Better Decisions: In bad times, good management is your most important asset

Friday, February 29, 2008

Good communications with your staff, good planning and a positive attitude take on additional importance when the going gets tough

by GARY MAWHINEY

Hardly a day goes by when you do not read or hear from the media that agriculture is on the brink of collapse and that soon we will have to rely entirely on food produced offshore. These stories all have merit and no one can argue that agriculture is not facing difficult times. Some commodities are having a harder time than others, but overall agriculture is a threatened industry. In bad times, one thing for certain is that if farmers fail to recognize that their employees are their most important asset, things will go from bad to worse.

Bad times can bring out the best in both managers and staff, and good human resource management always starts at the top. The main objective for a top farm owner should be to survive the bad times with committed employees still working for you when things turn around.

Top farm managers know that they are only kidding themselves if they believe that they can be pessimistic and unresponsive to their staff during difficult times. Any problems will only be magnified and, in the end, the business will not only suffer but may ultimately collapse.

According to Bernie Ervin of the Department of Agricultural Economics at Ohio State University, farmers face four key challenges in managing during difficult times.

• Their attitudes towards bad times, employees and the future;
• Developing a plan to work through the bad times;
• Adjusting human resource practices;
• Communication with all employees.

As with all things in life, your attitude plays a major role in the outcome of events. If farm owners or managers exhibit an attitude of doom and gloom to their employees, it would be naïve thinking indeed not to expect their staff to exhibit the same tendencies. Once this happens, their work will suffer, as will relationships between employees and owners.

The farmer needs to send a clear message to employees that he has a handle on the difficulties and has a plan in place to address them. Owners need to show that they have an insight into the future and, although they do not like the way it is shaping up, they are prepared to deal with the difficulties and work out a solution whereby everyone comes out ahead. A positive attitude on the part of management gives staff something to rally around in the bad times.

Planning is a cornerstone of success in any business and even more so in bad times.
Consulting with your employees about alternative ways of doing business is one of the steps in the planning process. You may be pleasantly surprised by some of the ideas and suggestions that you receive.

Looking at ways to reduce costs, as well as increasing market share and improving cash flow, are just some of the topics that should be addressed. This will give your employees a sense of participation in the farm, as well as improving morale. Planning is an ongoing process and will have to be repeated on several occasions during the bad times.

When it comes to adjusting human resource practices, you have to be careful not to "slash and burn." The easy way to reduce costs is to reduce or eliminate staff, since salaries and benefits are probably your most expensive input. While some downsizing is to be expected, it should be kept to a minimum. Remember that farming goes through periods of good and bad and you do not want to be faced with replacing all of your staff in the future, especially the good workers.

This is also not a time to forego all bonuses and staff recognition. You may have to do away with large cash rewards, but replace them with other types of recognition. Things like tickets to a sporting event or theatre will continue to show that you are concerned about the welfare of your employees. Learn to celebrate little successes in bad times. Buying your team members coffee and doughnuts for a small job well done will ensure that they continue to give you their best effort.

Communication with and amongst employees is perhaps the most difficult thing to address even in good times. Bad times tend to emphasize any communication difficulties and may lead to misunderstandings. In downturns, employees will spend more time talking to their fellow workers and this is where rumours and misunderstandings start.

If the owner usually greets everyone each day with a cheery "good morning" and then, all of a sudden, fails to do so, you can be sure someone will take this as a bad omen. Perhaps the farmer was preoccupied and in a hurry, and innocently failed to give his usual greeting. Human nature is such that people would look at this as a sign of something bad about to happen and would share their fears with other workers.

Employers have an obligation to be as truthful and forthright as possible with their staff during bad times. You are not expected to disclose the intimate details of your business, such as financial and family difficulties. You should, however, place yourself in your employees' shoes and realize that their future is tied to your business and their concerns and fears are exactly the same as yours.

Bad times cannot be avoided and are no fun for anybody. If you are able to adjust the way that your human resources are managed, your farm business will be ready for the good times that will surely come. BF

Gary Mawhiney is Human Resources Management Program Lead with the Ontario Ministry of Agriculture, Food and Rural Affairs. Email: gary.mawhiney@ontario.ca