Milk Source Fosters A Culture Of Respect And Leadership
Managing one dairy has its own set of challenges. Try managing 10 dairy operations across four states with more than 640 employees like Milk Source does.
Milk Source has proven managing that many operations doesn’t mean the challenges of managing an individual dairy are magnified tenfold. Instead, putting the right protocols in place, the right people to manage them and a culture of respect and leadership multiplies success across all the dairy sites.
“We started with three employees and 180 cows,” says Jim Ostrom, who started Milk Source with two other partners he met at University of Wisconsin-Madison, John Vosters and Todd Willer.
“I’m the cow guy,” Vosters says, who also manages the majority of the 640-plus Milk Source employees.
Willer is the operations manager and handles anything related to equipment, facilities and environmental
regulations. He also manages capital expansion projects. Ostrom manages business, planning and the “department
of tomorrow,” as he calls it.
Those first 180 cows were milked at the current Milk Source headquarters, Tidy View Dairy near Kaukauna, Wis. Today, that dairy milks about 6,100 cows, far from its more humble beginnings in 1994. Today, Milk Source has added another nine facilities; four dairies and a calf-raising operation in Wisconsin, two dairies in Michigan, a heifer facility in Kansas and a dairy in Missouri. The Missouri dairy is the most recent addition, beginning production under Milk Source in early June 2017.
Herd sizes range from 2,700 to 9,000 cows. In addition, Milk Source has a world-class genetics operation, plus
partnerships in three small cheese businesses. A cheese business in Pittsburgh, Penn., called Lamagna is also part of the Milk Source group.
Getting from 180 cows to where they are today certainly didn’t happen overnight, but started with a vision and a little paradigm shifting.
“We understood what was going on in the West and realized there was nothing about Wisconsin that said it couldn’t be done,” Ostrom says.
When Milk Source started expanding in Wisconsin, there wasn’t a model to adopt because not many dairies had followed that aggressive growth path. That meant the Milk Source partners had to improve as they evolved, learning from challenges and mistakes along the way.
“One of the early mistakes we made is [that] we bought a second site when we could have waited and expanded aggressively on the first site,” Ostrom says, adding that anyone looking to start a dairy on another site should maximize the home operation first. “I would take down every building in our way—parlors, shops, old buildings—to maximize one site first.”
Once facilities are operational, each dairy follows a predetermined set of management protocols.
“Major management areas like milking routine, fresh pen management, reproductive schedules and so forth are all very clearly defined,” Vosters says. “The plan is usually right, it’s the execution of the plan that is usually flawed if performance isn’t where it needs to be.”
Once training is done, employees manage against procedural drift. “It’s all tasks that people know how to do, but it takes a while to get to an acceptable standard,” he says. That’s why new sites take extra energy and commitment, Vosters says.
“You may have employees that have come from other sites but you still have to get to that expected level of performance,” he says.
Having 10 sites to manage means the three partners can’t be at each site all of the time, even though it is common
for one or more of the partners to be out visiting dairies three to four days per week. That means they need
high-quality employees at each site who can manage the operations when the partners aren’t around. With the
shrinking pool of labor candidates, plus other non-dairy employment options available, finding the right people is challenging.
“[The shrinking labor pool] places a much greater emphasis on leadership, both at the top of the dairy and
throughout the various departments on the dairy,” Vosters says. “Each department has to have really good people who are able to engage with the people they are working with.”
Creating and fostering leaders who can engage with others is both a priority and a challenge for Milk Source, and it’s a challenge for corporate America as well. According to research from the Corporate Executive Board, 66% of companies invest in programs that aim to identify high-potential employees and help them advance, but only 24% of executives consider the programs successful. A mere 13% have confidence in the rising leaders at their firms. According to executives at the global executive search firm Egon Zehnder, the problem with leadership development isn’t a lack of talent.
“Unfortunately, many organizations haven’t figured out how to fully develop their prospective leaders. That limits these people’s advancement and eventually their engagement and, ultimately, leads to turnover,” they say.
The emphasis on leadership at Milk Source started a few years ago when the partners compared employee turnover on each entity. Each operation is competitive with the other and no individual dairy wanted to be at the bottom, especially with regard to employee turnover.
“Turnover is usually directly related to leadership, so it made each leader focus on their own people skills and the people they were developing,” Vosters says. “It was crystal clear to us that it wasn’t the people with the greatest skills or knowledge that we should promote, it was the people that can engage with and lead other people.”
Some employees may be great performing the tasks that are asked of them, but if they can’t engage with others they aren’t as valuable as those who can and they can’t be retained in vital positions, he says.
Good leaders have the respect of those that follow them. That’s why respect is at the center of the culture at Milk Source, across all sites.
“Fifteen years ago culture wasn’t even front of mind. Today it’s central to what we do,” Ostrom says. “Culture is something that has to be nurtured every day, and if it gets ignored the result will be dysfunction and poor performance. We work at it every day.”
The first part of respect, Ostrom says, is self-respect. “If you have enough self-respect to invest in yourself and learn more, that’s the kind of culture we want to lead,” he says.
Next comes respect for fellow employees, for animals, for the facilities and for the neighborhoods and communities in which the dairies operate and employees live.
“We encourage behaviors that are part of our culture and that are identity to the company,” Ostrom says. “It is important to have leaders that are in the right positions with the right mindset about our culture.”
Willer says fostering culture is what enables the dairies to operate without the partners’ constant hands-on management.
“Without our corporate culture we couldn’t do what we do,” he says. “We have to rely on culture and great people to carry forward our culture and our efforts.”
Culture starts with providing the right development opportunities to employees that show it, Vosters says. That means sending employees that show an aptitude for leadership to training seminars and leadership classes.
If a person has a desire to fill a role, they are encouraged to achieve that goal. Even though positions don’t often
open up on existing dairies, as Milk Source expands, positions become available at new dairies. Those who
strive for leadership are encouraged to fill those spots, Vosters says.
“We constantly stress that people have to be prepared when an opportunity comes along,” Vosters says. “You can’t develop those skills after the opportunity is available. You have to be ready when the opportunity comes and have demonstrated ability before the opportunity arises.”
An ample supply of leaders ready to lead gives employees a chance for growth, and it helps new ventures succeed. Success on one dairy encourages others to match it.
“Individually people can’t always have an impact on output, but they can impact execution,” Vosters says. “The teams that can get the job executed with the highest degree of precision are a result of their leadership and employee development. One of the biggest recognitions for them isn’t the actual performance result but the people development.”