Change Management, and Management Education

The ManagementExcel Program

By Bernie Erven

No farm manager, no farm business, nor any part of agriculture escapes the pressures of change. Change, like an unattended leaky water faucet, is relentless--drip, drip, drip. As farmers face, avoid, or waffle to slow the drip, drip, drip of change, many find themselves in unfamiliar waters. They sense their present management tools and skills may be lacking. They know they have choices to make. Some dread the choices. Some welcome the choices because they see opportunity in change. Just as faucets do not fix themselves, managers detect that doing nothing isn't good enough. Uncertainty about the future masks what needs to be done.

The pressures of change affecting farmers also affect Ohio State University Extension. OSU Extension and its management education programs must respond to change. The educational programs that have helped farm managers in past years do not necessarily continue to satisfy their educational needs. This realization gave rise in the early 1990s to a new management education program called ManagementExcel. Members of the initial target audience were farmers wanting to learn the management processes proven to work for managers of the most successful farms and other businesses similar to farms. The targeted farmers were ready to deal with the realities of change.

This article grows out of the ManagementExcel program and what has been learned about change, farm managers, management education, and helping farmers prepare for their futures. Their futures will be dominated by change. Management education dwelling on answers for today's problems is quickly dated, e.g., the economics of a particular technology. The analogy of giving fish versus giving fishing lessons parallels giving management solutions versus teaching management tools. The inevitability of change made helping managers deal with change a solid foundation on which to base a new management education program.

What Is Management?

Management is all that farmers do in the business that is not labor. Obviously, no business manages itself so success of a business is directly related to management. Two farms with the same resources, size, location, and enterprises can have quite different results because of differences in their management.

Successful farm managers pay attention to today's decisions while also planning for the future. Farm managers make production, financial, marketing, and personnel decisions. They seek an understanding of the external environment over which they have almost no control. The results of their many decisions create an internal, on-the-farm environment. It is here that they come to grips with the pressures of change. Their success finally depends mostly on what they create within their individual businesses, not what the external pressures do to or for them. Traditionally, farmers have learned to be better managers by dealing with pieces of this management picture. They learn through their experiences, other managers, educational meetings, reading, the media, and as many other creative ways as fit their time available, resources, and preferences for learning. Not surprisingly, some managers learn a great deal about management over time, while others learn very little.

Management Education

The goal of management education programs is simply to help farmers become better managers. This presumes they want to be better managers and that people designing management education programs understand management and the needs of farmers well enough to design helpful programs. The ManagementExcel program took a bold and new approach to management education. It set out to teach farmers the basics of modern management. It defined management in terms of the basic functions that managers need to attend to even though they had not explicitly defined each of the functions as something they wanted to learn.

For purposes of ManagementExcel, management is the attainment of organizational goals in an effective and efficient manner through planning, organizing, staffing, directing, and controlling organizational resources.2 A farm's goals depend on the mission identified for the farm by the management team. The mission is usually the attainment of some combination of: profit, security, lifestyle, and prestige within a set of personal and family values. Managers succeed when they accomplish their goals using what they consider an acceptable amount of their human, land, equipment, facility, financial, technological, and information resources. Conversely, managers fail when they do not accomplish their goals or when accomplishment of their goals takes too many resources.

Incorporating planning, organizing, staffing, directing, and controlling into the definition places the emphasis on what managers do, i.e., their functions, rather than the roles they play in a business, e.g., resource allocator, negotiator, entrepreneur, monitor, figurehead, and spokesperson. Although the roles are important, it is the functions rather than the roles that are emphasized. Similarly, managers' various skills, i.e., conceptual, technical, and interpersonal skills, are important to the carrying out of management functions rather than as ends by themselves.

Management education built on the functions of management has several advantages. First, all five functions are essential. Many experienced managers have never learned to write a mission statement, do an organizational chart, write a job description, interview an applicant, be a good listener, or develop a management information system. Second, prescriptions, recipes, and canned answers to problems are avoided. Instead, managers learn to identify the management causes of problems and then use management tools to resolve them. To illustrate, what at first appears to be a nutrition problem causing thin cows may actually be a problem of management failing to put in place a plan for producing high quality forage. Third, the confusion between management and leadership is minimized. Leadership is part of the directing function. No farm can succeed without leadership. Leadership without planning, organizing, staffing, and controlling is futile. Management without leadership for implementation and attention to day-to-day human interactions is similarly futile. Excellent leaders may not be effective managers. Managers who ignore the directing function are ineffective.

Wrong-headed Paradigms about Change and Management

A manager's paradigms are the mind-sets that reflect the knowledge, beliefs, perceptions, and assumptions about the world in which he or she functions, e.g., hard work brings success. Paradigms are the eyeglasses through which managers see change that has occurred and the need or lack of need for more change. Paradigms are perceptions rather than facts. Managers' paradigms evolve and change with experiences, education and training, crises, and the ways in which managers are battered by messages from outside their personal comfort zones. Similarities in paradigms help people fit in, get along, have a sense of direction and comfort, and have reasons on which to argue for the status quo. On the other hand, paradigms can limit managers' viewpoints, openness, and understanding of the need for change.

Many paradigms affect change, management, and management education. The good news is that these paradigms can be taken into explicit account in management education programs. Today's paradigms can be changed. Paradigms are unique to each industry, culture, and group of people. Understanding the widespread paradigms of agriculture helps in understanding both the need for change and reasons change is so difficult.

The following three paradigms are illustrative of the ways in which paradigms constrain our thinking about change. Each misleads development of insight into change's impact on managers.

Paradigm 1: Change can be avoided, slowed down, controlled, understood, and/ or ignored.

For the individual farm manager, change is driven primarily by macro factors off the farm. These factors are varied and continuously changing. The macro factors may be:

• economic, e.g., urban and development pressures elevating the price of land,
• technological, e.g., precision farming,
• informational, e.g., the Internet giving some farm managers huge advantages over their less informed neighbors,
• cultural, e.g., a job viewed as more than a way to earn a living requiring employers with high employee turnover to make their jobs more satisfying and rewarding to employees,
• globalization of agriculture, e.g., corn, wheat, flowers, fruit, and cucumbers for processing being international commodities rather than unique local agricultural products, and
• policy, e.g., zoning controlling the ways in which land can be used or sold.

In every case these and many more macro pressures affect individual farm managers in ways they cannot escape. Their challenge is how to manage and lead their businesses in the face of continuous change.

The macro changes affecting the need for change in agriculture apply both to thriving and foundering farms. When management is viewed as the continued application of what has worked, the farm becomes an unimaginative bureaucracy living by rules and tradition. The unchanged rules and traditions are destined to make the farm a laggard. To illustrate, selling high quality apples for customers to take home for baking, canning, and freezing may have worked well for two generations. Now previously loyal customers are changing to the new market down the road offering pies ready to bake, pony rides for the children, a gift shop featuring apple knickknacks, and advice on which apples to buy.

A struggling manager may be no more aware of his or her constraining paradigms and the need for change than the thriving manager. To illustrate, "'Hard work accomplishes all' may have been Dad and Mom's motto but hard work hasn't solved my debt problems."

Managers may stop making necessary changes. Years of successful change may be followed by resistance to further change. "Don't change my change. I have had enough change." Not a surprising response from a manager who has grown tired of changing. Any manager is vulnerable to turning from a change pacesetter to a change laggard. Continuing to struggle with change can wear down even the most forward looking manager.

ManagementExcel

ManagementExcel is the name for Ohio State University Extension's programs that focus on teaching business management principles. ManagementExcel focuses on the five functions of management (planning, organizing, staffing, directing, and controlling) rather than on technical production subject matter. In no sense does ManagementExcel eliminate the need for technical education for producers. The two types of educational activities are highly complementary. Technical education is most valuable when farmers have the management ability to implement the technology. To deal with change, managers must deal with both their various functions as managers as well as the technology of agricultural production.

ManagementExcel is the general label for the federation of individual teams functioning in four of Ohio's five Extension Districts. ManagementExcel is driven by a bottom-up philosophy of extension programming. Primary responsibility for the local programs rests with county and district Extension personnel. Local planning groups chose their own name for ManagementExcel workshops. Dairy Excel, HortExcel, Pork Performance Plus, Fruit and Vegetable Excel, Grain Excel, AgExcel, Equine ManagementExcel and Small Business ManagementExcel are examples of names chosen for specific programs.

ManagementExcel features three daylong sessions one week apart at each location. The workshops, called Managing for Success, typically have 10 to 20 participants. People who have attended all three days are called graduates. Repeat attendance is a major indicator of the positive response to the management material presented. More than 98 percent of the people attending the first day of the workshops return for the second and third days.

The Managing for Success workshops are followed with activities limited to graduates, e.g., study trips to visit farm managers in other states, field days at graduates' farms, and advanced workshops on topics such as financial management, feeding management, and situational leadership.

From the initiation of ManagementExcel in 1991 through 1997, ManagementExcel teams have conducted 91 different programs for about 2,375 participants.

Functions of Management

The five functions of management as taught in ManagementExcel are planning, organizing, staffing, directing, and controlling. The following descriptions of these five functions makes apparent the tie between management education programs and the manager's ability to deal with change. Dealing with change suggests first a need to deal with the functions of management so that the business is able to continue functioning. Dealing with change cannot substitute for competence in any one or any combination of the five functions. Focusing first on competence in the functions of management paves the way for dealing with change. Change is best dealt with from a position of management strength.

Planning

Planning is the ongoing process of developing a farm's mission and objectives and determining how they will be accomplished. Planning includes both the broadest view of the farm, e.g., the mission ("Why are we in business?") to the narrowest, e.g., a tactic for accomplishing a specific goal ("How can we improve our calving interval?" or "How can we improve the flow of customer traffic in and out of our parking lot?")

Participant in Management Excel workshops write mission statements, learn how to identify SMART (Specific, Measurable, Attainable, Rewarding, and Timed) goals that lead to accomplishment of the mission chosen by the farm's management team.

Organizing

Organizing is establishing the internal organizational structure of the farm. Organizing focuses on division, coordination, and control of tasks and the flow of information within the organization. It is in this function that managers distribute authority and responsibility to job holders.

Participants learn basic principles of organization, e.g., span of control, parity between responsibility and authority, and the importance of each person having a single supervisor. They learn how to use these principles in designing an organizational structure and developing an organizational chart.

Staffing

Staffing is filling and keeping filled with qualified people all positions in the business. Recruiting, hiring, training, evaluating, and compensating are the specific activities included in this function. In the family business, staffing includes all paid and unpaid positions held by family members including the owner/operators.

Participants learn the steps making up a process for filling a position. Tools and skills for implementation of the process are included, e.g., tools for building a pool of applicants and keys to interviewing success. Learning how adults prefer to be instructed and a process for training completes the coverage of the staffing function.

Directing

Directing is influencing people's behavior through motivation, communication, group dynamics, leadership, and discipline. The purpose of directing is to channel the behavior of all personnel to accomplish the farm's mission and objectives while simultaneously helping them accomplish their own career objectives.

Participants learn the key skills necessary for the directing function, including communication, leadership, and employee motivation.

Controlling

Controlling is a four-step process of establishing performance standards based on the farm's objectives, measuring and reporting actual performance, comparing the two, and taking follow-up action as necessary.

Participants learn how to choose what to measure in their businesses and how to relate the control function back to the SMART (Specific, Measurable, Attainable, Rewarding, and Timed) goals identified as part of the planning function of management. The importance of information in decision making is emphasized.

Lessons Learned from ManagementExcel

The most important lesson about change and management learned from ManagementExcel is that managers, even experienced managers, relate positively to a functions of management approach. A wide variety of managers have participated in ManagementExcel: dairy farmers, landscapers, fruit growers, grain farmers, commercial stable operators, pork producers, nursery operators, vegetable growers, greenhouse operators, and more; small to large size businesses; from most parts of Ohio; young and old, male and female; and family and nonfamily businesses. Across all of these groups, the importance of planning, organizing, staffing, directing, and controlling has been recognized and accepted. The acceptance leaves practically all participants in the three-day seminars convinced that they must perform well in all five functions, not just the functions they find most enjoyable or the ones at which they excel.

Recognition of the importance of each of the five functions leads to a vision of what a well functioning, progressive, effective and efficient business needs to be. One would expect to find the following in a well-managed farm business:

1. From planning--a mission statement that reflects the management team's consensus of why the business exists and what it values; a set of goals that needs to be met for the business to attain its mission; a business plan that incorporates the production, financial, marketing, and human resource strategies necessary to attain the goals.

2. From organizing--an internal organizational structure that effectively distributes authority and responsibility from the top managers to every level in the business, tasks organized into attractive and rewarding jobs that challenge each job holder; an organization chart kept current so that everyone in the business understands how their part of the business relates to all the rest of the parts; broad sense of shared responsibility for the welfare, progress, and future of the business; and widespread knowledge of job descriptions at all levels in the business.

3. From staffing--all positions shown in the organization chart continuously filled with competent people; backup labor available as necessary through cross-training of regular employees and part-time backup employees; and a training program that provides orientation and start-up training for new employees, retraining as necessary for experienced employees, and specialized training for people to be given new responsibilities.

4. From directing--leadership that helps each person in the organization be motivated to accomplish his or her career goals and help accomplish the farm's business goals; team building; managers at every level paying attention to group dynamics and interpersonal relations; open, honest, and continuous communication; and conflict management.

5. From controlling--a clearly established control process based on the goals of the organization; corrective and preventive action taken in time to resolve or prevent problems; control at the strategic or top level of the organization, control at the tactical or middle management level, and control at the operational level; management information available at all levels in the business; and computerization as appropriate to make control and management information efficient and timely.

The vision is admittedly optimistic about what can be accomplished through management. Yet it is practical and realistic. It captures what can and is being done through continuous commitment to high quality management. It makes clear that all five functions of management need to be reckoned with. The analogy of the weakest link in the chain being most important helps understand why all five are included in ManagementExcel. One cannot generalize as to which function of management is weakest among farm managers. A business by business self-analysis of management strengths and weakness is essential.

The second important lesson from ManagementExcel regards change. Managers who implement the vision of what a well functioning, progressive, effective, and efficient farm business needs to be are in an excellent position to deal with change. Change and management are deeply intertwined. Change compounds the problems of poorly managed businesses. Change provides opportunities for the well-managed business. Confidence that change coming from external pressures can be faced builds enthusiasm for making internal changes in the business: new paradigms, new enterprises, new technology, new training, new Š , new Š, --never ending "new."

The third lesson is actually a set of observations, many with negative connotations.

1. Some farmers are overwhelmed with their immediate problems, fears, and need to change. They are convinced that ManagementExcel would be a waste of their time even if they had the time to attend.

2. Some farmers perceive themselves as producers. They have a strong preference for learning more about technology and how to produce. Such learning is personally satisfying and often affirming. Hearing, reading, and seeing that they are already doing much of what is recommended builds confidence. "If I am in good shape today, why won't I be in good shape in the future?"

3. Active learning works well with most farm managers. ManagementExcel engages participants in learning. The Managing for Success workshops include such active learning techniques as discussion, role plays, problem solving, homework, and sharing of in-class work. On the other hand, an approach to education that puts the emphasis on what people learn rather than on lecturing makes some managers uncomfortable. Their easy solution is not to attend ManagementExcel.

4. Three-day workshops are offered by OSU Extension to farmers in their local communities for registration fees of $100 to $150. The registration fee covers a sizeable participant's reference notebook, meeting costs, and three meals. The same type of workshop costs $500 to $5,000 when offered in urban areas for nonfarm managers. ManagementExcel programs have been exceptionally well received by those attending. Virtually 100 percent of the people attending the first day of the three-day workshops return for the last two days. Yet getting people to register has been difficult. Management education and learning to deal with change fail to make farmers' "hot topic" lists.

Farmers will find ways to get the management education programs they want and need. Some alternatives to OSU Extension for these programs already exist. More will be created if the demand warrants. Programs that meet farmers needs will continue. The rest will and should fail.

OSU Extension is considering several ideas to increase participation in the program. Partnering with agribusiness firms to offer the workshops may be helpful. Developing a better understanding among farmers about the helpfulness of ManagementExcel and improving the image of OSU Extension as a source of management education may increase attendance. Graduates may be able to help other farmers understand the merits of attending ManagementExcel programs.

5. Some people conclude from ManagementExcel programs that they do not have management futures in agriculture. Coming to this realization is a success for ManagementExcel. For both those who leave ManagementExcel enthused about their futures and those who start looking for career alternatives, the impact on people is positive.

Summary

This ole world's gonna keep on changin' long after we're dead and gone. This anonymous bluegrass singer's lament are words of encouragement for the farm managers determined to thrive on whatever is coming. These managers see the inevitability of facing change until the ends of their management careers. Where then is the good news? They see opportunity in their broad understanding of the macro forces of change over which they have no control. They see their opportunity not from being better forecasters of the future, not from being able to avoid change, not from learning to like change, but from knowing they have the management tools that will allow them to address whatever problems come their way. Change they will. They know their paradigms will be continuously challenged and changed. Bring on the future. They are ready.

Ohio's Challenge, the magazine of agricultural economics, in conjunction with the Ohio Agricultural Research and Development Center and Ohio State University Extension, is distributed throughout agricultural industry to growers, agribusiness leaders, legislators, education facilities, and mass media. Published fall, winter/spring, and summer by the Department of Agricultural, Environmental and Development Economics, College of Food, Agricultural, and Environmental Sciences, The Ohio State University, Copyright © 1998, The Ohio State University.

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