Managing the Ranch as a Business: Strategic Planning

By Dr Jimmy T (Gunny) LaBaume

Making Decisions Effectively 

There is a difference between efficiency and effectiveness. As my old mentor, Stan Parsons used to say: Efficient managers “do things right.” Effective managers “do the right thing.”  

Holistic Management: A New Framework for Decision MakingRange managers talk a great deal about range but very little about management. On the other side of the fence, ranchers all too often confuse “management” with “husbandry.” They are not the same thing. “Husbandry” is gathering the herd, feeding, doctoring, branding, de-horning, etc. But the skill that it took to gather all those resources (men, horses, corrals, etc) and have them at the right place at the right time is “management.”  

Some believe that “management” consists of meeting everybody at the back door at 6:00 o’clock in the morning, telling them what to do, and then spending the rest of the day making sure they get it done. NOT! This direction and supervision role is only one part of the process.   

Management is a never ending, circular, common sense process. First you plan (and assume that your plan is wrong because it probably is). Then you implement (here is where the direction and supervision activities enter the picture). Then you monitor which provides the basis for control. Finally, based upon the results of monitoring, you close the circle of management by re-planning. And the process is continuous.  

Planning Levels 

At the onset, management begins with a plan. There are at least two levels of planning—tactical (what lieutenants and cow bosses do) and strategic (what generals and boards of directors do). The former deals mainly with day to day operations whereas the latter is, of course, more general, longer term and more visionary. This is the level I wish to discuss today because it is the most important thing we do. You can do any of the other things we recommend half-heartedly but you must get this one right.     

Strategic Planning 

Strategic planning should begin with a definition of the entity to be managed. The people who are to manage it are identified as are the resources they have to work with.  

These are the people who will then formulate a strategic goal. 

The strategic goal describes the quality of life they want to achieve and what they must produce in order to achieve it. They must also identify and describe the resource base that they will need in the future in order to produce what is necessary to provide and sustain the quality of life they want.   

From that point forward, any action taken should not only achieve its objective but also make progress toward the strategic goal. In other words, all subsequent decisions are made in the light of and tested against the strategic goal.  

A feedback loop (monitoring and control) is set up to insure that, if the decision is not taking them where they want to go, they can correct it immediately.  

The constant cognizance stemming from testing each and every decision against the strategic plan is what ensures success. If things are not happening according to plan, then you need to either change what you are doing or revise your plan.  

The process is very similar to that used in major corporations today. The only difference is that the objective is to restore deteriorating environments while simultaneously increasing productivity and profitability. 

And a Word on Environmental and Social Responsibility 

Businesses of all sizes see black ink turn red if they don’t consider the environmental and social consequences of their decisions. Acting responsibly is the only way to attract and keep customers. In other words, acting responsibly is very much a part of the profit motive—if you don’t, customers will go away and so will the profits. A well formulated strategic plan will ensure that does not happen.  

Dr Jimmy T (Gunny) LaBaume [send him mail] is President and CEO of Land & Livestock International.com 

Copyright © 2013 by Land & Livestock International, Inc. Permission to reprint in whole or in part is gladly granted, provided full credit is given.

About Land & Livestock Interntional, Inc.

Land and Livestock International, Inc. is a leading agribusiness management firm providing a complete line of services to the range livestock industry. We believe that private property is the foundation of America. Private property and free markets go hand in hand—without property there is no freedom. We also believe that free markets, not government intervention, hold the key to natural resource conservation and environmental preservation. No government bureaucrat can (or will) understand and treat the land with as much respect as its owner. The bureaucrat simply does not have the same motives as does the owner of a capital interest in the property. Our specialty is the working livestock ranch simply because there are so many very good reasons for owning such a property. We provide educational, management and consulting services with a focus on ecologically and financially sustainable land management that will enhance natural processes (water and mineral cycles, energy flow and community dynamics) while enhancing profits and steadily building wealth.
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3 Responses to Managing the Ranch as a Business: Strategic Planning

  1. Pingback: Managing the Ranch as a Business: Key Insights. | Land & Livestock International, Inc.

  2. Pingback: Managing the Ranch as a Business: The Brittleness Scale | Land & Livestock International, Inc.

  3. Pingback: Getting Into the Cattle Business: Buying a Ranch and Making it Pay | Land & Livestock International, Inc.

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