Lessons from a vineyard

We are at the end of a long lazy ‘members weekend’ enjoying the hospitality of our favourite local winery Pfeiffer’s of Rutherglen. Reflecting on the discussions around their range of fortified wines and the way modern business and projects are focused raises an interesting paradox.

When you are taught to drive fast, the key lesson is the faster you go, the further in front of the car you need to be ‘driving’. Quick reactions are not enough, you need to be planning and positioning the car now to be in the right place to two or three curves down the track.

Modern business is going faster and faster and pressures are on projects to complete quicker and better but unlike racing drivers, no one seems to be planning ahead – if there is a panic on the current project, everyone forgets about transiting staff onto the next project sensibly. Rather than optimising the overall outcome to benefit the business ‘down the track’, the short term focus outweighs the long term benefits and produces suboptimal results.

This destructive short term focus is encouraged because most business management and directors seem to concentrate on satisfying the demands of short term speculators rather than the needs of the organisations stakeholders. Commercial companies are driven by the needs of the high speed traders operating second by second, day traders and other short term speculators who are only focused on movements in the share price, not the long term health of the organisation and its ability to meet the needs of the majority of its stakeholders. Consequently, the daily and quarterly share price movements seem to mean more than long term plans future growth.

A classic example is the regular announcement by major corporations that they are sacking 100 or 200 staff. This creates an immediate boost in the share price and makes management look good to the short term speculators whilst destroying the organisations relationship with all of its staff. In reality, the monthly staff turnover is more than enough to make this type of adjustment in a smooth way that looks after the interests of this group of key stakeholders, the employees that actually do the work needed to allow the organisation to operate. But few managers seem to even ask what’s more important – share movements over the next couple of days or maintaining and enhancing the relationship with the organisation’s “most important asset”, its people??? Apparently the speculators win every time in the mind of management.

The situation is not much different in government organisations where the focus seems to be a combination of the 24 hour news cycle and short term personal advantage, a focus on ‘petty politics’ rather than long term policy and the good of the organisation. Different drivers but the same outcome, a prioritisation of immediate gratification over long term best outcomes.

But what has all of this got to do with fortified wines??

The simple fact is you cannot develop world class fortified wines in a generation. Pfeiffer’s are now into their 40th vintage and in the last three years have succeeded in rounding out their range of both Muscat and Topaque to include a good example of all four classifications of these wine types. The classifications below are defined by the characteristics of the wine, not by age, but in general terms:
The ‘Rutherglen’ classification is blended from wines that are on average 5 years old;
The ‘Classic’ classification is on average 12 to 13 years old;
The ‘Grand’ classification is on average 18 years old; and
The ‘Rare’ classification is on average 23 to 24 years old.

But the average age is misleading, all four classifications include some of the original blend created 30 or 40 years ago, that has been topped up and enhanced every year since. Obviously there is a far higher percentage of old wines in the ‘Rare’ compared to ‘Rutherglen’ classification but all of the wines have the same origins. In short, the characteristics of the current wine are based on decades of decisions ranging from how to manage the vines and the vineyard, how to develop each barrel of wine and what to add to the residual ‘base’ carried forward from last year to create each year’s release across all four classifications.

The decisions of 5, 10 and 30 years ago have an influence on the wines of today which puts a relatively new winery like Pfeiffer’s at a disadvantage when competing with some of their Rutherglen neighbours such as the Morris family who have stocks that have been developed over more than 100 years.

The current generation of winemakers do not see themselves so much as the ‘owners’ of the current stock of fortified wines, rather the custodians of a heritage that they hope will go on developing and improving for generations into the future. This is true of all types of blended fortified wines and is one of the reasons old world wine regions such as the Ports of Portugal and Sherries of Spain have characteristics that are hard to replicate in newer countries such as Australia that only have 100 to 150 years of development.

In many ways organisations are similar to a wineries stock of fortified wine. The current group of managers are the custodians of a complex set of capabilities, facilities and cultural beliefs, behaviours and relationships that have been created by the thousands of decisions and actions made by their predecessors and their decisions will create the organisation that will be passed onto their successors.

For example, a new ‘culture change’ initiative by current management does not start from a blank canvass, the outcome will inevitably be coloured by everything that has gone before that has created the current culture, and will inevitably influence everything that happens later. It is impossible to erase the past without erasing the organisation!

The paradox is that far too many managers seems to act as owners with a focus that extends days or months into the future and their directors look at reports focused on the past, whilst the organisation needs a focus that is long term and future focused to meet the needs of its stakeholders.

Perhaps a weekend at a winery that produces a world class range of fortified wines could pay real dividends…..