By Rick Machen
Rick Machen of the King Ranch Institute for Ranch Management is a big believer in what he calls a “systems approach” to making decisions on the ranch. He spoke to Farm Director Ron Hays about his theories on this style of management and says one of the keys to running a successful enterprise, is to know and understand what your major expenses are and where it is most effective to cut costs. He says controlling those expenses can make a significant difference to a rancher’s bottom line.
“Those big three costs that always come to the top are feed, labor and depreciation,” Machen said. “As we think about leverage points, we need to be looking at those big ticket items because small changes in a big ticket item make a big difference.”
Another obstacle producers must overcome, Machen says, is what he refers to as “mental-models.”
“That’s those beliefs and biases, prejudices that we have,” Machen said. “But if there are beliefs, mental-models that we hold dearly, that we’re unwilling to let go that conflict with those leverage points, then our systems thinking effort has been maybe all for not.”
Machen says that can be the toughest obstacle sometimes when solving complex ranching problems - admitting to having those biases.
“We’ve never done it this way or we’ve always done it this way,” Machen said. “Those are huge mental-models that stand in the way of progress. Even though it worked in the past and was a solution in the past, it may not be a solution for the challenges it faces us with today.”
Click here to see more...