Guidelines to monitoring and evaluation
Monitoring and evaluation provide an extremely important check on the accuracy of the inputs and predictions from the analyses used to set the enterprise strategic directions. Monitoring and evaluation ensure that:
• The enterprise plan is being implemented as intended; and
• Changes in enterprise productivity and profitability align with the predetermined targets (after accounting for variations in pasture growth, market prices and variable costs).
There is generally a strong association between ongoing monitoring and feedback and the successful implementation of the plan. Continual monitoring of physical resources, animal performance and financial outcomes provides you with confidence that the strategies are either on-track or need revision. The system must alert you to weaknesses in the enterprise operation and allow you to take the necessary corrective changes based on accurate information. This helps to reduce the risk and uncertainty about whether changes made to herd and management structure of an enterprise are actually working.
Finally, it makes sense to review the strategic direction periodically in relation to changes that have occurred in technology advances, genetic progress, pasture species and your own business and family goals.
Managing the risks
The main risks include one or a combination of the following:
• Not knowing the accuracy of the analysis or models used;
• Not having an accurate way of knowing whether planned actions or tactics are meeting targets;
• Lack of objective feedback to build confidence in change;
• Implementation of the planned changes is not successful;
• Over time, changes in the overall business environment, or in your own business or family goals, mean that the initial directions set are no longer the most appropriate.
When tracking progress, potential corrective actions include:
• Identifying the reason for being off-track and taking the appropriate action when outside the limits you set;
• Rigorous checking that implementation is not at fault;
• Revising the analysis using updated values when change is implemented correctly;
• Re-examining the original analyses when the original projections are not on-track. Using your own information can add confidence to the review; and
• Re-examining the strategy every five years or so, or in the event of a new opportunity.
What to measure and when
Measurements need to include all physical and financial key performance indicators for the beef enterprise to allow a thorough comparison with targets.
Monitor all physical and financial key performance indicators that impact on your beef enterprise, remembering that:
• Lag indicators can only be seen after the event and are more closely related to the ultimate measure of performance and return on assets (RoA). Examples of these include return on assets, cost of production and equity change.
• Lead indicators can be used in real time or before the event, with the aim being to track progress and reduce the impact of unforeseen events. These will be related, to varying degrees, to return on assets. Examples include stocking rate, pasture utilisation, weaning rate, percentage of carcases meeting market specifications and actual versus budget monthly cash flow.
Cash flow and climate variability may be major constraints to achieving the expected physical and financial goals. This makes the periodic review of the strategic direction of the beef enterprise vital to conducting a successful business.
