Saturday, November 8, 2008

Scaling up without selling your soul - Part 3


3. CLEARLY DEFINED MARKET BOUNDARY


No difference really exists between an empire and an aspiring empire. A one salary sole proprietorship that aspires to be an empire will have the same attitude as the business that already has an empire. The bigger an outfit becomes, the less innovative it is, partly because it’s harder to turn an aircraft carrier than a speedboat.


I confess to being leery of empires because I haven’t seen one yet that seemed fair and honest. Empires tend to bully and abuse in my opinion. When does a business morph from integrity to scandalous? In my opinion, the day it decides to become an empire. If size never registers on your company radar screen, you can become pretty big without selling your soul. But the day you aspire to be the biggest player is the day you begin disrespecting the other players. How about aspiring to be the player that practices hardest? That gives other aspiring players the best hand up to join you in the winners’ circle?


Because local food is foundational to Polyface farm, we defined our market area as within four hours. That’s as far as someone can come, personally check us out, and return home in a comfortable day. Those of you familiar with Michael Pollan’s runaway New York Times bestseller Omnivore’s Dilemma will recall that our farm is the hero. Lots of free advertising. Probably even the honor of speaking here. But it all came because I would not mail him a T-bone steak. That conviction so piqued his interest that he came, saw, and wrote.


Never underestimate the good things that can happen when you establish a business conviction and then stick with it. Believe it or not, people still appreciate outfits that believe in things. What do you believe in?


The emotional freedom that this parameter affords is palpable. Now when someone calls from Indianapolis or Boston, I’m not even tempted to service them. I have a standard answer: “Find your local land healing farmers and patronize them.” I wrote a book, Holy Cows and Hog Heaven, to help people find those good farmers. All my experiences with empires have been negative. And people who run them seem fairly unhappy. Why would anyone aspire to have an empire? In my opinion, if you aspire to have one, you’ve already forfeited a benevolent spirit. Be content to serve well a clearly defined patron group and the rest will take care of itself.


To be continued...

Friday, November 7, 2008

Scaling up without selling your soul - Part 2


2. NO TRADEMARKS OR PATENTS



This idea comes directly from community building and transparency. I have personally invented several concepts and terms: salad bar beef, pastured poultry, eggmobiles, pigaerators. Nothing makes me happier than when people use these words and duplicate the concepts. I hope they become household words.



“But what about competition or copycats?” you ask? I figure that if I can’t stay ahead of the copiers, then I don’t deserve to stay ahead. If you study innovation, the ones who are out in front have already gone through a learning curve. While copiers can shorten the curve or change its trajectory, they still have to go through it. This attitude keeps me lean and learning rather than bureaucratic and superficial. Imagine if everyone had to depend on their own cleverness to stay ahead of the competition. Talk about innovation immersion.



At Polyface, we have a 24/7/365 open door policy. Anyone can come anytime to see anything anywhere. We share our techniques, our models, everything. Is that foolish? By some counts, thousands of farms now copy what we do. Are we scared? No, because every business that copies our model will heal another few acres. We’re much more concerned about healing than competition. A business devoted to healing tends to preserve its patron base. And what a great story.



Yes, we’ve had numerous people misuse or abuse our concepts. But I’ve learned that what goes around comes around. And when a person begins taking credit for someone elses’ achievements, the market will eventually reward the innovator—unless the innovator becomes a graspy, paranoid, close-to-the-chest protectionist who tries to decapitate the competition.



Bottom line: the vulnerability that this notion creates also offers a magnanimous spirit that viscerally manifests Stephen Covey’s plenty vs. scarcity habit in his 7 Habits of Highly Effective People. Most people tend to say they believe in openness but in actuality spend a lot of time protecting their stash.



To be continued...

Thursday, November 6, 2008

Scaling up without selling your soul - part 1


Message from Joel and all of us here at Polyface:


Many successful entrepreneurial start-ups morph into Wall-Streetified empires that lose their distinctives. And in the process, the business chews up and spits out its workers and founders in a mad scramble to dominate something. Does middle ground exist between the calm talking-stick consensus circle of indigenous eastern tribal cultures and the mad scramble frenzy of western capitalism? Or perhaps more to the point in light of recent Wall Street and economic developments, what values are more important than growth? Especially since cancer is growth. At this juncture of our culture’s reality, I would like us to immerse ourselves for a few minutes in an alternative innovative business philosophy.


BACKGROUND OF OUR BUSINESS

I am first and foremost a farmer, but not a very ordinary farmer. In fact, I’m known as a Christian libertarian environmentalist capitalist lunatic. Our family farm in Virginia’s Shenandoah Valley now has four generations living on it. I’m second generation, but the day-to-day operations are handled by my son. Polyface Farm is a diversified, grass-based, beyond organic, direct marketing farm.


We produce salad bar beef, pigaerator pork, pastured poultry and eggs, forage based rabbits, and forestry products. Purchased by my mom and dad in 1961, the farm has gone from a worn out, gullied weedpatch that couldn’t even pay a salary to one that employs 10 people with more than a million dollars in sales. And it’s still experiencing exponential growth. Lush pastures supported by ecstatic copulating earthworms testify to the healing.


While many business folks would consider this a tiny business—and it is—it is considered quite a large farm by USDA sales criteria, which calls any farm with sales above $400,000 annually a large farm. Polyface direct markets everything it produces to a customer base that numbers 2,000 families, 25 restaurants, and 10 retail outlets.


For context, please understand that we don’t do anything conventionally. We haven’t bought a bag of chemical fertilizer in half a century, never planted a seed, own no plow or disk or silo—we call those bankruptcy tubes. We practice mob stocking herbivorous solar conversion lignified carbon sequestration fertlization with the cattle. The Eggmobiles follow them, mimicking egrets on the rhinos’ nose. The laying hens scratch through the dung, eat out the fly larvae, scatter the nutrients into the soil, and give thousands of dollars worth of eggs as a byproduct of pasture sanitation. Pastured broilers in floorless pasture schooners move every day to a fresh paddock salad bar. Pigs aerate compost and finish on acorns in forest glens. It’s all a symbiotic, multi-speciated synergistic relationship-dense production model that yields far more per acre than industrial models. And it’s all aromatically and aesthetically romantic.


As we’ve gone from a single-salary, cute artisanal operation to a multi-family, beyond family, multi-farm business, we’ve struggled to maintain our quality of life and the distinctives that drive sales. And we haven’t always done it well. I’ve seen way too many successful small businesses gobbled up by deep pockets with shallow values. As a result of wanting to stay with the soul of our business story, we’ve developed a list of directives. These would be different for every business, but let’s look at them and at least appreciate that they represent innovative thinking in a western capitalistic business climate. I call these ethics-based contrarian business ideas.


1. NO SALES TARGETS
Setting sales or marketing targets makes a business look at its employees differently, its products differently, and its customers differently. It’s kind of like a church that sets membership goals: the message is no longer as important as getting sign-ups. What we’re willing to compromise to “make the sale” is much greater when a sales target beckons. And how we treat our employees is directly related to achieving that sales target.
Polyface has never had a sales target, marketing plan, or business plan. And yet we’ve seen steady progress over several decades. If the product and service are good enough, customers will come and sales will increase automatically.
Setting goals with soul may sound counterintuitive, but it follows directly the idea that the best things in life are free. Would anybody argue that financial success is better than a happy marriage? And yet where do you see happy marriage on a balance sheet? We all intuitively understand that salamanders with four legs are better than ones with three, and yet chemical companies selling pesticides or herbicides measure success only in terms of sales volume. Their accountants don’t ask for salamander legs.
In your business, set goals that are bigger, more noble, more sacred, than sales targets. How about eliminating employee turnover, or customer complaints? Or number of employee children failing school? What really are the most important things in business? I challenge us all to think bigger than sales. Big causes attract young people. Here’s the question I have to ask myself: “What goals are noble enough to justify my life?” It seems like when I really strive to be good, growth takes care of itself.

To be continued...
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