Recordkeeping, Benchmarking and

the Bigger ‘Sustainability Picture’Ontario Sheep Farmers Convention | 26 October 2017 | Alliston, Ontario

Good record-keeping is knowing what you have, where you have

it, and how long you should keep it.

Outline

Background and Context

Risks & Opportunities: Why Record and Benchmark

Materiality & Value: What to Record and Benchmark

Informing Strategy

Consider…

Materiality: What is relevant to the enterprise?

Benchmark: What can realistically be measured?

Waste: Anything that consumes time or resources

but does not add value to the product/service

About

Focus

Sustainability Planning & Implementation

Succession Planning

Change Management

Through Collaborations and Projects

Harnessing the collaborative power of our members to accelerate widespread adoption

of sustainable agricultural practices.

Sustainable Agriculture Initiative Platform

Learning and sharing

in a safe & pre-competitive space

Created in 2002

by the food

industry

90+ members

Tools and Guidance

> Arable &

Vegetable

> Fruit & Nut

> Dairy

> Beef

Global with

multi-stakeholder group

Working Groups:

FULL MEMBERS*

AFFILIATE MEMBERS

*In SAI Platform statutes: ‘Active members’

Farmer Co-ops Traders Processors Manufacturers Retailers

Engagement along the supply chainenables translation and transfer of value… usually as information

* not actual situation; example supply chain only

Nearly 60% of businesses in North America and Europe know that information is important to gaining a competitive advantage.

Waterhouse Cooper (PwC)

Information volume for most businesses doubles every 18-24 months.

McKinsey & Company

Beyond Traceability…

Recordkeeping is understanding your assets

A tool to better business:

1. Meet traceability/food safety requirements

2. Limit liability

3. Increase profitability

reduce cost

save time &

resources

identify waste

increase market access

What Areas Should I Understand?

Enviromental

Soil Condition

Water Use

Nutrient Management

Waste Management

Biodiversity Impacts

Air Quality

Social

Health and Safety

Labour Conditions

Economic

Financial Stability

Market Access

Legal Compliance

“What gets measured, gets managed.”

Peter DruckerFather of Management Theory

What can our records tell us?

✓ Internal comparison and industry comparison

✓ Identify trends

✓ Highlight problem(s)

✓ Recognize limitations

✓ Discover potential strategies to explore

Why keep financial records?

Performance Improvement (waste eliminating)

Lenders & Investors

Including succession/transition planning

Accountant

Government

Canadian Revenue Agency (CRA)

Assistance programs (OMAFRA, RMP, etc.)

Why keep detailed financial records?

To know which enterprise(s) are making (and maybe more importantly) losing money.

To track income and costs for a cash flow projection or lender.

To plan long-term to meet vision

Pass farm to daughter/son

Sell farm to neighbour

Increase business and acquire/expand enterprises

It’s difficult to start, but not difficult to do.

Using Your Records: Benchmarking

Why Benchmark?

19

Identify and assess gaps

Determine

range of needs

Determine priority needs

and implement change

Plan for re-assessment

and improvement

measurements

Setting Benchmarks

Develop SMART Goals

•Define goal

•Who is involved? What is being accomplished? Where is being done? Why am I doing this? Which resources do I need?

Specific

•Can I track progress and measure outcome?

•How will I know I reach my goal?

Measurable

• Is it reasonably likely to be accomplished?

Attainable/Achievable

•Does it contribute to my long-term vision?

Relevant

•Does it have a time limit?

Timely

‘SMART Goal’ examples…

By 2025, my farm will be 20% more profitable than now (2017)

By 2020, I will net 5% more per pound than now (2017)

I will diversify my markets by one new one each year for the next five years

My daughter will take over 60% of the decisions and 80% of the farm labour in

three years

Step #1:

Consider information an asset

Putting a dollar value on information can be difficult - it’s easier to

view it as a cost.

Give thought to how information can:

Drive your business,

Differentiate your company from its competitors, and,

When property used, actually help you make money.

If you're going to get value from your information, view it as an asset.

Step #2:

Look for ROI (return on information)

As you start to view information as an asset, it's easier to

determine its potential return.

Evaluate your information access and workflow plans.

As part of this exercise, you can also determine how to

optimize both plans for greater efficiencies.

Maximize ROI by keeping in mind the potential business value

of each type of information asset.

“There is nothing so useless as

doing efficiently that which should

not be done at all.”

Peter Drucker

Step #3:

Take a “smart risk approach”

Reduce information collected to what is material

Some aggregate measures and benchmarks

Some very granular measures and benchmarks

Step #3:

Take a “smart risk approach”

Ask yourself:

1. Is this information for internal or external

comparison/benchmark? (efficiency)

2. Is it to meet market requirements or give

preferential access? (margin/market security)

3. Is it to prove financial worth/business case

(lender/investor)

Step #4:

Apply analytics to answer questions, like:

What can information mean for the future of your

business?

Where is opportunity for growth?

Which efficiencies can you identify?

Which data will help you access key markets?

… what are your questions?

Step #4:

Apply analytics to answer questions, like:

Apply some easy data analytics:

Annual comparisons

Enterprise comparisons

Determine why some activities cost less or return more

and capitalize on these

Comparisons compensating for external variables (inflation,

commodity pricing, market fluctuations, etc.)

This is the easiest way to make

improvement ‘business as usual’

It’s fine to celebrate success, but it is more important to heed lessons of failure.

Bill Gates

… but first you need to know what constitutes failure!

DIALOGUE @SustainingAg

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