The perfect world for a ranch owner who does not live on or actively manage his or her ranch is to have an enlightened, hard working ranch manager who is proficient in all aspects of a ranching operation from the livestock to the farming to the wildlife resources as well as being a great communicator, a talented bookkeeper, a whiz at maintaining facilities and terrific at looking after family and guests. I think we all recognize that, even if this person did exist, we could not afford him! Or if we did find him or her, Lord Acton’s premise that power corrupts and absolute power corrupts absolutely would come into play because such a person would definitely have a lot of power over our lives. The progression we often see in these perfect world scenarios is that two employees morph into three employees and the work that used to be done by ranch employees is increasingly done by outside contractors. In short power corrupts.
The underlying theme here is that the ranch manager and the ranch owner often have different agendas and are not always on exactly the same page. This relationship is further complicated because they become friends and the boss/employee relationship disappears. It is also important to remember that the one thing that we can count on is that people’s lives change. They age, have health problems, relationship problems with spouses and children and any number of other predictable changes. At the end of the day the perfect ranch manager probably does not exist and if he or she does exist, it will only be for a short moment in time—absent outside intervention.
The situation described above defines the role of the ranch management company. Essentially it is their job to represent the owner and do whatever is necessary to, not only create that perfect world, but also to make sure it stays perfect. The first step is to work with the owner to create a practical management plan and hire that enlightened hard working ranch manager. Assuming for the moment that this mythical person exists, the management company would appear to have pretty much worked themselves out of a job. However, there is still a broad oversight role because we know that, over time, that perfect manager is going to change for the reasons we have discussed and the management company’s job will be to provide enough independent oversight to be sure that does not happen.
In the more practical real world where perfect managers do not exist, the management company has a more enduring role in which they step in to fill the holes in the manager’s resume.
In the more practical real world where perfect managers do not exist, the management company has a more enduring role in which they step in to fill the holes in the manager’s resume. The most obvious ones often include a lack of financial skills or an inability to communicate well. These are easily taken on by a management company. Some managers are great with livestock but their machinery and farming skills are weak or vice versa. Again, a management company can help in these areas. Sometimes the solution is to hire employees with complementary skills or contract certain tasks to outside service providers.
In any event, it is the job of the management company to create and maintain that perfect environment. Sometimes it requires tiny, subtle tweaks and sometimes it requires very heavy involvement. It is always a fine balance to maintain but anyone who has been through a vitriolic change in management will attest that a management company’s fee is a small price to pay to avoid such a situation. It’s never just the transition to a new manager; that is the easy part. It is the years of unpleasantness and hard feelings that lead up to the decision to make a change that poison the atmosphere and it takes years to rebuild that positive feeling about the ranch.
In closing we have discussed the role of a management company as it relates to absentee owned ranches. Essentially that role is to fill in the gaps in the on-site management team’s abilities. It is not much of a jump to see where a management company can perform the same function for a resident ranch owner. Management company employees, are not necessarily “rocket scientists” but they bring to the table a broad range of experiences and knowledge of how successful ranches operate. This can be invaluable at many levels for any ranch owner.
For more information about ranch management options with Hall and Hall, call 406.656.7500 or visit www.hallandhall.com.