Feedback Loops to Aid Decision Making

If you were to come upon a car wreck, which turns out to be your neighbor with terminal cancer, would you worry about their next chemo appointment? Probably not, your first concern would more likely be CPR or stopping the bleeding. This is about the extent to which we generally discussed the feedback loop at our Ranching for Profit Schools until Shanon Sims came on as an instructor, and he yelled at us. I was the new guy so everything was a blur to me, but after our RFP season this winter and co-instructing three schools in two months, I have to admit, I agree with him that the feedback loop is one of the most important pages in our Ranching for Profit workbook.  

A feedback loop can be boiled down to three simple words: Plan, Monitor, Manage (or Adapt). A grazing feedback loop would include planning the stock days and pasture moves before the growing season, monitoring monthly rainfall and forage consumed, then managing mid-season changes as effective rainfall is recorded and animal performance needs are met.

Every successful business has a plan, for ranches and farms we suggest four areas of planning: people/ relationships, economics/ finance, land/ ecology, and animals/ production. Dwight D. Eisenhower says it best, “In preparing for battle I have always found that plans are useless, but planning is indispensable.” Some people get frustrated because the original plan never goes through, but that’s okay because the planning process enabled us to come up with alternatives in real life. Planning is never a waste of time. In fact, right now we are getting ready for the Executive Link winter board meetings where there will be lots of planning in the board rooms in a short amount of time. I love the time crunch, but I know some people get frustrated by it. Why don’t we give EL members more time in their meetings? Because they would just use up that extra time too! Leonard Bernstein has a great quote too, “To achieve great things two things are needed: a plan, and not quite enough time.” Humans need a little bit of pressure to get things done. Many farmers and ranchers face the problem of avoiding decisions, but remember not doing anything is also a decision. That might very well be a fatal decision for the business.

After a plan is in place, it must be monitored. The grazing chart, stock flow, cash flow, and effectiveness areas are tools used at the RFP school to monitor those plans. Monitoring these throughout the year is a way to correct it before it is too far gone. In driving terms, that’s how we at least stay on the road and not end up in the ditch. Monitoring is probably the easiest for farmers and ranchers. We generally always know what the checking account balance is, how the grass looks, what our current workload is, and how many animals are on the ranch. 

After monitoring a plan, managing, adjusting, or adapting is the final step. Here is where producers need the courage to act, and where great business managers separate themselves from average. Great business managers will turn threats into opportunities without changing normal business operations. We have worked with ranches that have made destocking decisions during drought that led to enormous profits in the years following the drought. Was the original plan to sell or transport their cows somewhere else due to no rain? Absolutely not! Who wants to plan on missing those rains? However, by monitoring precipitation in relation to grazing, they were ahead of everyone else and capitalized on the market when acceptable grazing conditions returned.

Big decisions can be scary; some farms and ranches make daily decisions with six-digit dollar amounts involved. However, by using a feedback loop and some analysis, making the unknowns a little more known can make those decisions easier to handle. Add in there a little time crunch, some trusted peer advisors, and positive results are bound to follow. We are always accepting Executive Link inquiries, so contact us here at RMC if you are interested in joining this program to propel your business forward.