2012 Scholar, TAS
Business management can make or break an enterprise, but for many the big picture strategy is overlooked in favour of day-to-day operations. It’s an area Michael Chilvers is more aware of than most – on the family farm they run nine enterprises at once.
“Complicating matters is the fact they’re conflicting enterprises, not complementary, and I’d like to see us perhaps cull down that number of enterprises, so specialise. There’s a big cost in over-diversification, so we need to understand where that sweet spot is in terms of diversification, then we can start to introduce some systems to really control our output – so go for quality, predictability, robustness of the production systems,” he explains.
For Michael, better business management is all about putting systems into place.
“We’re trying to leverage management skill basically, so introduce systems to leverage management and streamline the whole operation. I’m talking about defining the key data points that we use to make decisions on a day-to-day basis – things that we do that we think are intuitive, but are actually based on certain data points that we use and we pick up subconsciously".
One of the benefits of a scholarship is the ability to go anywhere in the world to investigate best practice.
“There’d been quite a lot of fuss about South America and I wanted to go there, and the Black Sea Port area has the potential to be a huge export wheat player, so I wanted to go there and gain some understanding of the opportunities and constraints. I was then drawn to the more semi-intensive mixed areas of agriculture in the world, so I just couldn’t say no! I met inspirational people on a daily basis, people that were offering business plans and people that were offering their knowledge and their time and it was just a continual stream of ‘wow’ moments,” Michael says.
While the breadth of travel and experience that comes with the scholarship can be imposing when it comes time to bring together a report, Michael was determined to deliver key points that people can really grab hold of and make a difference in their own business.
“To summarise, systems do introduce rigour into your business and they do introduce accountability, but they’ve got to be designed from within the business. Everyone’s got to be involved in developing them, but the key thing is if they’re well developed and well implemented, they generate value in their own right, similar to the way brands do,” he explains.
Michael says while creating strong business systems can be daunting, the key is to start with what you know, and develop bits and pieces as you go.
“Bring other people in to help you, bring your advisors in, your agronomists, people that know about systems, get them involved as well and just start somewhere, start with what you know,” Michael says.
Now Michael is back home in Nile after his Nuffield experience, he says it’s time to practice what he preaches and work out which enterprises the family is going to rationalise.
“I’d really like to get back to five enterprises – I don’t know if that’s going to be possible just from an economics point of view. But at the moment with nine enterprises, it’s very difficult to put systems around them – perhaps we can build systems around five or six though,” he says.