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Erven: Leadership is vital to operate farm business
Associate Editor

PHOENIX, Ariz. — No team, organization or family farm business will survive without effective leadership according to Bernie Erven, professor emeritus at the Ohio State University, during his presentation on Leading the family farm business at the American Farm Bureau Federation’s Young Farmer and Rancher Conference on Feb. 10.

“Leadership is very important to any business, this is not a minor detail,” said Erven. “If you don’t have goals, you can’t be a leader. Mission equals vision, goals are essential.”
Erven said that in order to understand how to be an effective leader, one must understand the three basic functions of management: planning, organizing and leading.

Essentially, planning involves determining goals and the means for achieving them. Levels of planning include forming a mission statement, strategic goals, tactical and operational goals. The next basic function of management – organizing entails allocating an organization’s resources to achieve strategic goals. Key concepts in organization include authority, responsibility, delegation and centralization and decentralization.

“Basically, develop goals and strategy and then organize,” said Erven.

Leading means influencing people toward the attainment of an organization’s goals. “The bottom line is leadership cannot replace management, it should be in addition to management,” he said.
Also, Erven added that despite a farm’s size, planning, organizing and leading remain basically the same regardless of business size. But what does change as the size of business increases is: complexity, number of middle managers, urgency to be flexible and the harmony between family and business. “There must be respect for the older generations and that respect comes with understanding. With understanding, you will begin to get a sense for work and job roles,” said Erven.

In terms of guidelines for leaders, Erven said that farm managers need to learn to adapt their planning, organizing and leading to the family business environment. 

“The emphasis here is on adaptability, be creative, find ways to do things differently,” he said. “In addition, it’s important to learn to delegate and trust, you absolutely cannot lead without delegation. Old tradition says that by delegating that makes you a weak leader. The fact is it’s harder to delegate as a leader than it is to not.”

Erven offered general guidelines in operating a successful family farm business such as: insisting that communication become a strength of each manager, encourage each family member to accept responsibility for success, make tough decisions sooner rather than later, make happy children the goal of parenting, separate family places from business places (ie. not in mom’s kitchen) and assure that each family member in the business has opportunity for some privacy.

Additionally, Erven provided some planning guidelines for leaders including: guiding the business with a mission and strategic goals embraced by each senior manager, put mission and strategic goals in writing, make planning “business-like” rather than emotional, make the business profitable or tackle unprofitability and plan for management succession years in advance of the expected transition.

“If you can’t show me on paper why we should invest, then why should we do this. Make it a business decision, rather than an emotional one,” he emphasized.

Guidelines to improve organization include developing a clear organizational structure that is widely understood, capture the organizational structure in an organization chart, support the organizational structure with a job description for each person, keep the organization chart current with at least annual feedback to each person and discussion of needed adjustments and bring non-family members into the business to meet critical needs.

Guidelines for leading include building a positive organizational culture that guides people in the business, make organizational culture consistent with mission and goals, insist on effective family business meetings, help people understand the differences in their roles, manage conflict rather than trying to avoid it and train people to be experts in handling their duties.

To conclude his presentation, Erven reminded the group of young farmers from across the country, that despite the type of business the same management basics are the same and that unique characteristics of each business and family need to be understood and taken into consideration.

“If you’re going to take on the world, take on the world and your business creatively, said Erven. “You will only be as good of a manager as you decide to be.”