Managers must consider marketplace trends, or the business will be at risk.
At this point, you’ve developed a list of strategies that will drive the ranch to achieve its vision. But before implementing mass change, it’s necessary to determine which strategies will be most successful while benefiting the operation.
This is where scenario planning comes into play. Scenario planning anticipates future industry trends and evaluates how strategies fit within those trends.
Regardless of the strategies, if managers don’t consider future marketplace trends, the business will become reactionary instead of proactive – which may mean the difference between capitalizing on an opportunity or being thwarted by it.
That’s the situation Garrett Thomas, manager of Doguet’s Diamond D Ranch in South Texas, was facing.
“With the drought and low calf market, our business plan had to adjust,” Thomas says. “We’ve tried to come up with a new game plan in reaction to the things that are happening right now.”
He’s learned the valuable lesson that no matter how solid the plan, flexibility is equally important. In the face of persistent drought, volatile commodity markets and a weak economy, the bestlaid plans don’t always bear fruit.
“We’ll try and go through more of these scenarios, but initially we didn’t plan for this, or even consider this a possibility,” Thomas says. Looking forward is a component of a successful ranch manager. This can be accomplished by looking at past trends and historical cycles. It’s also important to anticipate which trends and issues may affect the industry in the months and years ahead.
The goal for this planning stage is to look forward at the ranch environment and identify multiple scenarios that may need to be addressed. The entire process needs to be very thoughtful, says Barry Dunn, executive director of the King Ranch Institute for Ranch Management, Texas A&M University- Kingsville. “Picking quality sources of information is really important, whether it’s online or in person,” he says.
Describe multiple scenarios. To begin scenario planning, brainstorm a list of possible situations that may impact the beef industry and/or ranch. Ask yourself, “What if this happens?”
Select and evaluate the most probable scenarios.
From the list of multiple scenarios developed in Step 6, reevaluate the list and select those (2-4) that are most likely to occur. Be sure to consider which scenarios stand to exert the largest effect on your ranching operation. This isn’t a process to evaluate all possible events or opportunities.
If your SWOT or gap analysis discovers that grazing is an operational weak area, it may be one to consider in scenario planning. Or, if one of the existing gaps you identified is the advancing age of the leadership team, perhaps labor or estate transfer are topics around which to build a scenario.
Once the scenarios are chosen, begin to collect information about them. Such sources may be articles from the popular press, websites, informational meetings you’ve attended, or conversations with trusted friends and experts. The goal is to gather information that will help in the decision-making process.