Strategy Tax
Tim Hammerich
News Reporter
Farming is filled with costs, and they’re going up. But there are also opportunity costs hidden in every business, including agriculture. Shane Thomas of Upstream Ag Insights calls these unrealized costs of pursuing one strategy versus all other options “strategy tax.” He applies the idea to agribusiness and farming, where success may require giving something else up.
Thomas… “ So a strategy tax essentially refers to the, call it, trade offs or the internal friction that incurs as a result of pursuing some specific strategic direction. And so this can just be looked at as like you can only focus on so many things. And so if you're trying to focus on—you're juggling eight balls, it's really hard to juggle eight balls. But it's really easy to juggle two with your two hands, right? When it comes to strategic initiatives, lots of companies, lots of people try to do everything. We're just naturally optimizers too, especially in a business setting. We want to optimize for we could do that, we could do that, we could do this. But you look at all these different businesses, in any industry, focus tends to win out. But when you focus, there's always this something you have to give up. But the idea is that if your strategy is right and you're building in the right direction, the upside of going in that alternative direction is higher than the alternative of trying to do both. And I think that's really the kind of core. It comes back to being focused and really acknowledging that, hey, there is going to be a strategy tax. Let's not worry about it. Let's just make sure we do the diligence properly that says, hey, we know we are going to be ahead if we lean into this specific strategy and direction.”
Once again, that’s Shane Thomas from Upstream Ag Insights.
