Growing In The Green: December 2006
By Melhem Sawaya
By Melhem Sawaya
Strategies for success: serving current and future customers. The more we help them get what they want – a quality product – the more we get what we want, and that’s a healthy profit.
With the new greenhouse industry environment, a new business plan is a must, and what is more important is to know the strategies for applying the business plan.
For strategies to work, there are a number of key requirements. If a company fails to meet them, its strategic planning program is likely to be meaningless or even incorrect. These key requirements are:
• What kind of business are we in? Why are we in the business? Are we pushed into it by our parents or maybe never even thought of it.
Actually, the main reason for going into the business is to make money. The only way we can make money is by successfully enticing other people to spend theirs. Therefore, our main consideration should be to produce desirable products to beautify people’s gardens and homes.
Noted motivational speaker Zig Ziglar said it best when he stated that “you can get everything in life you want if you help enough other people get what they want.” The more we help our customers get what they want – a quality product – the more we get what we want, and that’s a healthy profit.
• Plans are intended to guide us in the future. A prerequisite of the assessment of the future environment is forecasting.
• If strategies are to be developed and implemented, an organizational structure which assures effective planning is needed. In other words, your operation has to be broken down into specific departments and each person given a specific area, or areas, for which he or she is responsible. This fosters increased accountability and interest in the operation on the part of the employee.
• One of the important requirements of effective strategic planning is to make sure the strategies are consistent, that they ‘fit’ each other. Because every strategy must operate in the future, and because the future is always subjected to uncertainty, the need for contingency strategies cannot be overlooked. For example, if you have expectations to sell 10,000 flats or bedding plants, but your regular customers only take 9,000, then you need a contingency strategy of where to sell the last 1,000 flats.
PRODUCT OR SERVICE STRATEGY
To develop strategies in any area, certain questions must be asked in each major strategy area. Given the right question, the answer should help any company formulate its strategies, and product and marketing issues are no exception. Some of the vital questions are:
• What is our business, what is not our business, and what is our industry?
• Who are our customers? We know the purpose of any business is to create a customer to fulfill a consumer need.
• What do our customers want? Do they want price, value, quality, availability or service?
• How much will our customers buy and at what price? This is a matter that involves knowing the things that customers consider as being of good value and what they will pay for it. This will determine what a business is, what it should produce and whether it will prosper.
• Do we want to be a product leader?
• Do we want to develop our new products?
• What advantages do we have in serving customer needs?
• What of existing and potential competition?
• How far can we go in serving customer needs?
• What profit margins can we expect? A company naturally wants to be in a business where it can make an attractive profit.
Marketing strategies are closely connected to product strategies and must be supportive and inter-related. A business can hardly prosper without these. In the greenhouse industry, marketing is something that hardly exists and it is a field that is very important if we want to be a growing and profitable industry. We have been lucky so far that there has been increasing demand for our product and that is the only reason we are surviving. But it will soon be time to start marketing our product more effectively.
Here are some questions you need to answer to establish your marketing strategy.
• Where are our customers and why do they buy? This question is really asking whether customers are large or small buyers, where they are geographically, and why they buy.
• How do customers buy?
• How is it best for us to sell?
• Do we have something to offer that competitors do not?
• What is the best pricing strategy and policy for our operation? And by this, I mean some policy other than the traditional, “if the competition is asking $1, then I will sell it for 90 cents.”
Thus far, much of the emphasis has been on the development of clear and meaningful strategies. If strategic planning is to be operational, certain steps must be taken to implement it.
Strategies should be communicated to all key decision-making managers. Planning ideas must be developed and communicated, which again means working closely with your employees.
Action plans must support and follow major objectives and strategies. For example, an action plan could be your seeding programs for the bedding plant crop to support and follow your main objective of producing bedding plants on time and fulfill the main strategy of delivering plants to the customer when required.
Strategies should be reviewed regularly. Consider developing contingency strategies and programs. Make your organizational structure fit your planning needs. The organization should be designed to support the accomplishment of goals and the making of decisions to implement strategies.
If possible, it is best to have one position or person responsible for the accomplishment of each goal and for implementing strategies in achieving this goal. In other words, end-result ideas and key tasks should be identified and assigned to a single position as far down the organizational structure as is feasible.
Once a successful self-made man was asked, “if you had to start all over again, what you would change?” Without hesitation he said, “I would ask for help.”
By getting your employees to help in the implementing of strategies, you will get two very desirable byproducts; first a more valuable and devoted employee, and secondly, more time for yourself.
Continue to teach planning and strategy implementation. Create a company climate that forces planning. For example, set up a suggestion box and plan of action to accompany every idea. Host regular meetings to discuss ongoing and future strategies.
Strategic planning has been proven over and over again to have a bottom line impact. In fact, I do not know how a greenhouse operation or any other organization could be successful over a period of time without careful planning. Careful strategic planning and programming is important for not only financial success, but also, as we’ve seen, for successful employee development which frees owners from bearing all of the responsibilities alone. Therefore, they have more free time to spend with their families.
Important resources in a family-operated business are the children, but this resource is often neglected. A doctor friend wanted his son to follow him in the field of medicine, but his son, although capable, wasn’t interested. When the father asked him why, his son answered, “why would I want to go into a business which has consumed all of your time to the point of almost complete exclusion of my brothers and sisters and myself, and our mother.”
Sometimes in the hustle and bustle of a business, the very people we are doing it all for are sometimes forgotten. I wish we had more space in which to go through a practical process of planning strategies and a program for profitable operation. But since space is limited, I am going to share with you some of the outlines we would use to program a bedding plant crop. We start by putting down the steps that are needed to establish this program, which could be like this:
• Variety revision and comments and establishing new varieties – June 15th.
• Establishing the percentage of varieties – June 22nd.
• Establishing production amounts and container size – June 30th.
• Seed ordering schedule using your own germination factors – July 8th.
• Send quotes to suppliers to receive a price back from them by July 20th – July 8th.
• Adjustments and preliminary seed order (10 per cent, plus or minus) – July 27th.
• Crop transplanting schedule and allocation in the greenhouse – Aug. 10th.
• Label orders – Aug. 13th.
• Plug schedule – Aug. 17th.
• Booklets of bedding plant information to all growers and labour foremen – Aug. 24th.
• Last seed order revision and adjustment – Oct. 23rd.
• Final discussion or changes – Nov. 4th.
Note: Every job is assigned to a certain person. We should believe that in any job, one person is responsible, but we all work together.
As you can see, this is only a little program that would support the product strategy that fits into the planning process that is successful.
One very important factor for this whole process to succeed is that it depends on people. Qualified people are necessary, but I believe they are not abundant. I believe horticultural technical schools are having a rough time surviving because of lack of funding due to lack of enrolment.
Universities, unfortunately, put the greenhouse horticulture industry on the back burner, with no heat on. To the best of my knowledge, there is not a single program in the university system that is even 50 per cent directed towards the greenhouse industry. We ask about the reason. The answer, we’re told, is a lack of interest. I ask the people responsible of the last time they tried to create a plan for providing highly developed graduates to enrich the greenhouse industry.
However, there doesn’t seem to be such a plan.
When governments and ministers of agriculture are asked the same question regarding a plan to produce qualified greenhouse personnel, we wonder what they think. Do they think the plants produced under cover grow on their own, or is it simply that greenhouse operators as a group are not large enough to have to worry about their votes?
When I make these statements, I am simply voicing a concern that is shared by the majority of greenhouse operators and I hope it does not land on deaf ears. We, the growers, educational institutions and the governments should put a ‘plan’ together with definite strategies and applied programs for the goal of ensuring a successful greenhouse industry.
Finally, I do believe and trust in the people in this industry. Zig Ziglar wrote some words of hope for all people, which I’d like to paraphrase by saying that this industry is run by people designed for accomplishment, engineered for success, and endowed with the seeds of greatness.
Melhem Sawaya of Focus Greenhouse Management is a consultant and research coordinator to the horticultural industry. Comments on this or any other article are always welcome by e-mailing him at email@example.com.