Happy cows = happy staff

Happy cows make great pictures. They're also more productive. But there's a fascinating extra dimension to animal welfare: farm staff are happier. And that's a virtuous circle as it leads to higher engagement by the employees, who in turn look after their animals better – from both a welfare and productivity perspective.

"To manage a really efficient organisation, as managers we must ensure the right environment is there to realise the potential."
Anouk De Blieck, Hong Kong-based General Manager Human Resources, ANZ

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Just how the wellbeing of cows influences employee engagement was an interesting experience for a group of ANZ bankers, including me, while on a strategic leadership program in the southern Chinese province Guangdong, visiting a dairy farm owned by Fengxing.

The transformation this dairy farm went through over a short time to become a 'model branch' was quite amazing.

The farm started off in 2013 (one of three dairy farms within the Guangzhou group) and today runs around 2,000 cows, mainly stock from Australia, New Zealand and also Chile.

Besides being impressed by their ambitious growth plans, I was blown away by how they run their operation. I must admit before visiting the farm I was concerned I would feel sorry for the welfare of these cows.

I know from growing up where I did in Belgium, dairy farms do not always have a good reputation for treating their animals well. So one of the most encouraging things for me on a personal level, leaving aside being a banker, was how well the cows looked and how well they were treated.

After visiting the farm, I could empathise with these cows and I was particularly impressed with the pride and care the employees showed for the herd.

However, from the perspective of a banker and business person, what was particularly significant was the quality of their milk: it was substantially better than other Chinese production and is now very close to Australian standards, acknowledged as among the best in the world.

The important point here was the wellbeing of the cows was not just humane, something valuable in its own right, but crucial to a superior quality product. The key to Fengxing's success is the wellbeing of their cows, improved by following some of Australia and New Zealand's best practices.

They implement the newest techniques to make their cows comfortable - from the 'bed' they sleep on (yes, they have a foam mattress which is a very new technology there) to the cleanliness of the floor. Clean feet are critical for cows because it reduces the risk of infection which would in turn affect wellbeing and milk production. Fans are used to produce a nice 'breeze' in the warm weather and they can get a regular 'back rub' massage if they want (I know I would).

With the infrastructure at Fengxing, 'milking' becomes a special event every day for the cows.

Advanced technologies are also used to improve the productivity of the herd. Breeding technology is now at a stage where the farm can produce 98 per cent female cows (it is amazing how predictable reproduction can become).

Since establishment in 2013, Fengxing Milk has built a complete industry chain, including dairy cattle feeding and dairy products processing. Currently, it owns around 6,500 cows on three major ranches located in Zengcheng, Conghua and Nansha. 

Fengxing's philosophy is to combine high quality dairy inputs with the best cattle feeding experience to improve the final quality of the dairy end product. Annual processing capacity of dairy products is currently 40,000 tonnes.

As existing self-produced milk cannot fully support the scale of the downstream dairy products processing capacity, extra milk input sources, in the form of milk powder, is procured from overseas.

Fengxing Milk is a local brand in Guangzhou city. Due to its existing limited production scale, its customer base is mainly citizens living in Guangzhou. However, Guangzhou is a large city in its own right with a population of 13 million.

Milk consumption has been growing rapidly as the disposable income of residents increased in recent years. Currently, Fengxing Milk has 600 milk chain stores in Guangzhou and the company is also the designated milk supplier for students in whole Guangzhou area.

The farm we visited has built its own 'green' eco system where they develop their own crops, recycle and produce power through grass and recycle their water. This is not just environmentally sound but reduces input costs: the more waste products can be turned back into productive feed or used to fertilise pasture, the more efficient the operation.

Besides seeing these happy cows (especially when they were getting a massage), the enthusiasm of the employees couldn't be missed. They were really proud of taking good care of their cows and no doubt each of these cows had an important impact on them.

The employees are encouraged to come up with ideas to innovate, optimise and find ways to continuously make things better. That in turn produces even better milk for the farm's customers.

Coming away from the trip, I have no doubt this farm has all the ingredients to achieve its goals.

There are broader lessons here too. In today's world, more and more do we recognise the wellbeing of employees is crucial. We don't want our staff to feel overwhelmed or under undue stress or high pressure. To manage a really efficient organisation, as managers we must ensure the right environment is there to realise the potential.

And of course, what I don't mean is our staff are like cattle. Rather, our staff are the most important element in delivering a superior business outcome, whether that is more, better quality milk or superior customer service. It is the satisfied staff we must work on.

The leadership of organisations has a genuine opportunity to create the right environment to have the sort of open dialogue which empowers employees to try out new things – and it is that which results in driving the change which can deliver a better outcome for our customers.

Organisations that do that well will be able to differentiate themselves, have happy employees, be able to unlock discretionary effort and be successful in serving their customers. Taking care of our own before we can take care of our customers is an invaluable insight. Our dairy farm has shown us that …

Foreseeing the huge market demand, Fengxing Milk has sped up their expansion plan in recent years. It is estimated that in 2017, capacity of both dairy cattle feeding and dairy products processing will be double.

And Fengxing knows that if that ambitious goal is to be achieved, they can't forget about staff engagement. After all, happy staff means happy cows and better milk.

Anouk De Blieck is ANZ's Hong Kong-based General Manager Human Resources - International and Institutional Banking. You can read her take on corporate kissing here.

The views and opinions expressed in this communication are those of the author and may not necessarily state or reflect those of ANZ.

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