Case Study - Part One: Meet the Jones
Scene: Your team has just arrived to the Jones farm in the state of Minnesota...
Hello, and welcome to our family farm. My name is Amy Jones, and for the next several weeks, you will be working for us. We are glad to have you here! We've hired your consulting firm because you came highly recommended by your previous clients. It seems that you know just what to do to turn around small businesses that are struggling. So, let me fill you in on who we are and what we do here.
My name is Amy, and I'm the youngest of three sisters. Carol (43) is the oldest, then Jill (40), and then me. I've lived on this farm my whole life. In fact, I was born upstairs in that room there, do you see it? It's the window closest to us here on the porch, with the white lace curtains.
The porch we are sitting on is part of the original farm house, built in 1875 by my great-great-great-great grandparents. Our long-time employee, John, keeps the farm house on a strict maintenance schedule. He insists this is a historical treasure and he cannot accept any deterioration whatsoever. John keeps an upper bedroom suite for himself, but other than him, no one lives here now. We do use the farm house for office space and meetings, and a place for employees to take breaks. Ten of the bedrooms are unoccupied, with much of the original furniture still onsite, and we occasionally use the rooms for overnight guests. It's very peaceful here, which is probably why we have so many visitors!
You might be impressed to know that this piece of property has been in our family for 150 years. It wasn't long after this state was founded that our great-great-great-great grandparents purchased 160 acres for the bargain price of only $1.25 an acre. Our family has passed the farm to the daughters of each generation, until today, where it belongs to my sisters and me. My mother was running the business affairs up until about 2016, but she decided to retire and move to Arizona with dad. They'd had enough of the cold weather and enough in their bank account, I guess.
The kitchen here in the farm house was upgraded several years ago by my mother, and I do most of the cooking in it. My grandmother wrote a wonderful Jones family cookbook with recipes several generations old, and I try to prepare homemade meals and desserts for staff and friends whenever I can. My grandmother always joked that a well-fed staff is a happy staff, and I have to say I agree with her.
What exactly is our business, you ask? Well, for many decades our family worked this land for the purposes of local sustenance; selling wheat, potatoes and corn on a small scale, and raising both chickens and cattle, until the great depression hit and the family couldn't collect enough money locally to stay afloat. In response to this, my great-grandmother had the idea to focus mostly on corn and cattle so that they could take advantage of core competencies, and keep overhead costs as low as possible. She really was a visionary leader and wrote a strategic plan that included being the first farm in the area to sell our corn in large orders to the city mills. This is what we continue with today - our farm runs almost exclusively by raising cattle and growing corn. This has been more difficult in recent years, which is why we're meeting with you today.
It is Carol who could be called the chief executive officer, as she took that baton from our mother and great-grandmother. She has a master's degree in business administration, and she's very serious about making sure our business continues to operate as it should. I've heard her ream into men twice her size, especially when it comes to the important stuff, like corn prices. When she's at work, she means business, and she's always at work, so she always means business!
When I call Carol the chief executive officer, I mean that only informally. We've never really had a formal leadership structure, though when you talk with Jill, she'll tell you why she thinks that is a mistake, especially because there's no clear accountability structure.
Jill informally handles the human resources for our family business and is in charge of all hiring decisions, personnel issues, and payroll. Though she has a degree in human resources management, we tease her that human resources is her specialty because she has so many children! She and her husband Blong already have four children under the age of seven, with another on the way.
Blong, Jill's husband, is Hmong American and he's worked here, since graduating from college with a degree in agriculture science. He and Jill began dating shortly after he came to work here, and the rest they say, is history. They plant several personal gardens on the west side of the property near their home, growing traditional Hmong herbs as well as many vegetables. Blong especially likes to tinker with plants that aren't usually found in our northern climate, and he's been able to grow some very unique plants. We have tried to talk him into finding a market for some of his more exotic vegetables and herbs, but he says he doesn't have time for that, not with the way that the cattle and corn keep us all busy. Blong's parents live with them too, and his mother is the most amazing cook you'll ever meet, apart from my late grandmother of course. Blong's mother is quite the family healer and probably grows an herb for any ailment you can think of, which is great with so many grandchildren around.
As for my role here, I took some college courses after high school, but I really felt out of place in the city so I ended up moving home and helping on the farm. I guess you could say I'm still that person on the farm - if it needs to get done, and it doesn't fit under anyone else's job description, it gets assigned to me. I don't mind. I love to keep busy and there's no place I'd rather be anyhow. I have a small apartment in town but have often thought about moving back into the farm house. Both of my sisters and their families have homes near the farm. Maybe when John retires I'll take his bedroom suite.
The buildings on the farm are wonderful. We have a beautiful newer barn on our property, built in 2008, as well as five other outbuildings used for our farming operations and equipment. John and Blong keep all of them in pristine condition. Funny enough, we've never put animals into the new barn, but we do use it for family get-togethers and things. Jill used it for her wedding in 2010 and it was a blast. We wired it up with speakers, and even purchased a removable dance floor for the occasion.
We also maintain three or four small historical-type structures on the property, such as the old red barn over there near the river. None of us has the heart to tear it down. There are also two field-hand cabins at the southern edge of the property, and an old hunting shack down by the river. The cattle use a 1980s milking barn closer to the rolling hills you see behind us, because then they are closer to the grazing pastures. We don't like to keep our animals cooped up, and also figure if we let them graze near the hills, it preserves our ability to go sledding in the winter. Several years ago, John built a make-shift tow rope for the kids. Every year we invite kids from the local elementary schools to come here for a day of sledding and lunch and we give them a tour of the farm. There's even a little pond at the base of the hills that freezes real nice for ice skating. Our winter visits from the school kids is one of my favorite activities, and if it were up to me, we'd host many more days like that. I'm in charge of organizing that event, and I even give tours in an old pair of my dad's overalls! I guess you could say I really play up the part.
As you can see, most of the land up here near the farm house is used for our private gardens. In truth they are Carol's gardens, and she has both her daughters helping her - they are twins, Rachel and Rebecca, age 17. They grow pumpkins and squash, strawberries and tomatoes, cucumbers and beans, and honestly everything in between. Carol's son Jack, who is 15, also helps in the garden, though you're more apt to find him and his dad Mark, Carol's husband, down on the docks fishing.
Over there is the Mississippi River and it stretches the whole eastern side of our property. Mark, who is quite the craftsman when he wants to be, built a beautiful wooden staircase leading down to the bank. He's a commercial fisherman and can't stay off the water for long. Along with his fishing boat, we also keep a pontoon on the dock for summertime family entertainment. The river is beautiful up here, mostly lined with trees and hills, and it makes for quite a peaceful afternoon drifting with the current. Anyhow, John thinks that Mark should give up the fishing and help him and Blong run the outdoor farm operations, but Mark's never seemed all that interested, so we let him be. John can be a bit grumpy at times, but he's a gentle soul so we don't take too much of what he has to say to heart. He loves the land, and he's dedicated to making any efforts at revitalizing this place a success.
As for the business side of things, the daughters in our family have always been in charge; however we've really made it a family affair with aunts and uncles, cousins, nieces and nephews all taking a place at the farm. Including ourselves, 13 of our 27 employees are family members. Of course we love working with family, but it hasn't always made it easy to manage our staff, particularly because of our differing management philosophies. I tend to think that the less micromanagement we do, the better off the business runs. However, my sisters both think we need to be tougher, because productivity isn't where it was when our parents were running things. So I guess it depends on who you ask.
I suppose you are wondering why we would be interested in changing our business model at all. It's a valid question, because for many years our family business was wildly successful. In fact, you can still see our influence in town - for example, the Jones Library and the Jones Elementary School were both named in honor of the generous donations our family made to the town and those projects in particular. Being gentle to our land and mindful of our resources has been important to us, and as you can see, we have a wind turbine on the back corner of our land. It powers all of our farm operations, and we've benefited a great deal by selling our excess power back to the utility company. I guess you could say we've always had an eye toward social responsibility and we would want to make sure that it continues. As far as environmental sustainability is concerned, we haven't tried any organic farming, but it sure isn't out of the question, in my opinion. The farming industry is definitely changing.
With the economic downturn in 2008, we have found ourselves in a difficult financial situation, and just simply unable to compete with the large commercial farming that now dominates the agricultural industry. Though it has been painful to realize that something needs to change here, we are feeling that, once again, we must reinvent our family farm, as our great- grandmother did so many decades ago.
To put it more bluntly, Carol says that the farm won't survive another decade under our current business model. So, after many late-night family discussions, we are prepared to sell our cattle and our corn equipment in order to fund a new business opportunity. John says our cattle business would be worth about $420,000 at auction and our corn operations are probably worth more, maybe as much as $850,000. We don't need you to be concerned about finances specifically, but we do need you to keep your business ideas within reason. For example, no need to propose something enormous like building a hotel and waterpark complex. $1 million can go fast, so please do remember that we're running a 'small' business here at the Jones farm.
On the topic of finances, I must also tell you about our previous bookkeeper, though it is quite embarrassing for us. This particular bookkeeper had worked here for many years, and unfortunately, mismanaged some of our funds. Mostly, he was not forthright with the fact that our income was not keeping up with our expenses, and he dipped into our personal cushion that our family had saved in order to weather the bad years. Carol views his dishonesty as a breach of business ethics, and is now managing the books herself. We do want to turn the job over to a professional eventually, but we are nervous about this, given our experience. Maybe a code of ethics would help? I'm just not sure.
Ultimately, we want more than anything to keep this land in the family, even though, as you can see, metropolitan development is creeping in all around us. Just this past winter, a new housing project was approved across the road running that puts 350 single-family homes within walking distance of our front gates. There is also a park and another school being built near us that puts us in a prime location to attract renewed attention to our farm, but here's the problem; us sisters disagree with how we should use these factors to our advantage. This is where you come in. As long as you can help us reinvent our business, we can continue to operate. As long as we are profitable within five years, we will be able to survive.
Most importantly, we are open to any new business ideas, if it can be accomplished here on this land, because none of us plans to leave anytime soon. In other words, we want to hear any ideas you might have with regard to a new business idea for our family. We know you are not experts in farming, nor do you need to be. While we would like to keep some of our agricultural roots intact, we aren't afraid of trying something new. In fact, after so many years of working cattle and corn, we are excited about a change. Especially all of the grandchildren, who are willing and ready to take over the business from us sisters one day.
Now, if you'll excuse me, I'll need to get back to my own work now. I have 16 girlfriends staying over this weekend for a canning party. We take over the farm house and have a great time all weekend. I have old family recipes that create the most deliciously spiced concoctions you've ever tasted. I'll even send you home with these jars of our apple cobbler filling. We have about 50 apple trees at the top of the hills, and the apples were wonderful this past year...
Thanks for your help and we'll see you again in a few weeks!
Perform a SWOT* analysis based on the facts given to you in Part One. That is, what are the strengths, weaknesses, opportunities, and threats currently confronted by the Jones family? *SWOT analysis is presented in Chapter 6 of our textbook. Remember on the SWOT analysis Opportunities can be found in the company external environment such as new consumer trends and changes in the market. They can generate business opportunities, but they are not the business opportunities.