Rick Machen of the King Ranch Institute for Ranch Management is a big believer in what he calls a “systems approach” to making decisions on any ranching operation. He spoke to Farm Director Ron Hays recently about his theories on this style of management and says one of the keys to running a successful enterprise, is to know and understand what your major expenses are and where those costs can be trimmed. He says controlling those costs can make a significant difference to a rancher’s bottom line.
“Those big three costs that always come to the top are feed, labor and depreciation,” Machen said. “As we think about leverage points, we need to be looking at those big ticket items because small changes in a big ticket item make a big difference.”
Another obstacle producers must overcome, Machen says, is what he refers to as “mental-models.”
“That’s those beliefs and biases, prejudices that we have,” Machen said. “But if there are beliefs, mental-models that we hold dearly, that we’re unwilling to let go that conflict with those leverage points, then our systems thinking effort has been maybe all for not.”
Machen says that can be the toughest, sometimes the grandest challenge in solving complex ranching problems - admitting to having those biases. Now, how does one identify a mental-model? Machen insists there are two phrases two look out for.
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