As Americans, it’s hard to overcome the more-is-better attitude. Always striving to keep up with the Joneses, we strive for bigger houses, more expensive cars, larger yards, and in the case of one friend of mine, the most shoes. This way of thinking is hardwired into us, and when someone bucks the trend, they’re usually viewed as weird, avant-garde, counter culture, maybe even “a hippie.” Remember those drivers who thought Smart Cars were cool? Now it’s living in “tiny houses.”
But those who have eschewed the “big mentality” often tell us it was the smartest thing they ever did. And that doesn’t exclude the business world.
On our last VALOR session, my cohorts and I visited Ingleside Winery in Westmoreland County on the Northern Neck. Doug Flemer, proprietor of the 37-year old winery, explained that he adopted this counter-intuitive business approach several years ago to great success. While most of the 280+ wineries in the state are striving to produce more wine, Doug opted to aim for less. In fact, he decided to reduce his production by two thirds, from 18,000 cases of wine a year to 6,000. This decision doesn’t reflect Doug’s poor business acumen. Instead, it may be the shrewdest decision he’s ever made. In fact, it has resulted in significantly less work, a reduction in staff and corresponding payroll expenses, less headaches and stress, less overhead and, as a result, a higher quality of life. But most importantly to Doug’s business, he accomplished this with almost no change to his bottom line.
In fact, the only regret Doug has about the decision to downsize production is that he didn’t do it sooner.
To understand how Doug was able to accomplish this, you need to understand a few basics about the wine industry. First, there is a high middleman cost and lots of headache when you distribute your wine off premises. Second, there is a strong market for Virginia-grown grapes. That means that since Doug didn’t reduce grape production, just wine production, he simply sold the remaining yield to other Virginia winemakers. Selling grapes is not as profitable as selling wine, but selling wine on premises through his tasting room, is more profitable than through a distributer. It’s a balance. So to offset his loss of revenue from wine distribution, Doug devised ways to sell more on site, largely through increasing the number of special events at the winery.
As my VALOR cohorts and I visit with agricultural leaders across the state, we look for leadership “take-aways,” or lessons others have experienced that we can learn from. Doug’s less-is-more lesson was my big leadership take-away of this, our seventh VALOR session. It reminded me not to always follow the pack or to make decisions based on pack mentality. It also showed me that the best solutions may lie in what may at first seem counter-intuitive.
So as we continue to meet with agriculture industry leaders through VALOR and hear about ways they’re looking to grow more profitable, we need to remember first to understand how s/he defines success and secondly that getting there may call for some difficult and counter-intuitive decisions.
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