Constraints Are Self-Imposed
Most small and medium scale producers who want to increase profit would be well served to challenge their assumptions about scale. Small isn’t beautiful and it is almost as much work as big. It doesn’t take twice as much labor to run 800 cows as it does 400. The interest and depreciation on your pickup truck isn’t dependent on the number of cows you carry. Whether you have 80 cows or 800, you still only need one pickup. Let’s say that the interest and depreciation cost is $4,000/year. That comes to $5 per cow for the 800 cow outfit and $50 per cow for the 80 cow place. This poses additional challenges to earning profit for the limited scale producer.
A lot of us assume that, because we only own so much land and it may be hard to rent in our area, our land base is the limiting factor determining the size of our operation. We know that for the sake of our land, livestock and profitability we must not overstock our land. But if we don’t want our land base to limit us, it doesn’t have to. We can lease cattle to other people or contract with someone to custom graze for us. As Stan Parsons says, “Constraints are self-imposed.”
I liked the article. It was just too short. Constraints are self imposed, that is a good message. The limitations appear to be seeing one's property boundary as the boundary of the operation. So, look beyond a self imposed boundary might be a "solution suggestion". How to gain a creative or alternative view point preceeds gaining alternative suggestions or perspectives. So, the first inhibitor is one's self imposed constraints, the solution is creative thinking, looking outside of the boundaries for opportunities, rearrangement and expansive thinking to think beyond our boundaries be those conceptual, land based, or family limited. So, how does one foster creative thinking which leads to lowering the fences on our self imposed boundaries? This was a good article and fosted my own thinking about some "problems" within my operation. A specific "problem" is the second pickup truck. We do, sometimes, need two pickups, but not all that often. I began to consider using the funds for a second pickup for a smaller tractor which might help the operation more than a pickup with regard to hours of use and purchase. This lead me to consider the rental option which we do at different times for tractors and trailers so we do not have to buy them. Then I thought, maybe we could lease a pickup which would drop the annual fee against a purchase price, but still give us the ability to have the machine which we use primarily during haying, and shipping, and the occassional trips to town for heavy hauling. The key here was opening my view and moving parts and looking at relationships of cash flow, use hours, actual use applications, annual expense versus a one time purchase price, availability and application of machinery.... The key, which came from reading the article, was open up one's view and let go of constraints, and look more closely while also widening one's perspective.
Thank you for your help and ideas.
George Kahrl, Sarah Faith Ranch, Winifred Montana
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Good example. I agree that getting creative is important, but there's something that has to come before that...a willingness to consider creative options.
Sometimes we impose constraints on ourselves out of a sense of responsibility. Perhaps we have elderly parents who need help and we feel obliged to stay home as opposed to going where pastures seem greener. Just as often, we impose constraints on ourselves because we find safety in the status quo (even if the status quo doesn't work) and we fear change. That fear usually emanates from two things. The first is a fear of loss. When confronted with change, rather than exploring the up-side of an opportunity, we almost always start by thinking about the down-side. We look at all the things we will lose (even if the loss is just the comfort of knowing the old way of doing things).
The second thing driving our discomfort is fear of the unknown. It isn't fear of failure because if we knew something would fail, we wouldn't do it. The problem is that we don't know if we will fail...it is fear of the unknown. Our 7 step Ranching For Profit economic planning process helps make the unknown more known, thereby taking a lot of fear out of change. (If you knew the worst result of a change was better than the best result possible from the status quo, you might actually be excited by change.
You are spot that overcoming constraints requires creativity. Unfortunately, once we impose constraints we are unlikely to bother looking for creative options. That's a huge problem. I remember a rancher at one Ranching For Profit School several years ago who needed to expand at least 3x to meet his financial objectives. He had elderly parents who needed care and had committed to stay home for them. I remember this clearly because you could tell from his voice and body language that he was felt enormous stress from the financial situation and the sense of obligation. IN fact whenever he spoke about the situation tears would well up in his eyes. When told he needed to expand, he'd respond shaking his head and insisting, "It is impossible to lease land in my area." Against his judgment, his team brainstormed creative options for getting leases in areas where it was "impossible." He rejected them all.
Less than a year later he called me to give me an update. At first I didn’t recognize his voice. It was filled with positive energy. He told me that he had expanded his land base over 3x with long term leases. The two ranches he had leased (using one of his team's strategies) were contiguous to his parents' ranch. Funny how people find ways to do impossible things. It starts by challenging the constraints or at least challenging the notion that our constraints are as limiting as we've made them out to be.
We assume that we can only do one or the other. We'd be better served to substitute "and" for "or and ask, "How can I do this and this?" Constraints are self-imposed.
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