, direct to consumers or restaurants. You either got lucky or unlucky as restaurant business almost closed overnight. Conversely, if you sold to grocery stores and had a product you could keep producing, you won. Many food companies diversified their customer base while remaining competitive on price, and spread their risk on supply to have more options for sourcing raw materials.
Do it now. Don’t wait. Look at several possible scenarios, both the challenges and opportunities that may arise.
Solutions: Given all the uncertainty, what could you produce, that you are good at, that is going to be needed and desired in the future? How you could grow your crops and livestock in a way that either increases its value or decreases your risk? Be a solution provider.
Global Stakes Consulting
Red Deer, Alta.
The world has been altered, leaving business plans, stratagems and operational guides irrelevant and unhelpful.
The post-pandemic world accelerates the evolving role of agriculture in our society. Farms were already on the forefront of rapid change and experienced major technological innovations in their practices and operations before the pandemic. Instead of resisting the ambiguity brought about by change, farmers must embrace it with the view of mining opportunities along the way.
The old six-month strategy sessions are over. You need to quickly assemble your team to read the current market environment, assess the short– and long-term impacts to your business and your industry, and see where opportunities lie so you can thrive, not just cope, in the new scenario.
Beyond resilience, look to the future market and the potential for growth where there is real traction. Look to your future customers without neglecting the current. Design a clear strategy forward, knowing your capacities and the gaps that need to be filled. Review your strategic direction in three to six months, given the volatility of the situation, with the caveat to continue to refine your direction as things change (supply chain, labour, price volatilities, customer preferences and pandemic-related restrictions). This is the future of the strategy process that you, as farm owners and executives, should quickly master.
To succeed in today’s world, you must know how to pivot to seize the moment.
I find the most effective way to deal with change and uncertainty is to create clarity. Understanding where the farm is going and how it will get there.
A strategic business plan is a very practical tool that should be in every farmer’s toolbox. The value is not so much in the plan but the planning. Collaborating in this promotes good communication and, most importantly, aligns the farm team around goals and actions.
Business planning is particularly valuable for farms with multiple owners or several generations of family members to get everyone pulling in the same direction. A skilled facilitator can bring out the wisdom and creativity of the farm business team to answer three important questions:
“Where are we now?” is a critical assessment of the farm’s current situation.
“Where are we going?” is a forward-looking expression of what the farm is trying to achieve.
“How will we get there?” reflects the strategies and actions the farm will take to reach its goals.
Answering these questions will create clarity about the direction of the farm for the next three to five years. Expansion, contraction, diversification, automation, integration – there are many options. Making a business plan focuses the farm team, enabling it to make good decisions on major investments, people, succession arrangements and risk management.
The 10 things you should include in a business plan as well as some resources to get started can be found in 10 steps to a solid business plan.
From an AgriSuccess article.
To adapt in this pandemic, ag and food industries have been challenged to come up with new ways to do business.
COVID-19 has changed consumer preferences and is opening new value chain opportunities for producers.