Meet the 2030 agricultural CEO

American farms and ranches, which now number under 2 million, are operating in an economic environment characterized by chaotic extremes. This creates both challenges and opportunities requiring a high level of management skill. 

Some operations are specialized single enterprises, such as grain, row crops, specialty crops, or large-scale livestock businesses. These businesses are often export-dependent, where lowest global breakeven levels determine sustainable success.

Others are more diversified, with a mix of crops, livestock, and value-added businesses. These operations, often close to consumer trends, tend to generate a positive bottom line regardless of size, tenure, or the complexity of the agricultural business model. 

In either case, the owners, managers, and CEOs of today’s agricultural businesses will need skill sets far different from those of previous generations. The “trifecta” or the power of three, will be the game changer, often defining positive outcomes in both business and life.

Consider some sports analogies where the number three plays a pivotal role. Babe Ruth, who wore number three, is arguably the greatest baseball player of all time and even recorded a rare triple play. In football, a three-point field goal can determine a championship. In basketball, Stephen Curry’s three-point shot has transformed the game at all levels.

In agriculture, the trifecta, an integrated skill set of Business IQ (Management Mindset), EQ (Emotional Intelligence), and AQ (Adaptability), will be critical for success. 

Business IQ (Management Mindset)

The first component of the agriculture trifecta is Business IQ or Management Mindset. 

The four pillars of Business IQ are imperative in a rapidly changing and evolving agricultural industry. At the top of the list is production excellence, emphasizing efficiency and competitive economic margins.

Next is cost management, with close attention to agricultural budgets that are monitored for continuous improvement. The third pillar is a wide array of risk management programs, interspersed with proactive marketing strategies that capitalize on profit windows and mitigate losses when cycles and markets present headwinds. This has assisted the agricultural industry to circumvent a repeat of the 1980s farm crisis.

The final pillar is capital and human resource efficiency. Carefully scrutinizing machinery, equipment, facilities, and the productivity of rented and owned land is an ongoing process. Evaluating the human element, from employees to management, is essential when positioning the business for a sustainable bottom line.

EQ (Emotional Intelligence)

The next component of the trifecta is emotional intelligence (EQ), which has been rapidly emerging as younger farmers and ranchers enter the industry. Historically, farmers and ranchers were independent and often preferred not to deal with people. Now and in the future, interdependence through collaboration with others is quickly emerging.

Successful businesses assemble productive teams by focusing on the three “A”s: hire for attitude, train for aptitude, and hold people accountable, especially family members and friends. Ongoing proactive education is critical to staying abreast of innovation and developing the human skills necessary for a productive and profitable business.

Next, and most important, is assembling a team that combines warriors and worriers. The warriors push the envelope with new methods and ideas. The worriers, on the other hand, provide checks and balances, bringing processes and critical thinking to ensure both short- and long-term goals are achieved.

AQ (Adaptability Quotient)

Third, a difference maker that is quickly evolving in an economy full of twists and turns, is business AQ focusing on adaptability and performing when conditions are not ideal or when the business and economic cycle shifts in your favor. More specifically, AQ is the ability to assess, adapt, and, most importantly, be held accountable for strategies and actions. 

A high AQ business will develop alternatives, i.e., plans A, B, C, and D, and, in some instances, a clearly defined exit plan if performance is not up to standards. An AQ-driven business will often follow the “fail fast principle,” responding to failures quickly and, more importantly, avoiding repetition of the same mistakes. AQ is especially critical when a business is in transition or requires adjustments for growth.

An apprenticeship culture that integrates the next generation, whether family members or individuals from outside the family, into the existing business culture is also very important. What separates a high AQ business is its proactive adaptability to changing technology, policy, and markets. Innovation and resilience during downturns, when adversity arises from price, cost, weather, and market changes, are key variables. Agility and nimbleness when opportunity knocks are also defining attributes.

Integration: Where the magic happens 

Elite owners and managers combine all three dimensions of IQ, EQ, and AQ to form the trifecta, which is the game changer in building legacies and champions. Whether in sports or agricultural businesses, success is defined by this integration.

Dr. David Kohl is an academic hall-of-famer in the College of Agriculture and Life Sciences at Virginia Tech in Blacksburg, Va. Dr. Kohl is a sought-after educator of lenders, producers and stakeholders with his keen insight into the agriculture industry gained through extensive travel, research and involvement in ag businesses.  This content was provided by AgWest Farm Credit.