Category: Change

Damaged relationships: the price of a failed succession plan

I have read many articles about how lack of succession planning puts the financial future of farms at risk.

They are attention grabbers and while I agree that the lack of or an ineffectively implemented succession plan can have financial implications, mostly farms survive.

These same articles rarely talk about the hidden price of a failed succession, which is the harm to relationships. Family relationships are on the frontline of the succession process. We have all heard the stories about broken families following botched

If asked, the parents in those families would have said their key goals were “to keep the farm in the family and for the kids not to fight.” And yet fight they did. We all hate it when our kids fight, at whatever age.

In succession planning, there are hard and soft issues. Hard issues are those that can be measured in numbers such as net worth and profitability that can be dealt with in a technical manner.

Soft issues are the human side of the equation where we must understand the dynamics of the people involved. A poorly planned and executed plan may not only suffer negative financial and taxation consequences but can ruin family relationships.

Soft issues?

Soft issues can include unresolved conflict within the family, lack of trust among family members, unrealistic expectations and how to be fair to everyone when only one child wants be a farmer. Other issues are fear of losing control and fear of putting the family wealth and a lifetime’s work at risk.

Farm owners face many difficult questions: how do I deal with unreasonable expectations or feelings of entitlement that children may have? How do I treat those that don’t want to farm? Can I still play a role in the farm business?

Soft issues deserve the same degree of attention as the other issues for an effective plan—and they are often the most challenging.

Communication is key

One of the first steps I take when assisting clients with succession planning is to interview all family members, those actively farming and those who are not.

I want to identify divergent interests but also those areas of common interest and expectations that can be built on to move the plan forward. I also want to identify potential obstacles, often soft issues that are difficult to quantify but can erode trust. There is no one-size-fits-all approach.

Often when we get down to the detailed planning, it’s mom and dad and the successor at the table but every family member’s view must be represented. Parents instinctively see their children as equals; they love them equally after all.

However, when it comes to the farm, and keeping it in the family, equal distribution of wealth is often impossible. That leads to the “fair versus equal” discussion and communication is the only way reach consensus and harmony.

It’s important to discuss uncomfortable issues and you must make sure that whatever comes out of that process is effectively communicated to all in the family.

You can plan all you like, but unless you communicate effectively around the issue of some children getting more than others, your succession plan could fail on one of its key objectives — family harmony. You may keep the farm in the family, but it will be a divided family.

Why start early?

Although reasons vary as to why people don’t plan for succession or delay it, it typically comes down to what David Maister, in his book Strategy and the Fat Smoker, describes: We put things off because “the reward (and pleasure) is in the future but the disruption, discomfort and discipline needed to get there are immediate.”

For many, the soft issues are especially uncomfortable and parents worry about upsetting the family dynamic.

Time is your friend – use it

In most situations, our clients have identified the successor or successors early on and planning could have begun far sooner, giving the family more options and time to plan and implement.

An early start gives family members the understanding of what to expect when the parents retire. It is important to think of succession planning not as an event but as a process that takes years. The sooner you start the more time you will have to work through the layers, evaluate multiple possibilities and have those important conversations.

Time is an enormous ally in managing the succession process while ensuring family relationships stay intact. Remember, families better their chances of success one conversation at a time.

Jonathan Small is a partner in MNP’s Farm Management Consulting practice in Red Deer, Alta. He can be reached at 1.403.356.1281 or jonathan.small@mnp.ca

Cow Fixer Vs. Herd Health Veterinarian? BEEF Vet Examines Production Medicine

Production medicine is part of every-day veterinary medicine. As the veterinarian, you should always be thinking about the clients total operation. Are you a cow fixer or a herd health veterinarian. There is a big difference.” — W. Mark Hilton

Wes Ishmael | May 25, 2013

Production medicine—melding animal health and veterinary care into animal production management—is beyond infancy, but it’s far from losing all its teeth.

“The concept of cow-calf production medicine is still relatively young and still evolving,” says Terry Engelken, DVM, a professor of production medicine at Iowa State University, focusing on the cow-calf and feedlot sectors. “It requires paradigm shifts on the part of the producer and the veterinarian. The producer has to come to the realization that their veterinarian has more to offer than just being a ‘cow mechanic’ and the veterinarian has to understand how to collect and analyze economically important factors that impact profitability.”

Though Dr. Engelken sees slow, steady growth over time, it seems acceptance and use of production medicine is scattered, more client-dependent than size-dependent.

In California, for instance, John Maas, DVM, Extension Veterinarian at the University of California-Davis says it’s a mixed bag. There are progressive practitioners working with progressive cow-calf producers to improve profit potential. There are also producers who view veterinarians as folks who douse emergencies, and veterinarians content to provide only those fire-engine practice kinds of services.

“It’s been one of those things you would think common sense and good business suggest we would have evolved to by now,” Dr. Maas says.

Figuring out the business model of providing production medicine services continues to stall some.

Russ Daly, DVM, Extension Veterinarian at South Dakota State University, believes producers recognize the value of veterinarians and the information they provide. He also knows veterinarians who want to provide production management service to clients. For the most part, though, he says, “In this state, I’m not sure that we’ve found a good way for veterinarians to capture that value, which works for the client as well.”

As for W. Mark Hilton, DVM, it’s impossible to think about production management without considering the animal health side of it and vice versa. Dr. Hilton is a clinical professor in food animal production medicine at Purdue University. He also founded and owns Midwest Beef Cattle Consultants, which many regard as a poster child for how to work with clients in partnership rather than a buyer and seller of specific services.

“Growing up, our veterinarian helped us. He fixed things, but he’d also show us something else that could help us,” Dr. Hilton says. “Production medicine is part of every-day veterinary medicine. As the veterinarian, you should always be thinking about the client’s total operation.”

Dr. Engelken concurs.

“I disagree with those who say that production medicine skills are separate from individual animal medicine, surgery, or palpation skills in a cow-calf practice,” Dr. Engelken says. “I think they are very intertwined in that unless you can exhibit a high level of competency in these areas, you probably won’t build enough trust with the producer to provide consulting services. These skills are also absolutely critical to being able to collect the baseline production numbers that you need to be able to provide consultative services to the client.”

“Are you a ‘cow fixer’ or a ‘herd health veterinarian’?” Dr. Hilton asks, “There is a big difference.”

Herd-Specific Data is the Foundation

For one, Dr. Engelken explains, “Record keeping and data analysis must come into play if you are ever going to get this type of service off the ground. You can’t benchmark performance if the appropriate numbers aren’t being recorded, and that first step can be a real challenge. You have to think about what output parameters you want to evaluate and then make sure you are getting those numbers captured. Then, it becomes a question of identifying the magnitude of losses and what areas the client needs help with. Are those losses associated with cattle disease, herd management, or a combination of both?”

“Production medicine is more of a mind-set of how you do things, and the most important thing that we can do is find the weak links in the production chain,” Dr. Hilton says. “We want to find the most important factors that are hindering a farm’s success.”

In that effort, Dr. Hilton encourages veterinarians to focus on four production goals: decrease production cost; increase the value of production sold; doing both of these with less labor; and maintain or enhance animal welfare.

“I’m a fan of individual cow records,” Dr. Hilton says. “Producers are surprised how consistent individual cow production is from year to year.” With records, clients can see that a cow weaning a calf 25 percent lighter than the herd average this year will likely produce one of similar caliber next year, and the year after. Dr. Engelken points out that the records portion of cow-calf enterprises is less standardized and more challenging to ferret out than in other sectors like feedlots, stocker operations, dairy and swine.

“Your opportunities to generate production or economic numbers are really driven by specific events that occur during the annual production cycle,” Dr. Engelken explains. “These events include calving, calf processing, going to grass, weaning, pregnancy check, etc. You aren’t typically generating input/output numbers on a daily basis like producers in other animal enterprises. These events may be separated by several months (start of breeding until preg-check) or they may occur over a relatively long period of time (the calving or breeding season), which makes data collection and interpretation more difficult. Secondly, in cow-calf practice, veterinarians are often the ones collecting the data since they will be the ones on the ranch as these production events occur. This data may take the form of reproductive information, calf performance numbers, and animal health performance.”

The next step is at least as essential.

Once this data is collected, the important thing is that it is economically relevant to the operation and that it is converted into information that the practitioner and client can use to identify problems and make corrective management decisions,” Dr. Engelken says. “I believe that’s when information has economic value to the producer. This value is improved over time as economically important management changes are continually identified, documented, and benchmarked.”

cattle feed additives

Areas Of Impact

Any area of production that drives a substantial amount of production output or input invites examination.

For Dr. Engelken, three key areas jump to mind: data based evaluation and the benchmarking of reproductive performance over time; nutritional management to control the cost of supplemental feed; herd health design and maintenance.

“Reproductive performance drives the bus on the income side of the equation and has to be closely monitored,”

Dr. Engelken says. “However, when you look at the differences in profitability between beef operations, you will find much more variation in input costs than you do in revenue generated. Since the largest component of cash costs deals with supplemental feeding, it is only natural that our profession should be involved in evaluation of the nutritional program and cattle feeding practices.”

Likewise, Dr. Hilton says, “Nutritional consulting has provided our clients with the best return on investment. Feed costs are up tremendously over the past five years and our herds that have kept feed cost from rising at the national average are doing much better financially than those that are average or above. I have heard from veterinarians who have saved clients $30,000 in feed cost versus what they would have fed. Even simple ideas like allowing cows only 4-6 hours daily access to hay can save a producer over 30 percent of his hay cost, according to Purdue research.”

As for design and maintenance of the herd health program, Dr. Engelken says, “We are constantly bombarded with new ‘miracle cures’ that come from a syringe, in the form of antibiotics, vaccines, or mineral supplements. I think the practitioner plays a key role in helping producers understand what they need, and maybe just as importantly, what they don’t need. This also requires that diagnostic information be collected from both live animals and necropsies so that disease patterns on the farm can be monitored and herd health programs changed as needed. This is still at the heart of veterinary medicine.”

“Every herd has strengths and weaknesses, but if health is one weakness, it’s nearly impossible to have any real strengths,” Dr. Hilton says. “Think of all the problems that may occur subsequently if calves get sick at a very young age—increased death loss, lower weaning weights and rates, increased sickness and decreased growth in the feedlot, less replacement heifers for the herd, etc. Health is surely a huge impact on the total herd.”

Wrap it all together and Dr. Engelken says, “In our case, we continue to be involved in nutritional management, ration analysis, electronic record keeping, and evaluating reproductive performance. We also spend a fair amount of time evaluating options for our clients and using partial budgets to play ‘what if’ games and look at alternatives.

“Providing impartial science-based information is part of our job. Just simply due to the huge impact that reproductive performance has on ranch profitability, I guess it’s inevitable that we continue to look at estrus synch options, bull selection parameters, and the potential uses of gene markers. Having said that, we still do the traditional things such as palpations and disease management.”

It’s Hard To Pigeonhole Client Interest

As mentioned at the outset, producers of a particular size or in a particular part of the world aren’t necessarily more or less likely to be interested in a production medicine relationship. But there are indicators.

Where he sees successful production medicine relationships, Dr. Maas says, “Number one, the ranchers are business people, no matter the size of the herd. They’re 110 percent vested in the cattle business for their income or they have come to ranching from another business. They understand inputs, outputs, shrink, all of the things that affect their bottom line.”

When Dr. Engelken was on faculty at Mississippi State University, he worked with folks in the agricultural economics department to survey beef producers in the state. The aim was trying to identify practices, demographics and characteristics that defined various levels of management.

“Obviously herd size made an impact. The larger the herd, the more time the producer devoted to herd management. These producers also utilized their veterinarian more often,” Dr. Engelken explains. “However, factors such as client age, education level, the number of extension meetings attended, serving as an officer for a cattlemen’s group and participation in seedstock production affected their level of herd management, as well as how they interacted with their veterinarian.

“That is a point that I try to drive into our students: If you want to come into contact with producers who would be willing to use consultation services, then you need to understand the characteristics of those producers. Our graduate veterinarians need to be involved with the local cattlemen’s groups, extension programs, as well as organized veterinary medicine. They need to be able to identify larger operations (especially seedstock) that are being operated by younger individuals who have an animal science or ag economics degree.

“Those are the producers who understand the impact that our profession can have on their bottom line. However, there are also smaller operations that want to do things the right way and will actively seek out this type of service, even though their cow herd is not their primary source of income.”

Conversely, Dr. Maas believes veterinarians willing to proactively forge new relationships and strengthen existing ones tend to have the most success providing consulting that goes beyond fixing problems.

“Clients call to ask questions. That’s the point at which veterinarians need to begin relationships,” Dr. Maas believes. “Maybe someone calls to ask about a particular vaccine. Also tell them how to handle it and how it should be administered. Ask them if they’re BQA certified.” Dr. Maas says.

“Then, figure out a way to follow up to see how they got along, at no cost to them. Maybe that leads to a chat about how they develop their heifers or what genetics they use and why,” Dr. Maas says. “Invest your time and energy into follow-up, so they understand that you’re the kind of veterinarian who is interested in their operation, not just someone who’s there when there’s an emergency or when they have a question.”

Some will grab the invitation immediately and do their part to establish the relationship. Others never will.

“Dedication to relationship is the important thing,” Dr. Maas says.

“The bottom line is that there may only be 15-20 percent of clients that will be willing to pay for a complete consultative type of program (nutritional management, record keeping, breeding season evaluation, economic analysis, etc.),” Dr. Engelken says. “But, they have been my best clients because without fail, they have all made me a better veterinarian.”

How You Go About It

“The key is to establish credibility and gain trust,” Dr. Hilton says. “The client has to trust the veterinarian to do what is right for the client’s business. That trust comes from time spent working together and having some successes along the way. If I can solve a client’s calf scours problem then I have earned some credibility. Once I have credibility I get asked more questions about the beef business. I want to be the ‘go to’ person in their beef business. Half the time they have a question, I won’t know the answer, but that’s not a deal breaker. I know the people who can help answer that question. They are already on my ‘team’ because I have asked them questions before.”

Likewise, Dr. Engelken says, “It takes time and trust. We work for a client base that tends to be very conservative and risk averse. They want to feel comfortable that you can treat a sick animal and have it get better, that you can handle a dystocia and end up with a live cow and calf, that you have accurate palpation skills, and understand the importance of reproduction to their bottom line.”

A common characteristic Dr. Maas notes in the practitioners involved in these kinds of relationships is their passion for sharing information.

“These veterinarians are educators. They love what they’re doing. They love to educate, to teach, and they don’t feel like they have to do everything themselves. They’re happy to share their knowledge and don’t feel like they have secrets to guard,” Dr. Maas says.

If you’re looking for a more specific game plan, Dr. Hilton suggests, “Go to the client who asks you the most questions. Tell him or her you want to make a deal. You want to do more production medicine and want their herd to serve as the pilot. You’ll charge less because you’re learning, too.”

Then, Dr. Hilton says, “Let’s look at the goals for your herd, identify something I can help you with in the next year, a problem I can solve or help prevent, something that will make your life easier.”

For example, maybe the client says winter feed costs have gotten out of control. Even if you don’t feel like you have the nutritional expertise to solve the problem, Dr. Hilton stresses you know folks who can.

At the same time, don’t sell yourself short.

“Some of our veterinarians have tremendous expertise in nutrition. Others are very savvy on added value marketing programs,” Dr. Daly says. “They might not realize they have enough expertise to provide advice to clients, but they probably do.”

Incidentally, Dr. Daly sees genomics as an area where there is currently a void of understanding that veterinarians could help clients bridge.

Getting Paid For What You Know

None of this works, of course, unless veterinarians are paid enough to make production medicine worth their while. As alluded to earlier, some folks feel uncomfortable charging for information they’ve likely given away in the past.

Plus, it can be difficult for producers to assign value to information when it seems to be everywhere for free.

“You can get information from your neighbor, from the Internet, from university extensions,” Daly says. “I try to impart to producers that local, farm-specific information is more valuable than information they can get anywhere else.”

One step Dr. Daly sees some veterinarians making in such a transition is charging clients by the hour rather than for providing a particular service.

That’s how Dr. Hilton has long charged clients.

Rather than be tempted to try selling a client another product or service, by charging hourly, Dr. Hilton says you can try to talk them out of buying things to save money and add value.

“You do not have to sell something to someone to make a living,” Dr. Hilton says. “You do not have to do a procedure on an animal. Our most valuable asset is our brain. You have to charge for your knowledge.”

“We could argue about the definition of consulting as it applies to a cow-calf practice,” Dr. Engelken says. “I guess maybe the simplest definition is getting paid for what you know. That payment could take several forms such as a per head fee, a retainer, an hourly consulting fee, or even enjoying a high degree of client loyalty because you offer a higher level of service than other veterinarians in the area.”

Of course, there are few buyers for anything that dampens rather than grows the bottom line.

Veterinarians Must Bring Value

“In consulting, the goal is to always give the client value for the money they spend. If I charge someone $1,000 for consulting and it saves him $5,000, that is a win-win. If I charge $6,000 for that same result it is win-lose and the client will never spend money with me on consulting again,” Dr. Hilton says.

“The way that we marketed our program is that we explained to the owners that, really, this program was free,” Dr. Hilton says. “If, for example, the program was going to cost $8 per cow, per year, to be on the records and consultation part of our program, we would show them how they could make at least $8 more per cow in increased income. Then we would also show them how we would be able to save them at least $8 per cow in reduced expenses. We guaranteed the program would be cost effective to the owners IF they gave us their short and long term goals AND they implemented the changes we suggested.”

The program Dr. Hilton is referring to is the Total Beef Herd Health Program (TBHHP). He began it in 1988 when he started Midwest Beef Cattle Consultants. The program cornerstones are herd health, records, fertility, environment, marketing, genetics and nutrition.

“We examine the herd from a total herd view and make recommendations based on financial return,” Dr. Hilton explains. “Common concerns of herds I have visited in the past include: inadequate herd fertility, cows that do not fit their environment, lack of hybrid vigor, pasture conditions that are not optimum for production, excessive calf morbidity, etc. Although we see recurring trends in herds, each herd is quite unique in its strengths and weaknesses.”

Back to the beginning of the program.

“After looking at financial figures, many times the first year on the program produced significantly more than twice the client’s investment. We had herds that increased revenue up to eight times what they paid us for one year of the program, so that was very exciting,” Dr. Hilton says. “If you want to be a hero with your clients, in addition to helping them decrease their cost of production and increase the value of their product, have them do both with less hours of work devoted to the enterprise. Tell me who else has these goals for the producer? The answer is no one.”

Dr. Hilton cites other examples of veterinarians bringing added value to clients:

  •  Vets host an annual calving clinic to remind clients about when to call for assistance(progress every hour), what supplies they should have on hand, and provide a review of techniques on how to assist in delivery.
  •  Clinics help clients precondition calves with a uniform health program, then sort them into uniform load lots so client calves command higher prices.
  •  Vets assist cow-calf owners in formulating rations, utilizing corn and soybean coproducts to stretch winter feed resources and save significant money on winter cow feeding.

One vet organized some of his very best client herds to sell bred replacement females. After pregnancy check, the secretary at the clinic records all data in a spreadsheet and provides this to producers looking for heifers. The spreadsheet gets updated throughout the fall and winter as heifers are sold and others are added to the for sale list.

“Recently, a beef producer had some calves for sale. Last year he received a horrible price, given the quality of the calves. He asked another producer where he sold his calves. That producer told him, ‘My vet lined up a couple of potential buyers for me and I got top dollar.’”

The producer who received the lousy price contacted the veterinarian. The veterinarian stopped by to see the calves and called two buyers. The producer received a price he felt his calves merited.

“The producer then called the veterinarian about his calf scours problem. Long story, short, the veterinarian proposed a very good solution to the scours problem, started asking about nutrition and will be formulating all of that producer’s rations now,” Dr. Hilton explains. “The same producer also wants to enroll his herd in the veterinarian’s records program. The veterinarian has become the ‘go to’ person for that producer’s beef herd.”

Dr. Hilton asks students the most effective way to have success with clients in the future. He tells them it’s having success with clients today.

“You have to provide value,” Dr. Hilton says. “It’s got to make money for them. I want to be an asset to the client, not a liability.”

Moreover, Dr. Hilton emphasizes clients must drive.

“Clients have to tell you what they want. You can’t tell them what to do,” Dr. Hilton says. He learned that lesson the hard way early in his career. “I give them recommendations, the owner makes the decision. If they want to keep a late-calving cow, for instance, that’s their business.”

“You really have to pick and choose your opportunities to start production medicine programming,” Dr. Engelken says. “Rarely do you institute this massive consulting type relationship at one time; at least that has not been my experience. It seems like I have been more successful in starting with an obvious weak point such as heifer development or an animal health issue and then working in the rest of the program over a number of years. Some herds are more willing to adopt this type of relationship faster than others, but it takes time to build that trust account with the client.”

Though none of this is necessarily quick or easy, Dr. Hilton emphasizes that’s it’s not complicated.

“Let people know what you can do. Do it. Follow up. Keep asking clients what their goals are and then help them reach them,” Dr. Hilton says. “Veterinarians need to be more proactive in asking clients what they need from them. Clients need to demand more from their veterinarians than fixing problems.”

BeefTalk: Let the Cow Save You Money and the Bull Make You Money

By : Kris Ringwall, Beef Specialist

NDSU Extension

A recent conversation regarding economic drivers in the cow-calf enterprise left me with a lot to think about.

Let me summarize: The thoroughfare to consumers begins with the conception and birth of a calf that slowly morphs into beef. The beef industry is huge, so reflecting is good as the calf moves from the cow-calf producer to other beef enterprises throughout the beef chain.

Much like the source of a mighty river, at some point, only melting snow or raindrops were present. Mighty rivers do not become majestic if the snow does not melt or the rain does not fall. Everything starts somewhere, albeit small, and needs to grow. The cow-calf industry is no different.

Let us consider some thoughts regarding the cow-calf enterprise. Generally, the cow-calf producer has had some cushion between total expenses and market price (positive cash flow). Expenses, however, loom on the horizon as historically high, and given the relative low rates of return on investment, along with the challenges of finding adequate labor, some cattle producers are giving up the reins.

What steps can producers take to improve probability and, ultimately, return on investment? Almost anybody can buy a cow and bull, and produce a calf, but that is not the definition of a cow-calf enterprise. The operation needs to have some scale, and I usually review data that involve operations of 50 or more cows. But today, even 100 cows probably are below the threshold of “economy of scale.”

I will be the first to state loudly that the cow-calf business has many economic drivers, and “economy of scale” does not have to be one of them. Why? Cow producers like cows and enjoy the lifestyle of raising beef. But a positive cash flow will put more smiles on the producers’ faces.

That being said, how do we do that? Here are some thoughts.

First, recognize the environment one is in and quit fighting it. Building to beat Mother Nature is futile; feed the cows, breed the cows and calve the cows when the weather is right.

The weather is right when cool-season grasses are growing actively. As a consequence of calving when the grass grows, a shift occurs when the third trimester of pregnancy starts, creating the opportunity for alternative winter forage programs.

At the Dickinson Research Extension Center, we turn bulls out on Aug. 1. The third trimester starts Feb. 12, and calving starts May 7. Winter feeds costs, which are 70-plus percent of the total cow-calf costs, have the potential to decline significantly, depending on the extent that “extensive winter forage” is utilized.

Second, recognize the importance of monitoring cow size. The maintenance of excessively large cows has proven difficult to offset with increased weaning weights. The center has targeted mature cow size at 1,100 to 1,300 pounds. Although individual calf weights will be lighter, total calf weight based on calves produced per acre will be greater, resulting in more total pounds of calf.

Third, recognize the importance of good bull selection using technological advancements that improve accuracy. Generally, keep expected progeny differences (EPDs) above the 50th percentile within the desired traits and breed. As matter of practicality, become comfortable with bulls that are above the 50th percentile but may not exceed the upper 30th percentile for commercial production.

Fourth, recognize the value of breeding systems, maximizing the traits of interest in the terminal sire program while balancing appropriate traits on the maternal side. Let the cow save you money and the bull make you money.

At the center, 1,100- to 1,300-pound cows bred to bulls above the 50th percentile for growth and marbling and in the upper 10th percentile for rib-eye area have an advantage of $26 per acre of ranchland over traditional cows. The calves are summered on forage, and after a short feedlot stay, they are harvested at an average weight of 1,450 pounds, with 94 percent at the “choice” grade at an average yield grade of 2.9.

The search for the next generation of cow-calf producers has a tremendous opportunity for success, provided some simple targeted goals based on real numbers are put in place. Efficient beef production starts when the bull mates with a cow and biological efficiency mates with economic efficiency.

And just like the majestic river that starts with a few raindrops and a small stream, beef production needs to start with the cow-calf producer. Fishing in the big river may catch some big fish, but do not let fishing tales run the operation.

For new cow-calf producers, the single biggest mistake made is the tendency to work hard physically and set aside the homework. Each cow-calf enterprise is a unique business, and businesses need records. Focus, listen and learn.

May you find all your ear tags.

7 Things to Start Being More Productive, Today

Working smarter, not harder, is the key to better results

When I was 17 years old, I used to work and study for about 20 hours a day. I went to school, did my homework during breaks and managed a not-for-profit organization at night. At that time, working long hours landed me countless national campaigns, opportunities to work with A-list organizations and a successful career. As I got older, I started to think differently. I realized that working more is not always the right, or only, path to success.

Sometimes, working less can actually produce better results.
Consider a small business owner who works nonstop. Working hard won’t help him compete with his corporate competitors. That’s because time is a limited commodity. An entrepreneur could work 24 hours a day, 7 days a week, but his or her competitor can always spend more money, assemble a team and spend a lot more collective man hours on the same project. Then why have small startups accomplished things that some larger corporations couldn’t? Facebook bought Instagram, a company with 13 employees at the time, for one billion dollars. Snapchat, a startup with 30 employees, was turning down offers from Facebook and Google. Part of each of their successes was based on luck, and some on efficiency.

The key to success is not working hard. It’s working smart.
There’s a notable distinction between being busy and being productive. Being busy doesn’t always necessarily mean you’re being productive. Despite what some might believe, being productive is less about time management and more on managing your energy. It’s the business of life. It’s learning how to spend the least amount of energy to get the most benefits. I personally learned how to reduce my work week from 80 hours to 40 hours, and get a lot more work done in the process. For me, less is more.

Here are seven things I stopped doing to become more productive.

1. Stop working overtime and increase your productivity instead.

Have you ever wondered where the five-day, 40-hour work week came from? In 1926, Henry Ford, American industrialist and founder of Ford Motor Company, conducted an experiment with his own staff:

He decreased their daily hours from 10 to 8, and shortened the work week from 6 days to 5. As a result, he saw his workers’ productivity increase.

The more you work, the less effective and productive you become over both the short and long term, states a 1980 report from The Business Roundtable titled “Scheduled Overtime Effect on Construction Projects.”

Source: Calculating Loss of Productivity Due to Overtime Using Published Charts — Fact or Fiction

“Where a work schedule of 60 or more hours per week is continued longer than about two months, the cumulative effect of decreased productivity will cause a delay in the completion date beyond that which could have been realized with the same crew size on a 40-hour week.”
Source: Calculating Loss of Productivity Due to Overtime Using Published Charts — Fact or Fiction

In an article for AlterNet, editor Sara Robinson referenced research conducted by the US military which revealed that “losing just one hour of sleep per night for a week will cause a level of cognitive degradation equivalent to a .10 blood alcohol level.” You can get fired for coming to work drunk, but it’s acceptable to pull an all-nighter.

Irrespective of how well you were able to get on with your day after that most recent night without sleep, it is unlikely that you felt especially upbeat and joyous about the world. Your more-negative-than-usual perspective will have resulted from a generalized low mood, which is a normal consequence of being overtired. More important than just the mood, this mind-set is often accompanied by decreases in willingness to think and act proactively, control impulses, feel positive about yourself, empathize with others, and generally use emotional intelligence.
Source: The Secret World of Sleep: The Surprising Science of the Mind at Rest

It’s important for us not to overwork ourselves and get enough sleep to maintain a high level of productivity. Next time you’re wondering why you may not be working productively, the reason may be simple as you being deprived of adequate sleep. (James Maas, a sleep researcher and expert, revealed that at least seven out of every 10 Americans don’t get enough sleep.)

  • Did you know?
  • Leonardo da Vinci took multiple naps a day and slept less at night.
  • The French emperor Napoleon was not shy about taking naps. He indulged daily.
  • Though Thomas Edison was embarrassed about his napping habit, he also practiced this ritual on a daily basis.
  • Eleanor Roosevelt, the wife of President Franklin D. Roosevelt, used to boost her energy before speaking engagements by napping.
  • Gene Autry, “the Singing Cowboy,” routinely took naps in his dressing room between performances.
  • President John F. Kennedy ate his lunch in bed and then settled in for a nap—every day!
  • Oil industrialist and philanthropist John D. Rockefeller napped every afternoon in his office.
  • Winston Churchill’s afternoon nap was a non-negotiable. He believed it helped him get twice as much done each day.
  • President Lyndon B. Johnson took a nap every afternoon at 3:30 p.m. in order to break his day up into “two shifts.”
  • Though he was criticized for it, President Ronald Reagan famously took naps as well.

Source: 5 Reasons Why You Should Take a Nap Every Day — Michael Hyatt

On a personal note, since I started getting at least 7 to 8 hours of sleep each night, I’ve noticed a change: I became a lot more productive and got a lot more work done in comparison to when I worked 16 hours a day. Who knew sleeping was such a great tool for marketers?

2. Don’t say “yes” too often

According to the Pareto principle, 20 percent of the effort produces 80 percent of the results; however, 20 percent of the results consumes 80 percent of the effort. Instead of working harder, we should focus primarily on the efforts that produce the majority of the results and forgo the rest. That way, we have more time to focus on the most important tasks. Stop saying “yes” to tasks that yield little or no result.

“The difference between successful people and very successful people is that very successful people say “no” to almost everything.”
— Warren Buffett

So what should you say “yes” to? And when should you say “no”? If you can’t figure out if something is going to be worth your time, consider running a simple split test. Consider tracking everything you do, and the time it takes to complete each task, and the results. Then go back, assess your list to see what did (or didn’t) prove fruitful, and take your findings into consideration to optimize for future tasks.

Most of us say yes more often than we should, for a variety of reasons, including guilt and overstretching ourselves, but also because it is so much easier than saying no. Nobody wants to be the bad guy.


In a 2012 study published in the Journal of Consumer Research, researchers split 120 students in two groups. One group was trained to use the phrase “I can’t” when discussing the specific choices, while the other was trained to use “I don’t” in framing their decisions.

The students who told themselves “I can’t eat X” chose to eat the chocolate candy bar 61% of the time. Meanwhile, the students who told themselves “I don’t eat X” chose to eat the chocolate candy bars only 36% of the time. This simple change in terminology significantly improved the odds that each person would make a more healthy food choice.

Next time you need to avoid saying yes, use “I don’t” in your refusal, to reinforce the helpful behavior of saying no to things that aren’t worth it.

Another great trick is to avoid activities that don’t add enough value to your life is the 20-second rule: For activities you shouldn’t be engaging in, or negative habits you want to break, add an element of difficulty, adding on a 20-second roadblock, so to speak, to you starting that activity. For example, if you’re trying to use lessen your use of social media, delete the tempting apps from your phone, so that it takes you another 20 seconds to find your laptop to access them. By adding in an inconvenience, you’ll be less likely to engage with that draining activity or habit.

Lower the activation energy for habits you want to adopt and raise it for habits you want to avoid. The more we can lower or even eliminate the activation energy for our desired actions, the more we enhance our ability to jump-start positive change.
Source: The Happiness Advantage: The Seven Principles of Positive Psychology That Fuel Success and Performance at Work

3. Stop doing everything yourself and start letting people help you

At some point in my career, I was managing a very large community and couldn’t handle it all myself. I burnt out, and the community ended up taking over and managing itself. Surprisingly, members did a better job than I could have ever done on my own. I learned the power of community and why brands need user-generated content.

Consumers understand what they want and how they want it better than any marketer does. Did you know that, according to Octoly, user-generated videos are viewed 10 times more than brand-generated videos on YouTube? When seeking information about a particular brand, over half (51 percent) of Americans trust user-generated content more than what’s on the brand’s official website (16 percent) or media coverage on the brand (14 percent). It’s important for marketers to open up and seek help from the brand’s community itself.


Source: Earned Media Rankings on YouTube — Octoly
Being a great content marketer is not about creating the best content, but building a great community that will generate high-quality content for you.

 

It’s important for us to realize we can seek help when we need it. Sometimes it’s impossible to do everything ourselves. It‘s better to let someone, or a team, share the work, giving you more time to focus on the most important tasks. Instead of wasting time and energy overloading yourself or trying to do it alone, let others share the burden and help.

Often times, even if your friends or coworkers can’t help you, simply having them around can help you become more productive.

Just having friends nearby can push you toward productivity. “There’s a concept in ADHD treatment called the ‘body double,’ ” says David Nowell, Ph.D., a clinical neuropsychologist from Worcester, Massachusetts. “Distractible people get more done when there is someone else there, even if he isn’t coaching or assisting them.” If you’re facing a task that is dull or difficult, such as cleaning out your closets or pulling together your receipts for tax time, get a friend to be your body double.
Source: Friendfluence: The Surprising Ways Friends Make Us Who We Are

4. Stop being a perfectionist

“We found that perfectionism trips up professors on the way to research productivity. The more perfectionistic the professor, the less productive they are,” Dr. Simon Sherry, a psychology professor at Dalhousie University who conducted a study on perfectionism and productivity, told University Affairs. Dr. Sherry found a robust correlation between increased perfectionism and decreased productivity.

Here are some problems associated with being a perfectionist:

  • They spend more time than required on a task.
  • They procrastinate and wait for the perfect moment. In business, if it is the perfect moment, you are too late.
  • They miss the big picture while focusing too much on the small things.
  • Marketers often wait for the perfect moment. In doing so, they end up missing it.

The perfect moment is NOW.

5. Stop doing repetitive tasks and start automating.

According to a research study conducted by Tethys Solutions, a team of five people who spent 3 percent, 20 percent, 25 percent, 30 percent and 70 percent of their time on repetitive tasks, respectively, reduced their time spent to 3 percent, 10 percent, 15 percent, 15 percent and 10 percent after two months of working to enhance their productivity.


Source: Using Automation Software To Increase Business Productivity & Competitiveness -Tethys Solutions
A week ago, I spent 15 minutes writing a basic Python program. The idea was to generate content from the data, which I pulled from Twitter API using a Ruby bot, and then using Hootsuite to bulk schedule the content. While this task used to take me an entire day to accomplish, it now takes me less than five minutes thanks to automation. Nowadays, whenever I find that I’ve done something more than five times, I ask myself if I can find a program to automate it for me.

You don’t have to be able to code to automate your repetitive tasks. It’s nice to have the skills or the resources, but it’s not a requirement. If you cannot build it, buy it.

People often forget that time is money. People usually do things manually because it’s easy and requires almost no research. It’s manageable to moderate 30 images on Instagram for your user-generated campaign. But if you have to manage 30,000 photos and videos from five different platforms, you need a good digital asset management software. At Filemobile, we help people solve that problem and generate even more user-generated content. Just like managing rich media, you can easily purchase a software to solve almost all of your problems on the internet.

If you still can’t find a solution, you can hire an expert to help you. Keep in mind that you need to spend money to make money and that time is your most valuable commodity.

Tips for marketers: check out GitHub or Google Apps Script library. Often times, you’ll find free, ready-to-use open source code that requires very little programming knowledge.

6. Stop guessing and start backing up your decisions with data

If you can optimize websites for search engines, you can optimize your life to grow and reach your maximum potential.

There are countless research studies that can offer insight on optimizing your productivity. For instance, did you know that most people are more easily distracted between noon to 4 p.m.? This was the conclusion that came from research shared by Robert Matchock, an associate professor of psychology at Pennsylvania State University. But even if you can’t find data on a particular question you might have, it doesn’t take a lot of time to run a simple split test and examine your own results.

7. Stop working, and take some time to do nothing at all.

Most people don’t realize that when we are too focused on something, we’re essentially locking ourselves in a box which can end up being counterproductive to our work or the results we’re chasing. It’s important to walk away from work once in a while and have some alone time, which is good for the brain and spirit, according to “The Power of Lonely,” from The Boston Globe.

One ongoing Harvard study indicates that people form more lasting and accurate memories if they believe they’re experiencing something alone. Another indicates that a certain amount of solitude can make a person more capable of empathy towards others. And while no one would dispute that too much isolation early in life can be unhealthy, a certain amount of solitude has been shown to help teenagers improve their moods and earn good grades in school.
Source: The Power of Lonely

It‘s important to take time for reflection. We often find the solutions we’re looking for when we’re not actively searching for them.

It’s also important to understand that we don’t become more productive overnight. Like everything in life, it requires effort and practice. Change doesn’t happen just by sitting around and waiting for it. Instead, take the time to learn more about your body and find actionable ways to optimize your energy and time for a more successful and happier life.

Disclosure: Filemobile (acquired by NewZulu) is a former client of my agency, ThinkRenegade.

Go to the profile of CamMi Pham
WRITTEN BY
CamMi Pham
Unlearner | Marketer |Partner @ Growth + eCommerce Marketing Agency @ThinkRenegade| Write http://www.cammipham.com cammi@themgmt.agency

Depreciation – Take a close look…

Quoted from Pharro Cattle Company…

I’m not a depreciation expert either.  However, I AM a recovering ag banker and have dealt with depreciation in one form or another for 20 years.

Steve, you are correct when it comes to “tax” depreciation, which is what most farmers think of when they hear the word depreciation.  You need to have purchased a depreciable asset in order to claim the depreciation.  A raised heifer that peaked in value as a second-calf cow at, say, $3,000 and is now worth only $1200 as a butcher cow has generated no depreciation for income tax purposes.

That’s not to say she didn’t cost you that money.  As Charlie correctly points out, selling animals at or near their peak value is a great way to avoid “real world” depreciation, which is the loss of value as an asset ages or is used up.  And as he says, that number is not given a great deal of thought by many producers today.

Accrual accounting is a wonderful tool for cutting through the mess that is often caused by accountants and producers looking to limit tax liability.  It can be complicated and requires that a producer be honest with himself, which is not always the easiest thing to do.  But it can also create some good surprises.

I used accrual accounting exclusively when I was a banker.  While I learned this method at Farm Credit training school, I was surprised that very few bankers did this in the real world, because it takes digging pretty deep in a balance sheet as well as a tax return.  I soon discovered that even bank examiners didn’t have a firm grasp on the concept, which pretty much allowed me to BS my way through many exams!

If you do a good job filling out a financial statement on the same day each year (January 1st works great for those of use who are on the typical year tax cycle) and you are honest with yourself about the value of all your assets, including hay on hand, prepaid expenses, stockpiled forages, and capital assets, you can identify good and bad trends in your business long before your neighbors, no matter what the Schedule F says.

Consider this example:

Rancher A has a five year average Schedule F profit of $100,000, with tax depreciation of $50,000 a year.  He has a herd of 200 cows that he bought five years ago and annually bought enough bred heifers to replace his open cows.  He has a full line of newer machinery that he spends $50,000 a year on between payments and updates.

His “real world” depreciation is probably somewhere around $70,000 to $90,000 a year.  $50,000 of that is due to equipment depreciation, and his cow herd is dropping at a rate of $100-$200/cow/year due to aging.  To handle that depreciation, he has $150,000 in profits (Schedule F plus the depreciation), so he’s left with something in the neighborhood of $60,000 to $80,000 to feed his family and grow his business.

Rancher B has a five year average Schedule F profit of $150,000, with tax depreciation of $0 a year.  His herd of 200 cows was raised, and he has a full pipeline of heifers each year.  Rather than selling steers and heifers, he sells steers, a handful of open cows, and a large number of 4 and 5 year old bred cows.  His equipment line is smaller, older, and depreciated out.  He doesn’t even use most of it.

On an accrual basis, we can see that rancher B has no real depreciation, and actually has APPRECIATION.  His cow herd maintains its value year after year because it is not aging, and as cattle prices have increased over the last five years his average animal is worth $500/head more than it was 5 years ago.  This averages out to an gain of $100/head/year, or $20,000 for him.  This, added to his income, gives him $170,000 to feed his family and grow his business.

Driving by these two operations, one would be fairly certain Rancher A is better off.  He has nice equipment, after all.  Digging deeper, you can see that he is barely feeding his family, while Rancher B is poised to grow his business.  Granted, this is a pretty simplistic example, but I can assure you that accrual adjustments make a world of difference for many operations.

What Does Size Matter?

Cow and calf sizes: A lesson in basic cow economics….

A big question for many cattle producers is how to make their operation more profitable.

“Cow-calf producers tend to operate on a fixed land/feed base associated with a substantial overhead cost in annual rents and finance payments,” says John Dhuyvetter, North Dakota State University (NDSU) Extension livestock systems specialist at the North Central Research Extension Center near Minot.

Key profitability drivers are the production of as many pounds of calf as possible to sell off the resource (land/feed) and capturing favorable market prices, he notes. Factors that contribute to the pounds produced are the calf crop percentage (low calf losses equate to more calves to sell), cow longevity (lower heifer retention equals more producing cows), calf weights (which are a function of genetics, age, and nutrition), and stocking rate.

For the operation to be sustainable, the forage resource is limited in pounds and the animals it can support. Opportunities are available to enhance production through grazing systems and management that improves soil and moisture retention.

However, while simply overstocking and overutilization may improve output in the short term, they likely will diminish output through time. On a fully utilized land/feed resource, even selecting cows for added calf growth and weaning weights likely will not improve profitability.

“From a feed equivalency standpoint, differing numbers of cows of varied sizes weaning calves of different sizes generate the same market weight,” Dhuyvetter says.

For example, 88 frame score 4 cows each weighing 1,200 pounds and weaning 550-pound steer calves at seven months have roughly the same feed need and generate the same market weight as 75 frame score 7 cows each weighing 1,500 pounds and weaning 650-pound steer calves. The feed needs are similar for 83 frame score 5 cows each weighing 1,300 pounds and weaning 585-pound steer calves, and 79 frame score 6 cows each weighing 1,400 pounds and weaning 620-pound steer calves. With selection for higher milk production, which may increase weaning weight, stocking rates will be reduced further.

“If reproduction, calving loss, culling rate, and market price are the same, there is no advantage to any size group,” Dhuyvetter says.

“If, however, there is some adaption advantage, as seen in maintaining body condition, leading to better breed-back and calf survival, by some type or size group, an economic efficiency exists. Similarly, if the market discounts prices for some weight/size combination, that group will be economically disadvantaged.”

The market generally slides prices, paying more per pound for lighter calves; however, this may not reflect true value differences for some heavier calves capable of greater feeding efficiency and carcass value, he notes. That being the case, somewhat smaller calves appear to be favored until calf prices become discounted.

Along with the consideration of cow and feeder calf size is the potential value of the terminal crossing of larger sires with moderately smaller cows to maintain high cow numbers capable of producing greater weaning weight of greater market preference. An example is mating bulls with acceptable calving ease scores and a frame score of 6 to frame score 4 cows and providing supplemental feed (creep) if necessary to add growth.

“Decades of selection for greater growth and size have been associated with improved efficiencies in the feedlot and packing sectors,” Dhuyvetter says.

“It also has resulted in larger, more productive cow types on the ranch, which may or may not be more efficient.

“Cow requirements need to be matched to and met by ranch resources to avoid costly excessive inputs,” he adds.

“It’s about achieving lots of weight to sell at favorable prices from a herd of cows of moderate size that are capable of producing a high calf crop percentage with minimal culling.” — NDSU Extension

 

Consider the Future

Consider the Future

Have you noticed that the most successful and happy people throughout history have been those who made decisions that were based on the future?   It’s true!   Successful people know that nothing stays the same.   The present is different from the past – and the future will be different from the present.   Those who make decisions that are based on the future will always have a HUGE competitive advantage over those who continue to make decisions based on the past and/or the present.

Unfortunately, nearly all people from all walks of life are afraid to make decisions that are based on anything but the past or the present.   It has always been this way, and it will probably always be this way.   Even though they can see things transforming before their very eyes, they are reluctant to make any changes in what they are doing.   It’s as though they would rather fail doing what they have always done than succeed if success requires change.   That is a shame – but it gives you the opportunity to move your family and your family’s business to a very sought-after position.

Based on what you think about the future, what kind of management decisions should you be making in your cow-calf operation?   I’m not going to tell you what I think.   I want you to do your own thinking.   You may come up with something different and/or better than what I have.   The decisions you come up with, however, need to be based on what you think the future holds.   Be bold in your actions.   Those who are slow to take the appropriate actions may lose all they have – forcing their kids and grandkids to get jobs in town.