Most “ranch managers” aren’t managers. They don’t do the work of a manager, they don’t produce the results a manager would produce and they aren’t paid what a manager would get paid. The result isn’t just poor management. Most American ranches aren’t managed at all!
Every business has three levels of issues. The first set of issues revolves around ownership. Owners are responsible for defining owner value and charting the strategic direction of the company. The next level, management, concerns itself with developing plans to implement the strategy and deliver owner value. The third level is labor. Labor does the work outlined in the plans.
I was reminded of these different roles at last month’s Executive Link Conference in Big Sky, Montana. Following presentations by E-Myth coaches, in which they made the distinction between entrepreneurs, managers and technicians, we visited the Flying D ranch. At the Flying D we met with two highly effective managers, Mark Kossler and Danny Johnson. (When Mark first attended the Ranching for Profit School and joined Executive Link, he was the manager of the Flying D. He now manages all of the ranches in the Turner network, totaling about two million acres.) Their remarks about strategic and tactical planning, developing relationships within the ranch team, with customers and with regulators, highlighted the difference between what real managers do and what most people we call ranch managers do.
A more accurate title for most ranch managers would be “foreman.” A foreman is the person who oversees work and ensures that it is done according to the plan. The manager is the person who creates the plan and orchestrates the team.
You might think the characteristics and responsibilities of someone managing over 50,000 animals on 2,000,000 acres would be a lot different than someone working at a smaller scale. But regardless of scale, an effective manager needs to plan, delegate and communicate.
The plan the manager creates shows how owner objectives will be achieved. Planning includes projecting livestock performance and describing how the grazing resources will be managed to support that performance (and produce other wildlife and landscape objectives). The planning includes projecting enterprise gross margins, profit (or loss) and cash flow and shows how labor will be deployed through the year.
Most managers got promoted because they excelled at doing the technical work they now manage. It is natural that many find it tempting to continue to do most of that work themselves. But effective managers delegate that work, knowing that the cost of doing the technical work themselves is too high. To delegate effectively, they clearly define the results they want, document processes that produce those outcomes and hold people accountable for using those processes and producing results.
If the biggest job of a manager is planning, the most important skill is communication. Effective managers know how to communicate the plan to owners and employees, and listen to concerns of both with empathy.
One big constraint we face in ranching is that our ranches are too small to justify hiring qualified people for each position … although it could be that our ranches are too small because we haven’t hired qualified people for each position. We often wear all of the hats (ownership, management, labor) in the business ourselves. That makes distinguishing one role from another difficult. Difficult, but no less important.
Many ranches don’t have a strategic plan or an operating plan. They don’t prepare a budget unless the bank makes them. They don’t set goals or targets and, if they do, they don’t monitor the results they get against those targets. They don’t define employee roles, effectively delegate or hold people accountable.
The most common reason I hear for the failure to manage is that we don’t have time. We are too busy doing the technician’s work. The result is that we often do things right without knowing if we are doing the right things.
I think there is something even bigger at work. I don’t think most ranchers know how to manage. And how could we? No one ever taught us. Dad showed us how to build a brace, put up hay and vaccinate a cow. He taught us how to grow crops and raise cattle. He never showed us how to plan or delegate or communicate. Imagine the difference it would make if someone in your business had these skills.
Is your business being managed? Take this Manager’s self-test to see if your ranch has a manager.