The Key to Ranching Success
Shaye Koester 00:02
Hey, hey, it’s Shaye Koester and I’m your host for the Casual Cattle Conversations podcast where we connect you to ranchers and beef industry enthusiasts who can help you build a more profitable operation and improve your lifestyle. Are you looking for a community of ranchers who support and challenge you to be more profitable and proactive? Then sign-up for our monthly RancherMind events. RancherMinds are mastermind events for ranchers to come together once a month and find solutions for their own and the industry's challenges. Stay connected by following @cattleconvos on Instagram, Facebook and Twitter and never miss an episode or event update by signing up for our newsletter on casualcattleconversations.com/newsletter. If you get value out of this episode or any episode drop a comment or tip me by using the link in the show notes. With that let’s see who our guest is today and connect you to a new resource to improve your own operation and lifestyle. Hey there! Thank you for tuning into another episode! Today we are visiting with Scott Mickelsen about the impact of strategic planning and how ranchers can get started with this process. This episode is releasing in early January, so if you are trying to set some goals for your operation this is definitely an episode that will help you create a plan to identify and achieve those! Oh, awesome. Well, thank you for hopping on the show today. I know we've connected over LinkedIn and gotten to know each other there a little bit. But would you tell my listeners a little bit about your background in the ranching industry?
Scott Mickelsen 01:56
Yeah, you know, I grew up on a cattle ranch on the Idaho/Montana border and was raised in a family operation for a number of years. And after that my wife and I we actually ended up buying a ranch in Wyoming and ran it for a number of years. And it was when cattle prices are really low so we really branched out and tried to do some extra things to bring in some ranch income. We started the guest ranch operation. We were selling little ranchettes. And then after that, I went back to college and got my degrees in ag education, extension education, did a little consulting on the side, and then taught high school ag and was in higher education for a number of years.
Shaye Koester 02:35
Awesome. So you've really done a lot and well versed in different areas of Ag, from the production side to the education and consulting side of things. So what's your main focus today?
Scott Mickelsen 02:48
So my main focus today is I teach ag at Lima High School. So I'm an ag FFA instructor. And then I also help businesses, ranchers and farmers come up with strategic plans to help them optimize their business, develop relationships in the family, those types of things.
Shaye Koester 03:05
Awesome. So really kind of focusing on the strategic plan side of ranching, let's just kind of start with the basics. And what is a strategic plan?
Scott Mickelsen 03:16
You know, a strategic plan is really an idea that's formulated by the family and maybe partners, bankers can be brought in. But it's really a plan on what the three to five year projection of that operation is looking at. And the beauty about a strategic plan is it sets some goals. You have some timelines. You have some people that that work on specific things within the action, or within the strategic plan. And it just helps people stay focused, it helps communication stay strategic, and it makes sure that everybody's involved in the plan so that you have the greatest outcomes in the operation in totality.
Shaye Koester 03:56
So you've touched on it a little bit, but I just want to make that point a little more clear. So big picture, 10,000 foot view, what is that purpose of having a strategic plan in place for these ranches and ranchers and farmers?
Scott Mickelsen 04:11
Yeah, I think it's, you know, it just brings everybody together they work on a common goal, a common interest. And it can it can focus in it can be narrowly focused, it can be broadly focused, but it just what is the overall picture? What is the overall goal of the ranching farming operation, and then as a family or as partners, let's work towards that. Let's strive to meet that.
Shaye Koester 04:32
Awesome and I think that's really important because ranching especially, I mean, ranchers are jack of all trades, they're constantly moving, doing a bunch of different things. I mean, like any business, there's tons of different moving parts, and sometimes it's easy to get caught up in the day to day stuff and kind of forget, maybe what task is actually the most important for that long term goal.
Scott Mickelsen 04:54
Yeah, you know, I think that you hit the nail on the head there, you know, they're, they have to deal with so many things. Every day, you know, there's, there's fluctuations in markets, there's environmental factors, there's neighboring things that sometimes come into play. And what this does is it really, you still have to take care of those day to day things. But this strategically helps you look ahead a little bit. Are you going to expand? Are you going to bring partners in or you can bring family members? And how is that going to be done. And so it's just really key. And just to share a little bit of experience, I was working with a family in Iowa, there was four brothers. And they invited me to their farming operation. So I walked into this house, and they had taken a house and they converted it into their offices. So the bedrooms, the old bedrooms, and now their offices in the kitchen front room, they knock the walls out. And that's where they held their business meetings. So every morning at 5am, the four brothers got together, one focused on the swine operation, one focused on the cattle operation, one focused on crops and the other one on marketing. So every morning at five o'clock, they sat down and strategically looked at their day, what cattle were going to be shipped, what hogs were going to be shipped, what inputs were coming in, what expenses needed to be made. But they looked at it for that day, for that week, and that month, and those four brothers were extremely successful, just because they sat down and they talk. And sometimes a strategic plan just gives you the avenue to do that is to sit down and and sometimes we don't like to have those conversations or uncomfortable conversations. But sometimes a strategic plan helps you have those conversations, which is so key.
Shaye Koester 06:31
Well, that's awesome and that's a great story of it being in place and actually following through. And I think what you said about they talked is the biggest thing there, you look at a lot of family operations or any operation really, there's more than one person. I mean, communication is the key to success in any business. And farms and ranches are no outlier there. There also needs to be a lot of communication, when you look at all the different entities and things going on.
Scott Mickelsen 07:02
Yeah, yeah, communication is key in any in any business, you know, family structure, whatever the case may be community. Communication is key two way communication and going back and forth, somebody speaking, somebody listening, you know, there's those key things and communication because without that we can't get the things accomplished for the day, we can't move forward on what our goals are, what our vision is. And communication plays such a key role in that.
Shaye Koester 07:26
Especially the listening aspect, easy to speak in, it's also easy to say we're listening, but just let those words bounce off and not actually take what they mean and digest that ourselves. So going back to the strategic planning side of things, what are the main components of a strategic plan that ranchers need to look at?
Scott Mickelsen 07:50
So a strategic plan... there's a couple of things and my approach is you come up with a mission? What is your mission? What's your overall thing that keeps driving you every day? We can break it down. We can even develop a vision. But the other the key things are is what are the goals and then what are the sub goals that are gonna help you accomplish your main goals. And then in that we identified dates, deadlines, we identify people that are going to be responsible for certain areas. And then there's also an update section. And that's really important. Because the update section, sometimes you get going down the road and you find out you can't do something because market prices are low, or just there's all kinds of things that happen in agriculture. And so sometimes you can't pull the trigger when you want to pull the trigger. So the update section is just a place where you can kind of keep a list of things that you've done, people you contacted to try to meet that goal. And sometimes you can put successful in their goals completed. Sometimes you put you know what, we couldn't do it now, because of a, b, and c, and then you just let that one sit and come back to it later. Or maybe it falls off because maybe it becomes it doesn't become as important as you thought it was when you first develop your plan.
Shaye Koester 09:08
Well, thank you for going into that and I think what's important there was you talked about how things are always changing in agriculture. So sometimes those initial plans can't be carried out because well, A, B and C was not one of our controllables. We couldn't control that. So plans do change.
Scott Mickelsen 09:26
Yeah. Yeah, you know, when I when my wife and I, we had the ranch, and you know, we went into it, and it was just going to be strictly a cow/calf operation. Prices went in the toilets. And so, you know, we had to figure out what else we're going to do. And so part of our plan became to turn it into a guest ranch operation. We brought people from all over the world that we started to sell little ranchettes on the back part of the ranch. And so we really had to look strategically to see what we needed to do to keep things going to keep things viable and so in agriculture every day we have environmental concerns we have, you know, the banker might put the brakes on things for us. There's all kinds of different situation, maybe family situations that come up, all kinds of things come up, that are out of our control. Sometimes these strategic plans need to be adjusted, need to be really looked at. Another really key thing in the plan is every month, or at least every quarter, is that you're doing updates to the plan. And that's when you sit down as a group and you really look at it and you say, Hey, can we still do this? Or yes, we can still do this, we're still moving forward. Or this one needs to be adjusted a little bit because of this.
Shaye Koester 10:39
Awesome, and thank you, the quarterly meeting side, I think that's really important. Because you know, every operation is going to be different, every family dynamics going to be different. And maybe it's multiple families working together, or you're hiring an outside manager. So those communication strategies are going to be different all around. It might be a morning meeting, like you said, about with the example you gave about the four brothers, or it might be just kind of a the night after or one night say, okay, loosely, here's what we're going to do. But I think those quarterly meetings or even monthly meetings of just sitting down and actually saying, Okay, are we in line with things are something we often forget about?
Scott Mickelsen 11:23
Yeah, I think sometimes, you know, we sit down and say, Okay, this is what we're gonna do for the year. And then sometimes it happens, sometimes it doesn't. Sometimes there's people that are brought into the family or brought into the operation, and we need to make sure that those people are included, that they're part of the decision making, it doesn't mean that we always do what they say. But collectively, as a group, we come up with what we think is the best goal, the best course of action to move our operation forward.
Shaye Koester 11:50
Okay, so we've talked about what a strategic plan is, why it's important, why it has a big impact on any business. But what does that process look like of saying, Okay, let's develop one, you know, where did where's that starting point? Because you can say it, but if you don't take action, what's the purpose? Or what's the point?
Scott Mickelsen 12:12
Yeah, it depends a little bit on the size of the operation, how many partners and so there, there are some variables there. But if you just if you just kind of put everything in a shell and said, here's kind of the the magic pieces. What it is, whoever is the controlling partner, or controlling partners, or the main owner, they have to be involved right from the beginning, because you need their buy in. And, and I say that because I was involved with one many years ago, where we were getting to, and I was pretty young in the process that wasn't one of the main people coming in. But we got almost clear through the whole process, the owner stood up and says, As long as I'm alive, I'll run this operation, and that was the end. And so the part that was missed is, is the consultants or the whoever didn't sit down with that individual and said, you know, what, what are your goals? What, what do you want to achieve out of this? And how can we make that happen? I think it's really important to listen to analyze, and then customize it to fit the people that are going to be running this, this strategic plan. So I think that's really key. And then I think the next step is, is you know, as you visit with them, you're going to learn some things about the operation, you're going to learn some things about the partners, you're going to learn some things about the family, then I think the next step is, is with some guidance and some co working is you bring in those other people. And it's not just the people that are doing the day to day work on the operation, I think it's important that if a son or daughter marry somebody, and they come into the operation, or even if they're not officially part of the operation, but that they need to be there, because I've got this thing in the back of my mind I've had for years is, is when the son or daughter goes home at night after working on the farmer ranch with grandma, grandpa, mom, dad and uncle whatever the case is, there's pillow talk that happens. And sometimes the spouse or the boyfriend, girlfriend, significant other says, you know, why did that happen? Or you know, so I think it's important for them to be part of the conversations, because sometimes they have great ideas. So I think that that part happens, and then I think as a group you start to look at, okay, what are the goals? What do you think are the main things that you want to accomplish as an operation. And you'll see some key areas that will start to come together and then those key areas, they kind of rise to the top and they become your main goals. And then as you identify those main goals you come back and you identify your sub goals, that's going to help you accomplish those. And and then during that process, you start identifying what does the timeline look like is this you know, in the next six months, or is it a year is it three years out five years out? So you start to establish that timeline and you start to put them in the categories and and then the people can start acting upon those things. And I think one of the great things in working with somebody, I used to work with a guy by the name of John Baker in Iowa, who did a lot of farm transition work with farm families. And one of the things that I think is really important is if you have a dad and a daughter, dad and the Son, you now have this strategic plan that somebody helped you put together was part of some of the conversations. So it doesn't pin dad against son or mom against daughter, or vice versa, is what they can say, you know, this isn't going to work, because so and so said this, and so it gives them an out, so that they don't have to have those arguing conversations between the partners within the business is that gives them a scapegoat to put that blame on somebody else's shoulders, that's the other part that's really powerful about these strategic plans. And, potentially having somebody come in and be kind of the guide and help put them together for the families.
Shaye Koester 16:04
So that really brings up an interesting point. And that's, do ranchers need to hire a consultant to put together a strategic plan? Or can it successfully be done independently within the family?
Scott Mickelsen 16:19
You know, I guess it would depend upon the experience of the family. But I am pretty big on bringing in a consultant. And the reason is, is just because, you know, when I taught, they taught at Iowa State for a couple of years, or what they call the ag 450 farm, and I don't remember what the subject is, I was teaching, but my, one of my students went home and says to his dad and grandpa, say, hey, look, you know what, let's try this on our operation. And they automatically shut it down. But he comes back, and he talks to me, and I tell him, I said, you know, what I says, Use me blame me, I says, blame me on the idea. I says don't don't drive that wedge between you, your dad and your grandpa, because you guys are gonna be working on this operation forever said, use me as your scapegoat. And I says, and then nobody owns it. And it's okay. So I think that's important. The other thing I think is important is that you have somebody that's got experience in dealing with strategic plans and action plans that can help put it together so that it fits the family, you need the family, the family is so key because they know the operation, they understand that they're the experts in that area, and then you bring in an expert, that's, that can pull these things together, can meet with the family, and then put the ideas down on paper and show them how to move through that process. So I don't think it has that the consultant has to be there for three years or five years, whatever the plan looks like. But maybe it's three to four meetings in the on the front side to help get it established, help the conversations to take place, get the goals established, for the responsible persons are, and then let them take it and go from there.
Shaye Koester 17:57
Okay, so about just like the setup process, like about how long does it typically take to go through a certain amount of meetings and get that strategic plan kind of set up.
Scott Mickelsen 18:11
Again, that'll depend upon the size of the operation, but in general, probably three to four meetings, and you're looking at probably four to six months. It just depends how the communication works, how the information is flowing, how often you can get the partners or the family together to discuss some of those types of things. And we have some great technology at our fingertips, today's Zoom and email and texting. So we have lots of different forms of communication, we can use. Me myself, I'm, I'm a face to face guy. So I really like, you know, if I was working with a family, I'd want to meet them at least one time, maybe twice. And then a lot of it can be done via distance through those technologies. But I think the first couple of times, it's critical to be there in person. But after that a lot of things can be done through email, texting, Zoom meetings, these types of things.
Shaye Koester 19:03
Okay. So, you know, say, I'm the rancher, I want a strategic plan to kind of start being put in place, knowing that there's probably going to be some changes and maybe some harsh changes that I don't want to hear. What is the right mindset to have when ranchers go in to starting this process?
Scott Mickelsen 19:30
Yeah, I think it's really important for the that's part of that first meeting, I think it's really important for the ranch owner, the ranch family, the ranch partners to understand what their limits are. Because as we go through things this past year with the drought, that's a huge limit for a lot of families, and that would have drastically changed a lot of people's strategic plans. So I think that's important to know what your limits are. And I think the other thing that's important is to be open minded, because you're going to hear ideas that you may be having have heard before from maybe other members, other partners. And maybe it's things that they wanted to try or wanted to say, but they just didn't feel comfortable in saying it. Now, here's a mechanism where we can put everything on the table. But then as a group, they decide which ones are the important ones. So the two key is, know your limits, and to be open minded.
Shaye Koester 20:22
So what would you say is the greatest challenge for ranchers when they start a strategic plan,
Scott Mickelsen 20:29
I would think that as things come on the strategic plan that are new or unfamiliar to them, to accept those and to try that, and maybe it's from a younger generation company, and maybe it's from a new partner company, and, but and I think that's why to be open minded, this is so important. I told you about the guy that stood up at the end of the meeting says, As long as I'm alive, "I'll run this operation that that operation." That operation failed and I don't know if it would have been successful, even if they would have went through the whole process or not. But I there's value in teams, there's value in bringing people together to get their ideas. And I think if they can be open minded, and accept ideas, they're not all going to make the list, they're not all going to be on the table, but at least be open to get them on the table so that we can look at them and decide, yep, here's our top three, or our top four, this is what we're going to really focus on over the next three years. A lot of these ranchers and farmers have been working on these family operations for years and understand it inside and out. And so there's probably two or three things, it's just gonna be solid, that's gonna stand there, because it's withstood the test of time. But there might be a couple of other things that come up, that might be new ideas might be some innovations. So it's just really important to just stay open minded to be part of the conversations. And when, when you walk away from, you know, don't be afraid to put anything on the table. And when we walk away and items, see an X and Y come off, then you know, be okay with that. But when items E and F stay on, be okay with that as well and work towards all of them. I think that's really important. I think one of the the key things is sometimes when family members who are partners and get distracted or discouraged, is when they give ideas, and they're not heard. They're not listened to they're not discussed, if they're discussed, and even if they're not put on the plan, but they know that they were heard and discussed. There's a there's a sense of ownership, there's a sense of sense of entitlement there that helps us partners move forward and to think differently. So I think it's really important that things are heard. They can be moved off, or they can stay on.
Shaye Koester 22:49
I really appreciate that last comment, because and I think that goes back to what we talked about with the talking and listening aspect. Because oftentimes, as humans in any situation, we don't necessarily need feedback. But oftentimes we just need to be heard. And I mean, that can mean the most more than anything.
Scott Mickelsen 23:09
Yeah, yeah. You know, if you're heard, if you're listened to, then you feel comfortable talking about something else later. If you're not, if you're just ignored, if it's brushed off, then you're convinced that you're going to get to worse, I'm not going to say anything, because it doesn't matter. And we all know operations where the established owners of the operation or young people come in who have made a big difference and change the the intended outcome of that operation. There's they're scattered across every state scattered across the United States. So it's important to listen and to at least see if it's something that's doable somewhere for the work.
Shaye Koester 23:47
So how have you seen this impact families as you've worked with different families? Because has it brought families almost closer together? In a sense, has it helped develop those boundaries between business and family? What have you seen on the family impact?
Scott Mickelsen 24:06
Yeah, I think it's brought families closer together. Because I think you know, and I'll share, so I talked about the pillow talk. And that is, in that example, comes from a farming family in the Midwest, whose son married a young gal, and she was never part of any of the discussions, but it was pillow talk every night. So pretty soon, he was getting fed up with what his wife was saying, because you know, is that true? Is it not true or she was she could have been badgering him. I don't know the whole story. But basically what happened is that after about 20 years in this operation, that son left and I think if the wife could have been part of the conversations so that she more fully understood what was going on. I think sometimes when we bring people into these these businesses, it's really important that we include them in the decision at least to be there to hear. And so I think that's important. So I've seen where it's brought families closer together. I've seen it where families are already too far apart that it it didn't do any good. And I've seen people that have done it and just do it perfect and are still in business today.
Shaye Koester 25:27
Well, that's great to hear. And I mean, it's like we've talked about a lot in this conversation in the past 20 minutes, it's that it depends on the family dynamic and the individual personalities as well. But as we kind of wrap up here today, what are what is one action step producers can take today to start in the direction of strategic planning.
Scott Mickelsen 25:52
You know, I think if nothing else is if they could, if they have partners, whatever the situation is, they can just pull those people in and start to talk, say, you know, what this is this is where we're at as a business, this is where we're at as an operation. What are the next steps for us, here's your, here's our top two things we've been working on, we've been really successful at it, what can we do to capitalize on that, and, and then just sit down and listen to what some of the other people have in his ideas. And you know, the other thing is, if you have sons, daughters or partners, you know, bring their partners, your husbands and wives into those conversations. It just, if a, if a husband can go home at night, and be comfortable with the way the operation is going, or the daughter the way the operation is going on the spouse and the significant other can see that they're comfortable. They've been included in the conversations. I will guarantee you that the majority of farm operations that in ranching operations that fail today because of family situations, that we would probably save the majority of them if that communication thing would happen.
Shaye Koester 27:05
Well, awesome. Thank you very much for everything you've shared and all the expertise. Is there anything else you would like to add today?
Scott Mickelsen 27:13
You know, what I just, as I mentioned, I grew up on a family operation. It's not part of our family anymore. And so if if families can just do what they need to do to hang in this together, to make their operations successful, to continue to run, run them to bring in the younger generation to help them be successful and help them learn. I think that's really, really key. And I think strategic planning. I think action planning plays a key role in that.
Shaye Koester 27:41
Well, thank you very much. That wraps up all the questions I had for you today. And I'm sure my audience will really appreciate all your insight.
Scott Mickelsen 27:49
All right, thanks, Shaye.
Shaye Koester 27:50
And that’s a wrap on that one! Let’s keep this conversation going on my social media pages. Be sure to follow @cattleconvos and comment on any post featuring Scott and this topic. Thank you Scott for sharing your expertise and advice with us today. Thank you all for listening and have a great day!
