Smart business built on innovative thinking
GroundCover™ Issue: 84 | 01 Jan 2010
Modelling their management on corporate lines has transformed the family farm business for this South Australian father-and-son team
By Kenn Pearce
For Brendon Smart the hardest lesson learnt in his 35 years of farming has been how to become a good employer.
The ‘multi-enterprise’ farmer from Keith, in South Australia’s upper South East, knew he had to change the way the farm was run if the enterprise (now known as the Smart Group) was to thrive and expand.
“Basically, I went to bed one night with the resolve that tomorrow I was going to change the way we manage people,” recalls Brendon, the group’s business development manager. “We sat down and asked a lot of questions as to why we were working hard and not getting any further ahead. It mainly came back to human resources management.”
That was almost 20 years ago. However, after introducing a quality management program, providing more responsibility and autonomy to those working with the family, Brendon has never looked back. Employees began to work with, not for, the Smarts and the transformation was profound.
“When we worked through a system that managed that issue, it changed the direction of the business and added an enormous amount of energy and collective intellect to our business,” he says.
The Keith farmer, 60, admits it took considerable courage, but rewards were returned “100-fold”. For many years now, staff turnover has been almost zero. His son, Damien, 32, says employees take a “serious amount of pride” in their positions and have a good understanding of the business’s requirements.
The other major shift in the Smart Group’s progress was establishing a family board that has a subtle difference. Brendon, his wife Robyn, Damien and another son, Ryan, comprise four members of the eight-member board set up about 10 years ago to bring real rigour into business management. Eldest son Justin commutes from Sydney several times a year to sit on the board.
Three ‘outsiders’ complete the board (one being chairman) and bring independent eyes and separate business expertise.
“The external chairman was appointed on his experience as a successful agri-businessman, community leader and sports motivator, and for his skills in human resources and ability to work across trans-generational issues,” Brendon says. “Obviously he enjoys our enormous respect, as I hope we do his.”
The three outsiders sign a letter of indemnity absolving them of liability for decisions they make. It allows frank and real advice to be given, the Smarts say.
Brendon describes the board’s rigour as not dissimilar to any major public company, with all the usual principles, reporting and disciplines in place. Managing family issues and succession planning are a key outcome of this structure.
“With an external chairman and a structured approach you have a third-party managing issues that can start off as little issues, but can ultimately destroy a family,” he says. “If it wasn’t for the board structure and focus on a better lifestyle I suspect our working weeks would be absolutely ridiculous.”
The Smart Group runs several thousand livestock among extensive cereal cropping and irrigation (mainly for lucerne seed) operations, across three properties on the Fleurieu Peninsula and in SA’s South East region. Their ‘multi-enterprise business’ is run by the family and six employees.
With their geographical spread and business diversity, the Smarts focus on matching land to its best use, and changing land use from its traditional form has been used to great advantage.
Over time the Smarts have been both innovators and early adopters of new methods and technology. This approach has been continual, with information sourced from wherever it is available – an addiction nurtured by both Brendon and Damien being recipients of Nuffield scholarships (in 1990 and 2007, respectively) – resulting in an extensive global look at agribusiness.
Twenty-five years ago Brendon began using computers and basic software for farm and financial management. “When I did my Nuffield scholarship I was actually looking for computer programs but could find nothing off-the-shelf that would suit our job,” he recalls. Now there are many and all very effective.
Minimum-till seeding was adopted more than 20 years ago and, more recently, Damien has led the introduction of sub-surface drip irrigation in broadacre areas, particularly for lucerne.
The Smarts were early converts to putting drop tubes on centre pivots after seeing the technology in Mexico nearly a decade ago, thereafter converting from spray to under-foliar emission. The operation of the family’s entire flood-irrigation system is managed automatically, while continuous telemetry moisture-monitoring optimises water applications.
“Over the years having irrigation has given us the opportunity to grow a variety of seed crops, including a range of brassica crops and even broccoli,” Damien says. “Ultimately, at this stage, lucerne seed is our main irrigated crop.”
Mention research and development and the Smarts become passionate about where it should best be targeted, for example into higher-rainfall zones, where Brendon sees huge potential for future food production, “not just grazing and dairying”.
Last year the Smarts purchased their Murrabinna property, near Kingston, and are now especially interested in developing cereal varieties that can stand “wet feet”.
In 2008 the Smarts planted 200 hectares to barley at Murrabinna. Planted on 25 September it did not receive rain until 20 December, yet still averaged 1.5 tonnes a hectare. However, this year the wet winter proved a wonderful challenge – too much water – but an issue they think they can work with.
“If you had a variety of wheat or barley that could grow in water for six weeks of the year and survive … you could open up a whole range of new (food) production areas,” Brendon says.
Mention GMOs and Brendon is adamant they are “an essential part of our future”. However, like his father, Damien worries about Australia being left behind in years to come by overseas food-producing nations. “As a young farmer I see us trying to compete against Brazil and other low-cost production countries, which are nowhere near their maximum potential in production or area of farming. Australia is going to find it really difficult without access to the world’s best technology, and that includes GM.
“Our research dollars need to be invested in technology that is going to give us an edge or maintain our competitiveness with the rest of the world.”
Looking ahead, the Smarts believe the family’s strategy of spreading their business risk geographically augurs well for the future.
“Probably 60 per cent of our income at Akeringa (Keith) is guaranteed each year, with our mix of livestock and irrigation … that puts you in a hell of a strong position,” Brendon says.
“At Victor Harbor we can literally do that because it’s a reliable high-rainfall area.
“At Murrabinna we’ve got a water licence, which we haven’t tapped yet, and have the ability to grow a winter and summer crop. As we get the mix right over the next few years it will add to the diversity and hence the risk management essential in any business.”
More information: Brendon Smart, 0417 820 301; Damien Smart, 0427 566 061
Region North, South, West
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