The 80/20 equation for farm success: Then & now

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There’s a lot that’s changed in farming over the past 10 to 20 years. From the technology that’s in equipment now, to the role that landlord and lender relationships play in the operation, to creating business plans—there’s a lot for a farm leader to think about.
Here’s something that I hear from quite a few farmers—and it seems to become truer with each year in ag. In the past, it used to be that if you wanted to be more successful than your neighbors, you made sure that you were working harder than them. That usually meant more hours—more blood, sweat and tears. You literally outworked your competition.
The ‘equation’ for farm success went like this: 80% hard work, 20% smart business decisions. The harder you worked, the more successful you could often become. Maybe that’s the philosophy some of your family members from the older generation still hold—your dad or grandpa or uncle.

The farm leader’s shift
In the last decade or two, a shift has been happening. It’s moved the farmer from focusing primarily on production, working and laboring hard to produce a crop or livestock herd, to a farm leader responsible for running a full-fledged business operation—complete with employees to manage and major financial decisions to make—in addition to the production decisions.
I think the ‘success equation’ I mentioned above has reversed from what it was in the past. It’s still made up of the same components, but the ratio has changed. So now that equation is more like this: 80% smart business decisions, 20% hard work.
It’s not that hard work isn’t important—it certainly still is. Being willing to do what it takes to get the hard work of production done is crucial on a farm—because farms are built around production. It’s just the fact that the business decisions the farm leader makes now have greater influence over whether the operation is successful or not. And today’s decisions are getting bigger.

Rate yourself
On a scale of 1-10, how would you rate yourself, as a farm leader, on your business decision-making skills? Why did you rate yourself that particular way? What actions do you take to keep improving your decision-making skills? Find more in our Smart Series newsletter or Modern Farm Business podcast to help you sharpen your business skills.