Know Before You Grow
03/10/2022
Know Before You Grow
In a recent newsletter from FBS, Norm Brown, President FBS Systems, Inc., ASAC Member and CAC, provides great insights on External vs. Internal Knowledge. He challenged his readers to consider the assumptions we make about where we get our information, and the affect our assumptions can have on our ability to make sound business decisions.
Here are Norm’s thoughts:
"It's not what people don't know that hurts them. It's what they do know that just ain't so." -Will Rogers
At least that’s what some people believe. Others are just as sure this quote came from Mark Twain. (Unintentionally, their collective wisdom is validated.)
Throughout the next year we’ll be puncturing myths and challenging your assumptions about your accounting and business practices. While the process may be painful, the results will help you know as well as grow.
The opinions expressed in this article are the author's own and may not reflect the opinion of ASAC or its members.
Know Before You Grow
In a recent newsletter from FBS, Norm Brown, President FBS Systems, Inc., ASAC Member and CAC, provides great insights on External vs. Internal Knowledge. He challenged his readers to consider the assumptions we make about where we get our information, and the affect our assumptions can have on our ability to make sound business decisions.
Here are Norm’s thoughts:
"It's not what people don't know that hurts them. It's what they do know that just ain't so." -Will Rogers
At least that’s what some people believe. Others are just as sure this quote came from Mark Twain. (Unintentionally, their collective wisdom is validated.)
What about you? Are you preparing to make critical management decisions based on intuition, past experiences, or what your neighbors are doing rather than relying on objective data? You’re not alone. We’re convinced a majority of producers begin with erroneous assumptions, then bolster their "confirmation bias" with DIY analysis. (Of course, we could always be proven wrong!)
External Knowledge
If there’s any lesson to be learned from the past 2 years it’s that no "black swan" assumption is too outlandish or unlikely. While we’re not aware of any risk-management service that has precisely predicted all the surprises we’ve experienced, these organizations—as compared with the sages at the “coffee shop”—provide valuable expertise and perspective in helping you cope with the uncertainties of the external world.
Internal Knowledge
Most of FBS’s technology and services, though, are concentrated on measuring and managing the internal business processes of farming operations. That creates these challenges:
1. Outside of very general mandatory reporting, nobody “makes” you follow sound business and accounting practices.
2. Few standards are widely available for categorizing, prioritizing, benchmarking and making objective decisions from internal farm data.
3. Most of the record-keeping/accounting tools used on-farm are way too generic or unreconcilable to generate useful and timely management information.
4. The accounting education and training delivered through traditional sources such as the Extension Service are lagging the needs of modern agriculture.
5. Many progressive farm businesses have grown to levels of complexity that can’t be easily managed using conventional tools and practices.
6. While the best-managed operations do generate good-quality information, it’s rarely available quickly enough to make timely, quality decisions.
7. A majority of farmers rely on someone else’s "plugged" cost assumptions rather than their own numbers.
8. Quality control (and the entire validity of data) is hit-and-miss.
Throughout the next year we’ll be puncturing myths and challenging your assumptions about your accounting and business practices. While the process may be painful, the results will help you know as well as grow.
“An ignorant person is one who doesn't know what you have just found out." - Will Rogers
Norm Brown
The opinions expressed in this article are the author's own and may not reflect the opinion of ASAC or its members.
Posted by Don Tyler
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