Rodney Johnson - Without Warning

Over the past week, I’ve been playing farmer. Actually that connotation seems quite appropriate in today’s agrinomic landscape of 4-wheel drive tractors, triple stack genetics, and behemoth farms. Yes, it is quite different than when I was growing up in Northern Illinois during my youth. A lot has changed and continues to change.

During my brief stay, I was navigating equipment that wasn’t quite primetime. Despite long hours following a line etched into the dirt, I find its always a wonderful time of mindless wondering. It does give a person time to think. I started to think of the many parallels between farming and business. Here are few things that surfaced - and which actually made sense.

1. Predictability: Farmers every year start the year with many unknowns, especially weather. Rain or drought. Hot or cold. Late spring or maybe an early frost. Everything evolves and revolves around that little thing referred to as weather. To prepare, farmers must be ready and able to adapt and change their plans on the go - taking what mother nature gives them and then figuring out how to leverage whatever they’re given to their advantage. Business Lesson: Every business is exposed to factors outside of their control - be prepared and ready to deal with them by adapting on the go.
2. Relations and Inputs: Most farmers value and leverage the relations and knowledge of their suppliers and consultants. These are the individuals that help keep their production costs low and maximize their outputs/revenues. Variabilities across the enterprise such as soil type, location (growing degree days that can be expected), climate are considered. And of course, geographical connections to buyers, whether that be an elevator down the road, an ethonol plant 50miles away, or a niche market. Business Lesson: A business should never become an island unto itself - leverage your internal and external resources to your advantage.
3. Wandering Around & Scouting: Once the crops are in, farmers tend to be vigilant about wandering around in thieir fields and scouting their crops. They might be checking how the crop is growing, but also on the lookout for pests (bugs), disease and weeds that might might be impacting the field. Once a threat is identified, an assessment is completed - a recommendation is made. This might involve a treatment regiment, or just further assessment. At all times,  a cost - benefit analysis is made. Business Lesson: Wandering around and scouting is highly important in agriculture and in business. This is where a business learns what is really going on, and what can be improved.

These are just a few of the learnings while spending some mindless time clouded by dust and noise.

What other parallels can you think of?

In the last Blog titled Second Chance Points, I present how great companies are given “second chances” if and when they mess up.  I state,

“when you’re given a second chance, you have the luxury of being able to learn from your mistakes. When you aren’t offered a second chance, you die by your mistakes. This is why companies must fight their way to earn the right to be given a second chance”

If I work with a business, a considerable amount of time and “management think” is devoted to positioning the team for second chance points. It is what many people might refer to as “staying power.” Now a second, an equally important part of the equation. This is turnovers and points following a turnover. In basketball, great defensive teams position themselves to create turnovers, and subsequently score off turnovers. An equally important phenomenon occurs in business. Adam Hartung over at The Phoenix Principal puts it this way.

“I want you to dramatically cut the time you talk to and listen to customers - and invest that investigating competitors… We need to spend a LOT MORE time focused on competition - figuring out how to ruin their day while developing fringe opportunities that change the marketplace and drive growth!”

Adam Hartung is talking about the importance of and how a team can position themselves to create turnovers and score points off them. When we understand our competitors and their customers, we intimately know where they’re vulnerable and how to create turnovers. A turnover could be:

• Securing a new account when a competitor fails to deliver.
• Hiring a disgruntled employee from a competitor that fufills a needed skill set.
• Offering a complete solution to a marketplace that had been previously filled with products.

Why are Second Chance Points and Points off Turnovers such an important concept to understand?

Momentum!

Now back to our basketball analogy. Clark Kellogg in his commentary from the NCAA March Madness tournament noted that when teams had a positive (relative to their competitor) score from second chance points and points off turnovers that they are more likely to win the game. Not surprisingly, a similar scenario happens in the business world every day. Companies that receive second chance points and score points following turnovers are more likely to grow and prosper. Companies achieve this by leveraging the talents of their organization and exploiting their competitors weaknesses. When this occurs, a dynamic shift in the marketplace begins to occur. Slowly at first but over time the extra points begin to add up.

This is why second chance points and points off turnovers are important in basketball and business.

Rationalization. We see it every day. Some are more explicit and compelling than others. And when we see it or hear it, we should take a quick look at the BS meter, and see how high did the needle actually go. A quote from the 1983 movie, The Big Chill sets context and bar for rationalization. The dialogue between Michael and Sam goes:

Michael: I don’t know anyone who could get through the day without two or three juicy rationalizations. They’re more important than sex.
Sam Weber: Ah, come on. Nothing’s more important than sex.
Michael: Oh yeah? Ever gone a week without a rationalization?

Well, rationalization is utilized dail by some of the most significant and important players in the nation, and by you an me. It was utilized as part of the health care debate. It was utilized in the bailing out of the banks. And it will be utilized in the courtrooms. For instance, the CEO of Lehman Brothers, Dick Fuld is taking such a stance. This is from the Valukas Report, a 2200 page document attempting to uncover the truth about Lehman’s demise.

Valukas deems Richard Fuld (Lehman chairman and chief executive officer) “at least grossly negligent” in his role overseeing Lehman.  Fuld’s lawyer said my client “did not know what those transactions were — he didn’t structure or negotiate them, nor was he aware of their accounting treatment.”   Although elsewhere in the report there is discussion of  emails Fuld received with documents concerning the transactions,  Fuld’s attorney came up with what will be the #1 excuse for all CEOs going forward:  Fuld “did not use a computer” and “he cannot open attachments on his BlackBerry”. 

Rationalization at times is the ultimate defense. It explains nothing and it explains everything. As Tom Foster states, “Sometimes the explanation for the problem tells you more about the explainer that it does about the problem.”

And here, Rationalization often is King.