In a recent Forbes article, Steve Denning explores the concept of setting the correct goals of businesses. The concept of maximising shareholder value is challenged and the theory that the centre of all company goals should be to place customers at the centre of the company’s focus, satisfying them completely while earning an acceptable return for stakeholders.

Theoretically, if you take care of customers, shareholders will be taken care of, whereas; if you take care of shareholders, customers do not necessarily benefit, in fact, neither do shareholders.

There is a real opportunity in agriculture to build for the long-term rather than exploiting short-term opportunities and in turn, increasing sustainability. Long-term development provides meaning and motivation for organisations. Long-term client relationships also create bonds that develop great plans, allowing you to bring them to fruition.

The idea of customers coming first and getting things right for consumers, means shareholders will be rewarded as a result. This is applicable to any business and more than achievable with the correct company values and KPI’s.

At Apple, Steve Jobs took delight in signalling to shareholders they didn’t matter much if Apple maintained a customer-focused approach and provided contributions to the world by making tools that we didn’t even know we needed! The Apple story speaks for itself.

According to Denning, the Aspen Institute of Corporate Values Strategy Group recently championed the promotion of long-term orientation of business decision making and investing. Warren Buffet, CEO of Berkshire Hathaway joined the Institute to call an end to short-termism in financial markets that has led to many of the recent market troubles, and ironically, provided Berkshire Hathaway with many of their recent investment opportunities.

In the current market, there are many examples of the apparent disparity between investment horizons, payback periods and finance tenure. Mismatching the outcomes of these often leads to trouble and agribusiness is a prime example. Appropriately and responsibly financing agribusiness ventures in line with underlying business drivers is one of the most important factors of a successful agricultural investment. This will allow your business to focus on the primary driver, satisfying the customer.

In figure skating, the move known as a backflip is illegal. The first man to do one was American skater, Terry Kubicka in the 1976 Winter Olympics. A second man, a French-American, Surya Bonaly became famous for landing a backflip on one foot. Surely if it’s illegal and not a “real jump” in figure skating you can’t do it politics? It seems that everyone is into backflips these days…

 A speech that Australian Prime Minister Gillard made pre-election 2010: “There will be no carbon tax under the government I lead.”

A speech that now US President Obama made in 2006: “The fact that we are here today to debate raising America’s debt limit is a sign of leadership failure…”

A speech that former US President Clinton made in 1998: “I did not have relations with that woman.” Really?

How is this relevant? My point isn’t political; it’s about the importance of maintaining consistency on key issues. The lesson to learn here is doing what you say you are going to do. If you can’t do it, don’t say it. As Tim Miller, campaign spokesman for Governor Jon Huntsman (US) said, “Backflipping is for toys and gymnasts, not presidents.” Consistency allows for stability and confidence in business and banking, and similar to comments made in September’s AMC Market Insight, stability is required with any reserve currency. Instability means higher costs of capital at the end of the day, for banks and therefore businesses.

Across all business, Financiers are looking for proof of stability through:

• Consistent returns backed by financial reports not just management reports;
• Business systems and procedures;
• Succession plans; and
• Risk management strategies.

Where there is a will there is a way. Sometimes it’s a long way. In today’s market there are a myriad of businesses, including many agribusinesses, seeking alternative means of finance. Whether through IPO, private placement or Joint Venture, accessing alternative sources of capital is not necessarily easier than traditional banking finance and it can take a long time. Businesses must spend a significant amount of time in preparing for the introduction of investors or new shareholders.

• Tips for businesses seeking alternative sources of finance:
• Learn your target market;
• Prepare your business relative to your target source (e.g. Corporate Governance, Management capacity, Succession plans, Business and operational plans, Proven performance track record, Audited financials, Budgets, Compliance, Independent Expert Reviews);
• Maintain a strong Balance Sheet;
• Structure business and management appropriately relevant to your target source;
• Prepare all documentation and data required during a Due Diligence period; and
• Engage expert advice with relevant experience.

It is important to have the correct information and be in good shape as quite often you will have one chance at accessing investor markets. After all, some of us are playing for sheep stations.

Agricultural Management Company (AMC) is an Australian  based specialist agricultural management and advisory services provider. AMC  operates in the global market providing management and advisory services to both  Australian and international clients including Private Equity, Institutions,  large agricultural producers, agribusinesses, manufacturers, professional  advisory firms, Banks, mining and private clients.