Switch from grass to people, profits

However focusing on these two aspects of business leadership offers the greatest reward by underpinning business resilience -- the key characteristic of sustainability for long-term success in the modern environment.

That is my key learning from challenging times for New Zealand dairy as I reflect on 2015.

At first glance this proposition may not offer the most attractive role. It certainly isn't a recipe for a comfortable professional and personal life. However it goes with the territory of being the boss and is fundamental to bringing to life fiercely held aspirations and desires for personal family and business success.

Growing resilience is especially important as a business expands and confronts complexities such as multiple owners, involvement of succeeding generations and larger operational teams. It requires business leaders to get close to, rather than avoid, problems through an unrelenting drive for excellence in two key areas -- people and relationships and financial management and business performance.

The disciplines required to achieve this become embedded in business routines through their commitment to key processes.

Getting the best from people requires effective delegation while staying suitably close to the action: it's all about having a clear and credible sense of what is going on through sufficient contact to see what others are missing, and asking the hard questions. This needs to be done without cutting across delegated authority or undermining trust.

It must be build on a platform of clear expectations where collective performance responds to team values along with feedback to keep everyone focused on their role in hitting targets.

At an individual level this means regular performance reviews, encouragement and planned training. These tools are especially important for those who are new to supervision and people management. They require discreet overview by business owners and leaders who can pass on their experience and give those who are new to people management confidence to challenge the performance of those who are not meeting expected standards.

Clarity on business and team values creates the culture for quality relationships. In lean economic times this is fundamental for achieving essential economies and efficiencies. When the team can focus collectively on smarter ways, gains can be captured without risk to sustainability and job satisfaction across the business.

Business growth and bigger teams bring greater complexity in relationships. This is especially the case with a family business where succeeding generations are given more responsibility or seek autonomy to make their contribution. If formality and structure are important for best practice relationship management in an arms-length business they are crucial to the success of a family enterprise.

There is no room for complacency or avoiding people issues when family staff are involved. Systems and structures that enable open communication, meaningful consultation and foster cooperation based on generosity of spirit are critical. The absence of these will almost certainly lead to conflict and dysfunction for only superficial harmony.

Achieving optimum financial performance has similar dimensions. It requires a clear plan that captures the vision of the owners and communicates how this will be executed to internal and external stakeholders.

The agreed strategy must be converted to an annual plan and budgets that ensure timely planning and robust monitoring to identify variances and anticipate challenges. The result will be more effective allocation of resources and clearer understanding of where wastage can be eliminated or successes celebrated. With up-to-date information there is increased opportunity for continuous improvement that captures efficiencies and builds effectiveness.

Concentrating on these two areas enables business leaders to be ahead of the game. Rather than reacting to challenges they can proactively downsize problems and convert them to more manageable bite-size projects.

The big payback is greater focus by working on the business while growing leadership capability through a more entrepreneurial and less operational focus. This delivers the benefit of more time to reflect, grow personally and professionally, protect work/life balance and welcome the inevitable challenges that lie ahead.

While a farming business may get started through capabilities with cows and grass, farming entrepreneurs will only achieve their potential by shifting their focus to people and profits. It's a transition that requires a fresh mindset and competencies that are well worth striving for.

• Kerry Ryan is a Tauranga agribusiness consultant available for face-to-face or online for advice and ideas. www.kerryryan.co.nz