Editor's note: This item appeared in the Nov. 30 edition of the Dairy Exec e-newsletter publishined by Dairy Herd Management. 

When I was on the agricultural economics faculty at Cornell University, I was asked to speak at an agronomy professional meeting. I was given the challenging assignment of assessing their research and extension programs. I worked hard on my assignment and provided what I thought was a balanced assessment.

After the presentation, one of my Cornell agronomy colleagues congratulated me and then said, “You were brutally honest!” What he meant was that I was fair in my assessment, but did NOT hold back or pull any punches with my comments.

In the dairy industry today, we are in the midst of great transformations that will impact every dairy business and every member of the industry. You as a dairy farm owner must also be brutally honest in assessing the current and future status of your dairy farm business. Never forget that one definition of insanity is continuing to do the same thing but expecting the results to be different.

What does being brutally honest in assessing your dairy mean?

  • Be objective. The closer we are, the tougher this is! You have to step back and pretend it is not your dairy. You may need some outside assistance as well. And here you must also be careful; tell them you are paying them for their brutal honesty. 
  • Choose and use your benchmarks carefully. We have a nasty habit in this industry of misusing benchmarks. Those you choose have to be relevant to your dairy. An average that includes many farms that are 100 percent equity may be very misleading to a dairy that is 45 percent equity. Today, a benchmark that includes farms with very profitable cropping enterprises may be misleading to a specialized dairy. Benchmarks are valuable, but the only measures that really count are the ones that will result in your dairy being profitable.
  • “OK is not OK.” Business — whether a Fortune 500 company, a restaurant in your local community, an agribusiness or your dairy farm — is about excellence. You are a dairy farmer — not a Fortune 500 CEO, a restaurant owner or an agribusiness owner — because you have strengths that uniquely position you for success as a dairy farm owner.  You must use these strengths to lead your dairy to success.

Here are two tools that can help you be brutally honest in assessing your dairy business:

  • SWOT analysis. With the assistance of your leadership team, your workforce and your trusted advisors, list all of the strengths (S) and weaknesses (W) of your dairy. This is an internal assessment of your dairy specifically. Now look at the local, regional, national and international environment that your business operates in to assess the opportunities (O) and the threats (T).
  • Five whys. This is one of the simplest and most powerful management tools in existence. When you think you have identified a problem — perhaps from the SWOT analysis — you typically have identified only a symptom of the problem. It takes further analysis to identify the real or root cause of the problem. Five whys has you ask “why?” until you have identified the cause or causes that, when corrected, will result in a lasting solution to the problem.  Let’s look at example:
    • High somatic cell count = symptom. Why?
    • Inconsistent milking procedures = symptom. WHY?
    • Problem = No one is specifically responsible for milker training.

Correcting this (and perhaps other root causes identified with the five whys) will reduce the somatic cell count.

Leadership Lesson: Leaders must be absolutely certain they are objectively assessing their dairy business.

Bob Milligan is Senior Consultant with Dairy Strategies LLC and Professor Emeritus at the Dyson School of Applied Economics and Management at Cornell University. He can be reached at rmilligan@trsmith.com or 651-647-0495.