Aresource inventory and SWOT (strengths, weaknesses, opportunities and threats) analysis clearly defines an operation’s starting point. By defining the vision, it gives the business an opportunity to continue progressing, as a common business truism states: “If you feel like you’ve arrived, you’re probably headed downhill.”

At this juncture, it becomes pretty clear that gaps exist between the current situation and the desired vision. The next step is to identify these gaps and brainstorm strategies necessary to close the gaps.

An example of this process can be taken from the Padlock Ranch. Marketing more than 11,000 calves/year with 55 employees requires a strategic plan, which Wayne Fahsholtz, president and CEO of Padlock, implemented in 2004.

Part of Padlock’s vision embraced long-term sustainability by producing a quality product superior to that of competitors. One of the steps taken to achieve that was implementation of individual animal ID.

Fahsholtz explains the thought process behind the decision. The first was the BSE situation at the end of 2003.

“It looked to us that we would probably have mandatory ID across the nation,” Fahsholtz says. “We wanted to be ahead of the curve, understand how it was going to work and make sure it would work on our ranch.”

The second impetus was drought, necessitating liquidation of some cows and heifers. “We felt by having them individually identified, it might give us a marketing advantage,” he adds.

They started by identifying cows, both to test the technology on the ranch and make better culling decisions. Within a year, all of the calves were identified.

“It became evident that there was a demand for source and age verification,” Fahsholtz says. By implementing this strategy, they’ve generated sales up to $58/head through age and source verification.

This is just one example of how identifying a gap and developing a strategy can position a ranch to take advantage of market volatility. An important question to ask during this process is: “To get to my vision, to close the gap, what strategies might I undertake?”

Steps 4 & 5:

Conduct a GAP analysis and identify strategies to close the gap.

A gap analysis requires answering:
• How does your vision compare with the current status of the business?
• How does the desired vision fit with available resources?
• How does the business measure up to current industry benchmarks?
• How different is the current culture from the required one? Ranch culture can be thought of as the way the ranch traditionally operates. For example, ranch work may have always been done on horseback, or the operation may have always raised a specific breed of cattle.

To conduct a GAP analysis, experts recommend looking at ranch resources from six different perspectives that contribute to the viability of the ranch business. First, ask yourself where gaps exist in each of the following categories: Learning and growth, natural resources, agricultural commodities/production, customers, financial and ranch lifestyle. Second, ask yourself: “To get to the vision, what strategies will help close this gap?”

These six focus areas will be considered again during the evaluation of the strategic plan. Brainstorming strategies lays the foundation for implementing the strategic plan.

What’s the difference?

Is there a difference between a “mission statement” and a “vision statement?” Yes.

A mission statement defines the ranch’s purpose and primary objectives. It talks about what the business is now and the fundamental reason for which it was formed.

A vision statement describes what the business wants to become, shaping and directing the business’ future. Often, a vision statement will motivate and energize others to buy-in to the vision.

For example, a cow-calf producer’s mission statement might go something like this: “We are a southeastern beef cow-calf operation that also runs stocker cattle on our abundant natural resources.”

The same operation’s vision statement might be: “We are continually adding value to southeastern cattle to fit our family’s ranching lifestyle in a meaningful and profitable manner while improving the ecosystem for the next generation.”