Poultry companies should take a few lessons from history and realize the importance of "reporting the war" to the people fighting on their side, Paul Fox, CEO of O.K. Foods, said June 24 at the USPOULTRY Financial Management Seminar. He related this principal of accountability for poultry producers by saying the Trojan War and Civil War were both lost after the Trojans and the Confederates accepted a rosy picture of the situation and were caught with their guards down.
"There are those who fight the war, and those who report the war. The finance and accounting teams report the war, while everyone else is fighting it. The fighters are executing battle plans that were created within the organization, based on that organization's understanding of the year they are operating in," Fox said.
A finance team's role of reporting the war is critical, as the team creates the very basics of understanding that ultimately correct the battlefield for a poultry company. Good planning and effective execution are both dependent on a strong finance and accounting team, Fox said.
Fox cited an example of when O.K. Foods knew they needed to improve the deboning process at one facility. The company was able to make the needed adjustments because it had a thorough and detailed accounting of the processing performance.
He also related a story of another longtime processor who accepted an upbeat picture of the company's financial situation, when in fact it was severely struggling. He did not name that company, but he said it was no longer in existence as a result of poor war reporting.
While the truth about a bleak financial situation may be difficult for companies to accept, Fox paraphrased C.S. Lewis, saying, "If you seek truth, you may find comfort in the end."
Fox added that finance and accounting personnel not only need to tell their side to those in the battlefield, but also seek to learn from those on the front lines.
"Make sure you get out of the office from time to time," he said. "It's not enough to have math skills in order to be able to do your job. You have to have a first-hand sense for what the numbers actually represent."