The Hierarchy of Luck in Farming
Farming is more about mindset than it is about anything else. It takes a strong mind to overcome the array of challenges; from weather, to geopolitical issues, to market instability plus an ability to process vast amounts of information across various disciplines into profitable decisions and it takes mental stamina to do this continually over the course of years and decades. That’s why mindset is one of the most important factors to thriving in farming and in agribusiness. Last year I wrote a piece called “The Most Limiting Factor in Crop Production Isn’t Water”, touching on the fact that it’s mindset that holds back yields and profitability in the ag space more than anything else, including moisture or climate. It’s the cognitive constraints farmers and professionals put on themselves and their businesses/operations that hold back year to year progress. This includes cognitive biases like social proof or loss aversion as well as fear of the unknown. But I didn’t mention another important component: The perception of luck.
Control What You Can Control
I have always been interested in luck and quotes about luck such as “the harder I work, the luckier I get”, “fortune favours the prepared mind”, “make your own luck”, but I never thought of luck as a hierarchy until a couple of years ago. A popular angel investor I read/listen to often is an individual by the name of Naval Ravikant. He took these various perceptions of luck and put them into a hierarchy. This got me thinking more explicitly about the perception of luck, and control in farming.
The best farmers I have dealt with have always exuded an aura of control over their business, their farm and themselves. Controlling the controllable every step of the way. In contrast, the weaker farms I have worked with have tended to have the mindset that everything is out of their control, weather dependent and with a mindset of hope.
So, while mindset is important, a significant make up of this mindset is actually ones perception of “luck” and the type of luck they believe in.
The hierarchy gains incremental value as you move up the pyramid (see figure 1.1)
Here is how the hierarchy of luck breaks down in terms of definitions and examples:
Blind luck is equivalent to “dumb luck”, which is luck in the most literal sense, like winning the lottery or finding a $20 bill on your way to the office. No real skill, effort or knowledge necessary to obtain something valuable. In farming, this is simply having the mindset that “I’ll get the yields I want if I get the rain I need so I am just going to do what I have always done” or “I am not going to plan because it all depends on what the market does anyways”. While there is some inherent truth to those comments, there is ways to obtain more when the rains do come, or protect your downside risk when it comes to the markets. This type of “blind luck” perception is not where anyone wants to be.
Fortune Favours the Bold
This is a popular US Army quote, and there is a lot of validity to it. Making bold risks will eventually expose you to opportunities and outcomes that make you better off had you not taken them. An example in the dating world might be asking out the attractive individual across the room that you typically wouldn’t have and having them say yes, and in the farming world it translates into the equivalent of taking initiative to add an extra 30lbs of nitrogen onto a wheat crop because nitrogen is cheaper and you think it might be a good year to try. Not necessarily based on a specific agronomic need or a specific best practice, but boldly gets executed on. With this, there is still some necessity for a lot of “blind luck” to be able to obtain a positive outcome, but a specific action was still taken.
Fortune Favours the Prepared Mind
This was one of my favourite quotes growing up, and I am sure at least partially fed my love of reading. But it has further implications. This is ensuring that in your spare time, or when there is the opportunity, you as an individual are exposing yourself to new information, knowledge or insight that may become valuable at some point in the future. This is essentially preparing yourself for an opportunity that may, or may not, show itself at some point in the future. An example might be reading every single piece of information you could on blockchain technology and then you end up sitting beside an individual that’s heading up blockchain initiatives with a major global corporation and your ability to discuss blockchain with this influential individual led them to offer you a job that changed your career trajectory. Now in farming, this could show up as exposing oneself to articles within Top Crop Manager, Grain News or any other publication and then being in the field, in season and accurately being able to diagnose and take action on a pest that otherwise might have cost the farm hundreds of thousands of dollars in lost yield. This is a very valuable place to be but isn’t the pinnacle of positions to be in either!
Make Your Own Luck
The holy grail when it comes to perception of luck is constantly being in the mindset that you are in control and you can manage your own outcomes. This is done by managing everything and any little detail to be able to set yourself up for success. This includes making the connections so that opportunities come to you through your brand and who you are as an individual. It’s surrounding yourself with individuals and businesses that make you better, it’s knowing your numbers, owning your metrics, it’s putting plans in place, and it’s capturing data and insights that give you the capability to see into the future and navigate challenges without being reactionary or “hoping”. There is bold luck within it and there is prepared luck within it as well, but there is also the perception that you are always in control and that you can manage for the upside opportunities as well as have your downside covered. This is for agronomy, this is for marketing, this is for operational efficiency and beyond. It touches all aspects of the farm operation. This is where the most successful individuals and farmers lie. Constantly making themselves a magnet for opportunities and ensuring they are in a position if strength.
How Does One Make Their Own Luck?
I often reference curiosity as a key in my posts. This is because you can’t move forward as a farmer, ag professional or as an individual without seeking out new information, experiences and people. This is what keeps you in motion. It keeps you getting better, and it keeps you creative. This will ensure that you are “lucky” in having new information come your way.
2. Bias for Action
Seeking out new information is great, but there needs to be a bias to do something with it. This is in part controlling what you can control, but also seeking action to try new things. When that new piece of information comes your way, or you get the opportunity to try some new idea; take it. Don’t wait.
3. Synthesize, Strategize, Analyze, Optimize
If you synthesize the information coming your way, strategize (make a plan), analyze the outcome (think critically) and then optimize for the future, you enhance the chance that you obtain good or great outcomes within your farm.
In farming there is always going to be some level “blind luck” that is driven by weather and markets out of your control, but continually working on your perception of luck and moving up the hierarchy, will help you take advantage of opportunities that arise so you aren’t caught off guard by challenges that will inevitably occur. Your perception of luck will help you to overcome cognitive biases like social proof and loss aversion because it ensures you are planning for what might be and not doing something “just because”. Mindset is the most important component in farming and your perception of luck is one of the most influential aspects of your mindset. Making your own luck puts you in the driver seat of your operation, not simply an innocent bystander.
The Luck Hierarchy Image 1.1