The pork industry, like all of animal agriculture, has seen dramatic economic variability over the last few years. Our economy’s continuing lethargy and the likelihood of future volatility tell us this is no time to get complacent. 

Quite the opposite, indeed; these and other facors mean that moving forward in agriculture and our economy will require “going to a new level.” Taking your management to a higher level is key to making this adjustment for your business.

One of Albert Einstein’s famous quotes is “The significant problems we face cannot be solved with the same level of thinking we were at when we created them.” This quote applies today in the sense that management must implement changes to deliver even more efficient and quality-focused operations.

Perhaps the greatest challenge for agricultural business owners and managers is their changing role and priorities. Historically, the priority has been production and, for some, marketing. Today leadership roles are becoming equally, if not more important than the management roles.

In many cases, a pork production business cannot have individual full-time positions for chief executive officer, chief financial officer and one or more chief operations officers. Still, one lesson of the recent turbulence is that each of these roles is vital to a pork production business’ success. This means the business’ owners/leaders must identify the team (internal and external) that will work together to lead the business into a successful future.  

Let’s look at the key leadership roles of CEO and CFO. Your business may not have these titles, but someone must fill these roles.

Chief Financial Officer: This individual must completely understand the business’ current financial condition and find every opportunity to reduce financing costs and maintain/improve relationships with lenders and creditors. Without sufficient priority for this role, many pork production businesses may not have a clear awareness of the current financial situation.  

Here are some recommendations for the CFO position: 

  • The individual given this role (whether internal or external) must understand financial and managerial accounting and analysis. He/she must continually monitor and assess the financial situations, execute financial transactions and debt payments to minimize interest and transaction costs, and constantly be in communication with lenders and creditors to maintain and enhance the relationship. 
  • The magnitude in numbers and dollars of the loans and accounts payable in businesses today is unprecedented. The person in this position must search for and capitalize on cost savings opportunities by strategically allocating the available dollars.
  • This person must communicate the current financial situation and what each person can do to improve it.
  • He/she must routinely make realistic projections into an increasingly uncertain future and share them with other owners.

Chief Executive Officer: This individual must develop and communicate the vision for the business’ future success and lead the team to fulfill that vision. The CEO is the business’ key leadership role and its absence has been devastating to many businesses during recent challenges.

Here are some of the CEO’s specific responsibilities:

  • Identify the leadership team and each member’s role.
  • Establish the team’s operating rules and develop a culture of synergy, collaboration and excellence.
  • Communicate to every pork production business member the magnitude of today’s challenges, and enlist their support and extra effort to succeed.
  • Establish collaboratively the expected performance for all leadership team members and hold them accountable for achieving those performance levels.

The CEO must always:

  • Understand the external environment — the overall pork industry and business environment.
  • Seek and capitalize on opportunities to enhance income and/or reduce risk by contracting product and/or inputs.
  • Ensure that performance management programs are in place and are used to motivate employees to perform to their potential.
  • Ensure recruitment and selection procedures are in place to attract the best possible candidates to positions.
  • Ensure that world-class production and marketing procedures are in place.
  • Provide leadership in designing and implementing the operational plans and procedures to take the business to a higher performance and cost-control standard.

Your business may not need a full-time CFO or CEO, but the person in each role, if involved in day-to-day operations, also must give these roles priority.