Progressive farm outlook with Kristjan Hebert

Shay

Foulk: Welcome back everyone to another episode of the Ag View Pitch. Today you have Shay Foulk coming to you with a well-known producer out of Canada, but more important, Christian, a lot of the work that you do kind of across the country. You spoke at Top Producer here. You got a lot going on in your business tonight, and I just wanted to pick your brain here for a little bit on, you know, what's going on in the industry right now. What are some of your hot topics that you have, um, that you face not only as a consultant but also as a farm operation. And, and glad to have you on. Thank you for joining us today.

Kristjan

Hebert: Yeah, I appreciate having me. It's, uh, it's always, it's always interesting to get on podcasts and just talk about not only topics of the day, but I think, uh, some of the age-old issues that agriculture has and, and hopefully how we're tackling them a little different.

Shay

Foulk: Yeah, there's nothing new. It's always just something that's rediscovered, and sometimes there's a you know, painful lessons that we have to learn. And sometimes there's things that we have some pretty new and unique solutions to. So I was hoping maybe just for a minute or two here that you could give a little feedback on, you know, where you're located, kind of what your operation looks like. I'll let you take it from there.

Kristjan

Hebert: Yeah, for sure. So I'm just south of Moose Jaw, Saskatchewan. So for the US listeners, that's exactly 2 hours north of Minot, North Dakota. So I fly out of Minot lots of times when I'm headed to the US. Yeah, we've been growing pretty quickly the last 10 or 12 years. I think when I moved home in '08, we were about 3,000 acres. My parents had 3,000 and my wife and I were renting 1,500. And that's, that's when I finished my CPA. So as I always tell everybody, I'm a recovering accountant. This 2023 crop year will crop right around 32,000-33,000. I got a consulting company called Maverick Ag that my CFO Evan Schout runs.

And it does consulting for large farms and also kind of some of the multinationals, banks, and, you know, companies like John Deere, Bayer, Corteva, etc., just hopefully, you know, getting our message across of where agriculture is going into their long-term strategies. And just recently here, kind of 6 months ago, we launched Farmer Coach, which is an executive program for farmers. I go to one called Strategic Coach, actually, it's for entrepreneurs, and just found that there's a lot of farm managers looking for the same thing, but wanted it more kind of farm orientated, especially around how to understand, you know, farm financials and debt leverage and HR on farms. And so that's, that's keeping us busy too.

And, you know, I guess lastly, we just kind of launched our own foundation called the Deep Roots Foundation that we're focusing completely on, you know, the rural communities that we operate in and the one city, but with a large focus on rural communities, I think a lot of the things that they want us to accomplish in agriculture in the next 5, 10, and 30 years, relies heavily on the fact that we can actually continue to get smart people to live in rural communities and be part of our operation and part of the communities we live in. And so it's definitely something we focus on pretty hard.

Shay

Foulk: I think that's awesome. You know, I heard a statistic the other day for the United States that 80% of the population lives in 30 of the largest cities in the United States. And people like you and me and everybody listening to this, probably we're the little, you know, dark spots on the map when it's lit up at night. And so how do you maintain that talent, retain the rural community atmosphere? And I want to come back to that here. Let's go back to, you know, 2008. So, you know, came back into a good-sized operation. What, you know, what did you put in place in order to achieve the growth that you've looked at over a period of time? Was it your goal to grow this rapidly? And what systems have been really beneficial and helpful for you in your operation?

Kristjan

Hebert: Yeah, so no, I mean, I, if you were talking to me probably in '04 to '08, I'd have told you my goal was to be 8,000 acres. I'm a fan of 8,000-acre kind of pods. And I would say pods as in far distances apart, but groups of land. And that just works really good in our operation for an 80-foot drill, you know, one high-clearance sprayer and two combines. So that would have been my goal at that time. And I had spent, you know, from '04 to '08 working for Myers-Norse Penny, which is like the Keiko of Canada. All in agriculture. And to be honest, kind of one of the main reasons I came home was I really enjoyed the numbers side of it and just understanding finance and risk, et cetera. So we really just set it up that we wanted to be able to say yes to every opportunity that made sense. We weren't going to chase land, but if it came to us, you know, we wanted to be ready.

And so a couple kind of main points I'd say is, you know, Dad and I got through how I look at succession, which is just, kind of joke before, right? It's time, brains, and money. And, and so obviously, you know, I have time, and so does he, and he's got his brains of all the, the, you know, mistakes he's made in the past and the rules that he's learned along the way. And I had my education and pretty good at finance, so we could split that. And, and he had more equity than me. So we just set it up that every acre gets rented, whether it's his or mine or somebody else's, and we both get paid a wage, which we call labor. And then everybody gets paid 5% on any other equity they have on the farm. And then after that, profits are split, but profits are then split on who's managing it and who's taking the risk.

So I mean, right from day one when I came home, I, I had 50% of the profits, and obviously now I'm significantly more than that. But it really did get Dad and I on the same page that the farm could handle both of us. There was going to be lots of ways to, to provide income. And, and the other thing was it wasn't just the farm. Every single business I was part of, we split at the exact same rate. So I just wanted Dad to know when I got up every morning, I'm just doing the right thing. The farm's the linchpin of everything, but some of these other businesses are going to help create what we want to create in the future. And you just need to understand that when I get up, I'm just trying to make us all the most money and have the best longevity. And that probably really helped align, you know, Dad and I.

We had, we had certain times, I would say 8,000, that 4,000 to 8,000 acres was a little rougher because we're both leaders in our own way.

Shay

Foulk: Yeah.

Kristjan

Hebert: And that's just not big enough. I'm sorry for, for two leaders. And then as we grew past that, I mean, like, at $16,000, we both had full-time jobs in our leadership roles. And at where we are now, I mean, I oversee everything, but Dad's still one, one of, if not my best, what I'd call project manager. And is— and really, I call it a project manager, and he'd probably tell you he just gets to do whatever he loves doing every day. So, you know, he still runs a combine, and he still manages all our land improvement division and And so, yeah, like I said, goal alignment was, was pretty important. And just that understanding from my parents of what do you need monthly to retire on, and I'll create a rate of return to create that. You don't, you don't need a check for 1 or 3 or 5 or $10 million to sit in a T-bill. I can pay you those kind of rates, you know.

Do you need $5,000 or $10,000 or $20,000 or $30,000 a month? And I think that was probably one of the better things we were able to get accomplished.

Shay

Foulk: So where did you base that model off of? I mean, you talk about the time, brains, and money, having that 5% return on equity, and then kind of the splits. I mean, is that something you came up with? Did you pull it from other industries? How did that kind of organically come together?

Kristjan

Hebert: I mean, probably part of it is, you know, when I was working on succession plans with the accounting firm, I was just really struggling with, you know, there was the three circles and we'd spend as much time talking about who got fuel as we did, you know, whether or not land rent should be paid. And there was just so much kind of a feeling that the land should be passed on and then we'll have a life insurance policy. And I just, some days I just couldn't get my head around it because I was like, like I said, every business I'm part of takes those three things. And I mean, everyone uses, you know, you can go to accounting and they'll use fancy terms like rate of return on equity and da da da da, but it's just time, brains, and money. Time's who's doing the work. Brains is who's managing it and taking the risk. And money's who's put the money in.

And you have to create return for those 3 groups of people. And they're different returns. But I think as long as you're pretty transparent on who's doing what. So I mean, if I'm running a combine or dad's running an air seeder, we should get paid the same rate. That's just time. That's a labor rate, right? And but who's taking the risk and who's really driving strategy is your management and your brain side. And to me, that's how profits get split. I mean, the best businesses in the world make money because they have great management and great strategy. And then obviously you need access to capital. And whether that's a bank or whether that's your mom and dad or your uncle or your grandpa, I don't care. And in a perfect world, I'd rather it be family money.

And one of my mentors once said, right, if when you're going through a succession plan, if you ever had to pick, would you pick young brains or old money? And my answer back is I want them both. Yeah, because old money that loves farming is, has way better goal alignment with you than the bank does. And they understand that sometimes you can do everything perfect and you get kicked in the teeth, but then sometimes you can do everything wrong and make a boatload of money. But they understand that. And one of their goals, you know, so one thing Dad and I have in common is our land will never be sold as long as, you know, one of us is in control of it and I can bury it in a trust for at least a generation after me. And in a perfect world, in a perfect world, I'd like all our land buried in trusts and held forever.

And I don't care if the my kids or my grandchildren decide not to farm, that's their decision. They need to do what they love. But I just don't think it should ever be sold. And so if it's rented and then great-grandkids get rent for the rest of their life, and that really, you know, that probably helped us a lot too because we are very much aligned on that and the importance of it. Yeah, so that, you know, it's just, I would say we, our niche is we say we solve agriculture's puzzles on our farm. And my CFO and CEO came up with that. And what they basically said is, you know, as a person, I'm, I'm genuinely curious when I'm around people and I like to learn a lot from everybody. But, you know, I'm building my own puzzle, but I steal pieces from everybody else.

And I would say that's where we came up with the time, brains and the money is, is I just saw little pieces I didn't like of other ways to do it. And this was a way that I thought was just pretty logical. And whether it was on a whiteboard or an Excel spreadsheet, both generations could really understand it. And then once the money started getting paid monthly, the rent and the labor, to be honest, nobody even really cared if their management and their equity return got paid monthly because they had more money than they normally ever did monthly. Right. And that it was just, it was just, it just changed their mindset that the farm can actually do this. That was the best case scenario. You know, the tougher ones were when they started paying that monthly and there wasn't enough cash.

Shay

Foulk: Right.

Kristjan

Hebert: But, but to me, that was a great thing too, because it showed two things. One, you're either living on more than you need. And you need to fix that. Or two, you're right, your operation is not big enough to pay out two generations of people, the ones working and the ones retiring. And so I'm not saying that's a bad thing. I'm just saying we got to find new ways to make more money. Got to grow more land or a seed business or consulting, or there's lots of ways, but I'm glad we figured that out now, not 20 years from now.

Shay

Foulk: Yeah. One thing I want to go back to there, you talk about, you know, what happens if we don't have enough cash, but more importantly, what is that monthly need? And I'll tell you, and you know this as well, when it comes into transition planning, that's like the biggest sticking point. And it's amazing because 60% of the operations I'd say that we work with, the senior partner has no idea what they need to live. They have no idea what they want in retirement. How important is it to map that out? And then you and I talked a little bit offline here. If you just do it for a year, you'll have a really good idea. So what are some of your thoughts on that?

Kristjan

Hebert: Yeah, I mean, I'm, I'm a huge believer on, on having monthly draws for everybody involved in the farm. And it's, you know, we even, we still track our hours. So I mean, I track all my hours and so does my dad. And it's, but to be honest, it's the point we track them now to call each other out if we're working too much. Right? Like, we always kind of joke when my hours come into my CEO, or CFO and CEO and my dad, it's, oh, we better not show these last 3 months to Teresa. That's my wife, right? Because she'll call me out on it. But I mean, that's a great discussion when you're having lots of farms argue about, are you working enough? Right? So I mean, I think it should be paid monthly. And if you want to have an exact number, or you want to have it your labor times the rate times your hours, that's fine.

But pay it out monthly and get everybody to understand the farm can do this, because in most cases, they just haven't done it on the farm. And so they don't understand the importance of it. And then like you said, everybody should sit down and just have at least a ballpark, you know, of what you need to live on every month. And then just try paying that monthly for 6 months or for 12 months. And I will guarantee you at the end of a year, either you're going to say, this is pretty awesome, we did a good job of this and there's more money in my checking account than I've ever had, or you're going to find out that, hey, like I had to pay my personal taxes out of that money and I ended up short this month. Oh, well, that means we probably need to bump our January draw because you're right, you know, personal taxes should get paid out of our draw. But that's an easy conversation to have. Yep.

And I just think that it's, it can really change everybody's minds, especially the older generation, that this is possible because the volatility of the cash flow is what always caused them some, some worry, right? And, you know, it's my goal on our farm that other than seed, fertilizer, and chemical, I want every expense to be monthly. I want my burn rate to be a known number 12 months of the year unless I decide to buy seed, fertilizer, chemical. And, you know, we're, We're real close to that. Fuel still isn't perfect. But pretty much everything else, even our rent, we all pay everything monthly. And so it, I just, just knowing my burn rate allows me to create a pretty easy marketing plan. Because there's no surprises, it's $780,000 a month, every month unless I decide to buy seed, fertilizer, chemical. Yeah, and we can tie sales to that.

So I'm big on those just turning into just known numbers every month, the draws, the expenses. Because it's usually the volatility and the unknowns that cause everybody to get a little excited.

Shay

Foulk: Yeah, I wanted to ask you a question here on systems that you use in your operation. We talked a little bit about EOS, you talked about our tracking, accounting. Maybe let's just dive into those three first, you know, talk a little bit about how you guys got implemented into EOS and maybe what that is a little bit.

Kristjan

Hebert: Yeah, so EOS is the Entrepreneurial Operating System, and I'd always been looking for kind of a system to run our business on that allowed us to move at a high speed but still added a little more process into just kind of a willy-nilly farm. And I couldn't really find them. They're all very corporate setups, which I'm sure you've seen too. And then I came upon EOS, read the books Traction and Get a Grip and all the different ones and just really liked it. So we hired an implementer and put it in. It's been one of the best things for our farm that's allowed us to probably continue to grow even faster. I would say that, you know, like I said, the biggest positive is my team is pretty aligned and so they keep pushing me out faster. So that's a positive. And, you know, the negative, you know, which is a positive too. And I think I said this when I was down at Top Producers.

I mean, I always joke that we love hockey, but I don't care what team you're on. We kind of joke that we build a hockey team and I'm the coach and obviously I can't put my skates on. To go score a goal for a hockey team. But the one thing about being the coaches too, there's no— the start and the finish is way longer than it used to be. And I think, you know, as farmers, we really enjoy— you start a field, you end a field, right? You make a crop plan, you implement the crop plan. And a lot of the stuff I work on now is 1, 3, 5, or 10 years in length. And so that's taken some adjusting. But at the same time, I mean, the reason I'm allowed to do that is because my team's done such a good job because of EOS.

Shay

Foulk: Yeah, and you talked a little bit, you know, EOS maybe isn't perfect, followed to the T for farm operations. You know, typically we see farms that are implementing it, you might change it. You mentioned that you kind of run it off of trimesters instead of quarterly. And some of the systems aren't perfect there. But it's probably the best way that we found for progressive operations that just have a lot going on, you know, to add that, add that speed and add that process to what's going on. How about hour tracking? How long have you been doing hour tracking and what do you use for that?

Kristjan

Hebert: I think we've been doing it since the day I came home, to be honest, because we actually pay everybody hourly now. I guarantee a minimum number of hours, so really it is a salary, a type of a salary. But I just really want spouses to see how much extra money they make in seeding and harvest because, I mean, I always feel a bit guilty how much the crew works. But at the same time, you know, if them and their families understand that's what buys the new half-ton or the trip to Hawaii, then we can all we can all agree that there's a benefit. So that's why we track hours. We use QuickBooks Time. I think it used to be called TSheets. And we actually used to use an ag accounting software in Canada called AgExpert, which is similar to some of the ones you guys have. But 4 or 5 years back, we switched everything over to QuickBooks. Is it set up perfectly for a farm?

No, but the automation side just saves so much time for the controller, the input of bank statements, etc., and the ability to move it throughout the organization. So we use QuickBooks for our, for our actual accounting software. A couple other, like, we use Voxer for all of our team communication, same kind of thing as WhatsApp. So all team communication, I don't get any emails or text messages from the crew, it's all through there. And we got specific teams, we have, you know, get the whole team and the office team and the farm ops team and the shop team. And so that way when you have to update somebody, you update everybody on that team. It shouldn't take 10 different phone calls or text messages. Yeah. And then, yeah, we've—

Shay

Foulk: oh, go ahead. We talked about that a little bit at Top Producer. And for those who aren't familiar, it's basically a messaging app service that you can create groups in. It's way more efficient than using just your iPhone messaging or calling everybody, you know, because if we have 10 people on a team that's working in, you know, one of these pods in the business, everybody needs to know what's going on. And so for you to be able to just send them a message, then everybody's on the same page. You reduce confusion. You don't have to make 30 phone calls. And, and by the way, then people know too, from an accountability standpoint, they don't need to be contacting you. They need to be contacting whoever it is that's in charge of that group or that management decision. So you reduce a lot of complexity in communications.

Kristjan

Hebert: Yeah.

Shay

Foulk: Yeah.

Kristjan

Hebert: I mean, even I use something as simple as when I was at Top Producer, we had a, we had a deer get hit in front of our yard. So my wife had just picked it up with a skid steer and she put on Boxer. If somebody happens to be going by, you know, with a truck or a tractor, would you mind doing something with this? And it wasn't 5 minutes and one of my guys was going by with the tractor, stop and pick it up. Otherwise I would have sat there for 4 days till I got home from Nashville, right? And then I would have to deal with it, right? 5 in the morning before a hockey game. So it's something that simple where it just— I need a ride home from town. Is anybody here? I mean, we got 15 people working for us plus their spouses. 9 times out of 10, there's somebody there and it just, you just got to find a way to communicate that.

And so we've really, it's probably the number one technology honestly that we use on our farm. And I get interviewed, we do lots of tech and lots of trials. And so I get interviewed lots about it. Everyone wants this big amazing tech and it's like, well, I think Boxer is probably the number one, one, right? Yeah. That's the one we do use. We're heavy users of MyJohnDeere. Uh, we use it intensely. Everybody has to have it on the farm. We track everything. And then, you know, we, we were past users of Granular. I was on the advisory board for quite some time, but just recently actually we're switching over to Harvest Profit just because it's tied in well to my John Deere and our internal systems we've got dialed in a lot better than I did 10 years ago too. So Harvest Profit kind of fits what we're looking for.

Shay

Foulk: Yeah, that's awesome. Any other systems that you're using or anything else that you think would be good for people to know? Because they, you know, farm operations that are progressive, they want to look at who has these other pieces of the puzzle, like you're talking about, that I can just take and implement that, and you don't have to reinvent the wheel. So is there anything else that you would say, hey, this works really well on our farm?

Kristjan

Hebert: Yeah, so I mean, I, my office team and I use Trello a lot. It's a project, like a Kanban board, project management board, and we're trying to implement it into the ops side too. But it works really good for me because I'm on the road and different offices. But We do mimic it in the ops side. But to be honest, the best thing we did in the ops side is at my, at my farm manager's wall, we painted the whole damn wall a whiteboard. And we drew the farm on there. So every bin and every fertilizer bin's there. And we have a grain marketing calendar there. And that's where they have their weekly ops meetings and outline like the walls full of everything that, you know, the 7-day projects, the 30-day, the 1-year, the we need to look at sometime and every bin's rowed in and all the marketing month by month wrote in.

And, uh, to be truthful, when people tour the farm and we show them all the tech, that whiteboard wall still ends up being one of the number one things that they all write down. In fact, it is the number one thing. And the number two thing is we, uh, we used to— like, we do provide hot meals every day in seeding and harvest. And in seeding especially, we're really getting spread around, so the girls now pre-make them the month before, and we have food warmers like $20 food warmers that go on every piece of equipment. And, and so to be honest, I would say the whiteboard wall and the food warmers are like the number 1 and 2 thing that people write down when they come visit the operation.

Shay

Foulk: Yeah, I like that. Big-ass whiteboard. That's kind of the takeaway that people need to have here. And, and, and truly, you know, people will be like, ah, we had a whiteboard and we tried it once, and it's like, well, it's only as good as the information that you put into it and how frequently you meet. And people, it's amazing. And you see this too. People hate having meetings. And there's 3 reasons for it that we typically see. They don't like confrontation. They don't want to take the time and they don't like what they're going to have to do when the meeting's done, you know, because there's always work to do. But if you build that into the culture and it sounds like you guys have done a really good job, it's just, it's just part of what you do. It's just part of the business. And this is what's expected of you too, by the way.

Kristjan

Hebert: Well, I mean, and conflict's conflict. I mean, like I said, And we go back to hockey teams all the time. And if my leaders on the hockey team aren't having it out occasionally, I'm not pushing them hard enough, right? Because they all have individual skill sets. And when there's a bit of overlap on a project we're trying to get done, that the leaders need to debate that out a little bit and come up with the right solution and then make the decision and move forward. And so weekly, yeah, that's the big thing. EOS is— there's very few issues that don't get dealt with every week at our place. And if they do, it's usually one I need to deal with and I need more information because I wasn't there. So it's like our meetings are Mondays. Okay, we've got 92% of the things decided. There's 2 I haven't decided.

Here's what I need back from the team, and I will make the decision next Monday. And, and I think that's one thing the teams really liked is, as farm operators, especially when we're smaller, father-son or father-daughter are really good at procrastinating decisions. And that's fine for you because you're busy and you always have something to do. But it might have been very important to your team. And so that it can just absolutely kill culture when you procrastinate deciding on things or don't explain why you made the decision on what you did on something that's important to them just because it's not important to you. And that EOS really dialed that in for us, that those issues boil to the top and they get dealt with every week and away we move. And the best thing about being an entrepreneur is that if 2 weeks from now you find out you made a bad decision, guess what?

You can change it. It's your money. Yeah. So we just don't want to stop, right? We're going to keep moving in the direction we think and feel is right at the time. And then we might pivot in 2 weeks.

Shay

Foulk: Can I, can I do a 90-degree turn here? I want to go a little bit of a different way. What are your thoughts on equipment ownership versus leasing? What have you done in your operation and through the coaching, you know, or is there one way or the other that you see as effective at your operational level?

Kristjan

Hebert: Well, I mean, I've done everything. So I mean, we just run net present values on equipment deals every time we get them. And to be honest, I'm not really tied to a lease or a buy. So 4 or 5 years ago, I was leasing everything because they had great interest rates and, and long-term leases. And the one thing too was the hour use. I mean, used to be able to get up here, we could get 600 hours on a sprayer. Then all of a sudden, 2 years ago, they dropped the hours down to 400, made the interest rate bad and tightened up the timeframe. And so it didn't work anymore. So 2 years ago, we bought everything. My big thing is, is I, to be honest, I just want as little equity as absolutely possible in equipment. So kind of our thing right now is, is we only put, you know, 8 to 11% down and we push the loans out to at least 7 and hopefully 10 years.

But most of them are 7, you know, with the equipment financiers, the banks we can push out a bit harder. But yeah, I just, I don't want equity in equipment. I, I use equipment to make money. I don't use equipment to own. And obviously this last 18 months is an anomaly because it is up in value. But that, that still builds my equity because I still own it. But yeah, I just, I just don't want equity in equipment. It's just a cost per acre to me. And we try to have as little equity in there as possible. And I divert all that equity into, you know, land, working capital, and infrastructure.

Shay

Foulk: Another 90-degree turn here a little bit. You and I were talking offline about volatility. And I think some people get a little bent out of shape. And it adds a lot of stress into operations when you look at the climate that we're in here today. I think you and I look at it the same way of maybe there's a little bit more opportunity in volatility, not necessarily worrying about all the things that we can, cannot control. You know, so how have you handled volatility? Where do you think some of the opportunities have been and what would be relevant for the listeners to maybe be thinking about here?

Kristjan

Hebert: Yes. I mean, to be honest, I enjoy volatility. I mean, I think I think if farming was easy, everybody would do it. So if you don't like it, then get out, right? And I'm not trying to be rude when I say that. But a guy I rent from actually is 93 years old. And he's a pretty good friend. And he comes to see me every Wednesday, and we have coffee. And I still remember to this day, about 10 years ago, I said to him, you know, give me your best piece of advice about farming. And he looked back at me. And he said, I put in 60 crops, and I only needed 8 of them. The other 52, I just had to make sure I was there the next year. And I hold that to heart. And so it's just do the best job you can every year. And when you get those 6 or 7 or 8 chances, goddamn it, don't miss, right? And I would say the last 2 years and this year are those chances.

I mean, the volatility, yes, cost of productions are up kind of a minimum of 50 to 100%. I understand that. But when the revenue predictions are up 200 to 300%, and so Honestly, just get over what your cost of production is. Find a way to build a risk management plan to let you sleep at night and go capture some of the best revenue you've seen in your entire life. Right? Don't, don't spend every morning worrying about cost of production. Yes, no, it— you need to know it because it's the highest risk environment we've been in. But there are a lot of ways to manage that risk down with current financial and risk management tools out there. So manage it down to a manageable number and then just go do your job. And get these last couple years and the next 2 in the bank, 'cause they might be 4 of the 8, you know, that create your whole nest egg in your life.

And that's just kind of how we look at it is without volatility, we don't get to have years like this. I mean, it's just consistent and it's a fun job and we love what we do and land's a good investment. But, you know, years like the last couple and this one, and it sure looks like you listen to Peter Zihan, we got 4 or 5 of them in front of us too, where just manage the volatility as best you can and you're going to take the odd black eye, But just make sure all the other years you're doubling or tripling down. And, and I think it'll work out. But you got to trust your gut even in high risk and high volatility, because you are where you are. Because you're pretty good at making decisions.

Shay

Foulk: You know, I— you made a note there on doubling or tripling down. And that was kind of what my topic was at Top Producer. One of the key points is the people that are really successful that we work with in farm operations, they know what they're good at, and they double down on it. So you know, take a good hard look at your business and you gotta ask yourself, is it a distraction or is it diversification for one? You know, so do we have multiple things going on just to have multiple things going on? Or is it driving profit and driving good business decisions? Or, you know, do we take that effort, refocus on, you know, how do we add more acres, more profitability, higher level of management? Uh, so I really appreciate you mentioning that.

Kristjan

Hebert: Kind of, you know, I like, I got a, I got a baseball example I always use for this one, right? My theory is, is at the start of the year, do what you have to do to make it feel like you can't strike out and you can't hit a single, right? And whether that's the right crop insurance and risk management plan and a diversification and maybe some off-farm income, I don't know. Everybody has a different way to do that. Ours is the way we manage our risk. But you want to know what I think in baseball, if you took away strikeouts and single baggers, there'd be way more home runs. Yeah, because you're not worried about striking out, so you swing harder. And I don't see it being any different in your farm.

Figure out what a strikeout feels like and then manage that away so that when you know when you're walking up the plate for 2023, the worst thing you can do is hit it, you know, a single, but most likely a double. And I guarantee you're going to swing way harder at a home run because you've taken away the strikeout.

Shay

Foulk: Great analogy. One of the last things that I had on my list here, and we can open it up there as well, I want to come back to kind of the foundation stuff, but, uh, HR. So you got a lot of people in your operation, a lot of different levels of management in a good way. I don't, you know, not like a hierarchical, hierarchical thing necessarily, but, you know, how it, how has your operation managed some of the HR challenges? And, you know, how do you think about that moving forward? Do you have the right people in place or what does growth look like in that area?

Kristjan

Hebert: Yeah, like I said, I think part of it is, is because, you know, we build it more like a hockey team, which is a lot more straight line than hierarchical. So, I mean, everybody knows that, you know, obviously I run it, I have the most risk and the most equity tied up, but I'm still part of a lot of the ops meetings. I'll kind of go to 1 and 4, but my COO in the hierarchical term, which I call my integrator, he's the one that runs the weekly meetings. And 50% of the time he's out with the guys, not in an office. And, and everybody's in the meeting to deal with the issues. We don't care what level it's at. You know, you could be the the janitor, or you could be the guy that manages all the technology on our farm. You're, you're treated the same. And we just spend a lot of time trying to get people into the right boxes.

So, you know, I think in a perfect world, if you can go to work and 70% of the time you're doing stuff you love, like it honestly feels at 5 o'clock you haven't even worked that hard, then, then we've done our job. We've got the right people, got them in the right boxes. And, and I understand that 30% of the time it's going to be stuff you just don't mind doing, or you actually even don't even like doing, because that's life. You're not— there's no perfection, doesn't exist. But I think there's too many operations that, you know, the job description is just do whatever I tell you to do when I tell you to do it. And we never even ask what they like doing. And I'm sorry, if someone's doing what they don't like doing 70% of the time, even if they're good at it, they're eventually not going to last.

And so I think that, you know, just getting people in those areas and then that, that's just automatically productivity. Think yourself, if you're doing something you're good at and you love doing, you're like 200% productive. And so then we don't even have to, we don't have to measure a whole bunch of stuff on productivity because it just shows up in our financial statements by asking those questions. So something as simple as we do an ABC task audit with the team a couple of times a year. And, you know, so A tasks like, what do you love doing? What could you get up at 6 o'clock every morning, come home at 6 o'clock every night and be like, Jesus, I hope I can do that again tomorrow. And for me, you know, seeding is one of those things. Coaching my kids hockey is one of those things.

And we want to know personal and work, you know, B, stuff that you have to get done, you don't mind doing it, you know, and you can do some of it. So obviously I'm a recovering accountant, so I review all the numbers and, and, but I don't build the spreadsheets anymore because honestly that's a C task for me. But I have to review the numbers and sign off and, and see, you know, you get up in the morning, you do it because you're paid to do it. You're glad 5:00 or 6:00 came. But you sure hope that the next 5 days aren't that, and you definitely aren't sticking around if it's all year. And so then you start to see what percentage of tasks for everybody are in those columns. But then the neat part is, is once you get those up on the whiteboard, someone will say, Jesus, you don't like doing that? I really enjoy it. Why don't we trade? Yeah, right.

And so we have our— like I said, we have our 70% job description of what you're good at and why we hired you. And then the 30% is helping your teammates. And that 30% helping your teammates job description allows you and I to trade tasks because you like it or I don't, or maybe I do 80% of something and you review it for me. But just that working together to trade tasks has really changed. And then lastly, the one thing we've really learned, people hate to be alone. I don't care if you're in an office or if it's the middle of harvest and you get sent to spray by yourself and everybody else is at the combines. The number one thing we can do is have everybody working in a minimum of a team of two. And even our drills, though, our planters, we run four in a field and it like it's turned into NASCAR. I mean, everybody loves it. They're on the radios.

And so I would say that I never cared how many acres we had. We really actually grew because of people, that it honestly makes our people side easier. And that sounds crazy because I have way more people than I did. But when it was just Dad and I and one other person, if one of us quit or got sick, you had a 50% increase in your workload. Now with 10 or 15 or 20, if someone needs a day off to go to the doctor or go coach their kids hockey, everybody is okay with taking on 4 or 5% more work that day to allow that to happen. And, and we just have everybody that can, you know, I got a heavy duty mechanic that's way better at fixing than I do, and a project manager that's way better at that than I am, and a tech guy that's as good at that, good at the tech side as I am.

And And so you just, you feel— my goal has been to replace myself in every area of the business, and that should allow me to grow. And I think a lot of people feel if they replace themselves, they become useless. And that mentality is one thing we have to switch. And I think it's why a lot of people struggle with HR is that we're almost scared to hire rock stars and scared to train them really good because we're almost scared that we become useless. And my argument would be, no, it just gave me more time to grow and do what I'm good at. And it allows us to allow them to go see their families and their kids' sports more, which then just honestly just refers more people into our business. We, we haven't really had a people problem and it's because the crew is referring really.

Shay

Foulk: The process that you talked about there of taking on tasks that maybe someone else doesn't like doing. There's an exercise called Delegate to Elevate. I don't know if you're familiar with that, but it's the same thing. If anybody's listening listening to this and you want to go through it with your farm operation, uh, just shoot me an email. And it's a real simple cross-section of here's the things that I like to do, love to do, and I'm really good at. And then in the other corner, you got things that I hate to do and I'm not good at. And, and somewhere in the middle is everything that you do. And so how do you kind of delegate some of those things that you don't like to do that someone else might? And, you know, rising tide kind of floats all ships. Yeah. Last two things here.

So you talked about, you know, a little bit about the, the foundation and, and, you know, what, what, what are you trying to create? You know, when you think about you are now sitting in the decision-making process of 1, 3, 5, 10-year goals, you know, what, what's kind of your guys's endgame or what's your next thing that you have coming in your farm operation? What's your vision there?

Kristjan

Hebert: Yeah, so, so I mean, Christian's personal one is it's pretty simple. I mean, our home hometown is a town called Fairlight. There's like 26 people in it. And I swear to God that they don't all have the last name Heberts. But, you know, I came from pretty small roots and I'm proud of that. But at the same time, you know, I want my kids to understand it's a big world out there. So I always joke that I want to give my kids the opportunity to go to Harvard, but I want to build something cool enough that the job offers on the table. Right. So and I just use Harvard because everybody knows that I don't care what Ivy League school it is. If they want to go, I want them to go. And if they get a job offer from Goldman Sachs and Facebook and Heber Grain Ventures, I don't want mine to be in the garbage can. I want it to be on the table. And if they choose it, they choose it.

But if not, that, you know, that's fine too. It's just my job to have it be interesting enough and vibrant enough that it's an option. So that's kind of Christian's internal. And then, you know, our operation, like we said, we kind of just call it, you know, our job is to just solve agriculture's puzzles. And we think that kind of leaves us open-ended. Now, do we have targets? Internally, we have targets that we want to keep growing, but that doesn't have to be in acres. It can be in revenue. And, but I mean, it's just well known that if the right opportunity comes to me, I'm going to take it. And actually, the last 2 times we've expanded, the team voted on the acres and they always vote yes, because I think the majority of the people work for us because they're addicted to the game, no different than I am. And, and we don't like being told we can't do it. Right.

So it's just, it's just that addiction to growth and knowing that we can fill the holes with good people and have enough access to capital to do that. So You know, could I tell you in 10 years if we'll be 100,000 or 60,000 or 25,000? No, but my sneaking suspicion is we'll be bigger than we are now. And, and to be honest, we'll do a better job then than we do now. Because as we add better and better people, we can actually do a better job on every single acre than we have in the past. And, and that's our goal. We just, we want to feed a lot of people, but we want to farm every acre as perfect as we possibly can and continue to improve every, every day on it.

Shay

Foulk: Last question that I have for you is one of the areas that people struggle with, and especially as we talk about the development of technology and how the technology game is maybe going to take people out of the seats or take people out of the equations in certain aspects of the businesses. How do you maintain a sense of purpose? And some people get scared by that, you know, they get scared by maybe I'm the operations person and I don't want to be the Christian in my operation. I don't want to manage all this. I don't want to manage all the people. Be the visionary for the business. How do you think about maintaining a sense of purpose as the world changes rapidly around us? And how do you maintain your sense of purpose?

Kristjan

Hebert: So I mean, my personal opinion is Broadacre Agriculture is a little ways away from a bunch of robots running our land, you know, don't get me wrong, as Europe and farming right around cities is going to get that sooner than later, probably as soon as they figure out the liability side. So I probably tell my team, you know, it is gonna come, but you know, don't get too worked up about it. And then secondly, kind of the example I use is, I mean, you know, my dad's VCR still blinks 12 o'clock, right? And you and I remember what CDs and Blu-rays are, but my kids don't. And my kids' ability on an iPad, how that translates, you know, to the new John Deere monitor is unbelievable.

And so that's kind of what I tell the team is that, you know, the thing we're lucky for is that the group coming up that we're going to hire, or your kids, that a lot of these kids of the guys that work for me think they want to work on the farm, they're going to be able to teach us on how to adapt to this new climate that we're moving into. So we don't have to be stressed about it, right? It's, it's just being okay with learning and almost like that reverse mentoring system. We can teach that generation all the things we know about growing grain and logistics and communication and the stuff we're really good at. And they're gonna be able to teach us so much, you know, about the technology and automation and AI and using machine learning to do a better job of understanding weather algorithms.

So all we gotta do is hire great people that are younger than us and then be willing to listen and collaborate together. And I think that just allows us to keep moving, right? The worst thing we can do is try to just be what we are today. And so every day we just try to be a little bit better and bring in great people and, And like I said, I think reverse mentoring is going to get to be as important as mentoring in the future because this younger generation is just so good with technology and can take a lot of the fear and the worry away from us. And yet we can still teach them so much. You know, there's also a lot of younger generation that'll go to a restaurant and sit across from each other and text, right?

And so, you know, we still have to teach them the importance of a, you know, a 20-minute weekly team meeting and why Voxer is important to tell everybody what you're doing, not just put it on Snapchat and So there's a lot of lessons that can be, that can be borne both ways.

Shay

Foulk: Christian, I look forward to when you write a book, and I hope you call it Time, Brains and Money, or whatever it is that you decide to do down the road here. A lot of great knowledge, great wisdom. I appreciate your time. If people want to learn more about your operation, what you do on the consulting side, any of that, you know, how do they contact you? How do they reach out to you?

Kristjan

Hebert: Yeah, so I mean, Hebert Grain Ventures is our farm website. It's spelled H-E-B-E-R-T B-E-R-T. My first name's a little goofy, it's Icelandic, so it's K-R-I-S-T-J-A-N. So my Twitter is kind of the one I'm on the most is Christian Hebert, but I, you know, I'm on all the other channels. My team just manages it for me. And, and our consulting company is Maverick Ag. It's got a website, Farmer Coach has a website. I've got a personal website, christianhebert.com, where we kind of post all my podcasts and blogs and, and that kind of stuff. So yeah, feel free to reach out on, on any of those and someone will get back to you. And. And as I said, you know, we're just always excited to hear everybody else's ideas too.

Shay

Foulk: Very good. Where are you headed after this? What's next on your list?

Kristjan

Hebert: Oh, we got to actually kind of— Thursdays are meeting days, so I got kind of meetings till, till noon and then finish a couple of projects. Then I'm taking my daughter, coaching my daughter's hockey team at about 4:00. So just a typical winter day up here.

Shay

Foulk: Thanks a lot, Christian. Really appreciate the time. We'll be in touch.

Kristjan

Hebert: You bet. Thanks for having me.

Shay

Foulk: And thank you everyone for listening to another episode of the Ag View Pitch. We will catch you next time.