In late September, Dr. Donald Kraybill spoke at the Center for Dairy Excellence's annual Dairy Financial and Risk Management Conference and made a comment that I have thought a lot about over the past few weeks. He said, "We will continue to have a large number of dairy farms in this region because these farmers know few things provide the quality time spent with family like taking care of a dairy herd." Don is not a dairy industry insider, but his comments ring true to the underpinning of what most dairy farm families are especially thankful for at this time of year.
As Thanksgiving approaches and families gather in a spirit of gratefulness, giving thanks for the family and the opportunity to work together will be reflected in the prayers of many dairy farmers. At the center, our work is focused on strengthening the dairy industry. To that end, we offer many resources and programs to help dairy farm businesses succeed. And yet, as we build plans for the year ahead, we do so with recognition of why so many families choose and love this business, and ultimately, why they succeed. Simply put, successful dairy farm businesses have the commonality of being "enterprising" in their approach to family and business. Said another way, it is rare to find a successful family business without a foundation of acceptance, challenge, open communications, love, and forgiveness.
A key partner of ours is Mike McGrann, who leads the Center for Family Business and Entrepreneurship at Saint Joseph's University and who works with families in every industry imaginable. Mike has spoken at numerous dairy meetings on "how to be an enterprising family." His list of "enterprising characteristics" applies as well to dairy as it does to any business in any industry. There are several things that distinguish families in this way, and they are:
1. Enterprising families understand that today's dynamic marketplace requires families to act entrepreneurially and to generate new economic activity if they intend to survive and prosper over long periods of time. `
2. Enterprising families have a financial mindset which moves beyond the operational focus to an investor focus with a view towards the overall capital strategy of the family, creating new streams of value and finding a return on the totality of their assets. While the operational mindset is an important requirement for running an efficient business, the financial focus is a requirement for trans-generational entrepreneurship and ownership. This mindset includes 12 unique characteristics; five of which I have included here
A commitment to generating next generation entrepreneurship
A willingness to continuously revisit the existing business model
A desire to reinvest
A willingness to enter into partnerships
A commitment to innovation
3. Enterprising families focus on developing people and strategies to create new streams of value versus strategic planning mainly focused on how to pass their business from one generation to the next.
4. Enterprising families institutionalize the opportunity to seek processes in the mindset and methods of their family versus trying only to maintain their local advantage, safeguard their brands, assets and customers, or hone their operational efficiencies. These families talk often about management and ownership requirements.
5. Enterprising families work towards and recognize the importance of healthy relationships. Relationship capital is the reserve of attributes such as trust, loyalty, positive feelings, benefit of the doubt, goodwill, forgiveness, and commitment. Relationship capital is a necessary condition for long-lasting, trans-generational family businesses. Now here are two opposite but simultaneously true statements: Families have the natural potential to build relationship capital and have the natural potential to ruthlessly destroy relationship capital. Families who assume they will always have relationship capital or take their relationships for granted open themselves up to potentially destructive tendencies of families. Families who have relationship capital reserves are more likely to create enterprising dialogue.
At the Center for Dairy Excellence, we remain convinced of the opportunities to build successful family businesses in this industry. Achieving this takes clear recognition of the ever changing industry we work in and new strategies to build businesses that are competitive amidst these changes. It also takes families who actively learn to work in the business together. Few people are born with natural leadership and relationship building skills. Successful family business owners seek the council of others, encourage others to do the same, and pursue opportunities to learn new skills which enhance their "famliness potential." Thanksgiving offers time for us each year to reflect on that which we are most grateful for - which includes the opportunity to work with family doing what we love.