Transcript of the approaches to help farmer decision-making webinar
Alice Ritchie:
Our webinar today, in our Climate Webinar Series is on approaches to help farmer decision making. Today, Cam will cover what influences decision making and present an approach to enhance farmer decision making. Cam Nicholson is a partner in Nicon Rural Services, a consulting business near Geelong, working with the grazing and cropping industries and in natural resource management. Cam has been involved in many farmer programs for the GRDC, MLA, Dairy Australia, Southern Farming Systems and Landcare.
Alice Ritchie:
He provides consultancy advice to farmers and lectures on animal and pasture systems at Marcus Oldham College. His most recent work has focused on understanding and discussing risk in farming businesses and how to enhance decision-making. He and his wife Fiona run a 400-hectare beef and sheep farm on the Bellarine Peninsula turning off cattle for the long fed Japanese market, and lambs and wool. I'll now pass over to Cam Nicholson from Nicon Rural Services. I'll pass you across. Yes. Rightio. [Crosstalk 00:01:11], Cam.
Cam Nicholson:
[crosstalk 00:01:12].
Alice Ritchie:
It's all yours.
Cam Nicholson:
Thank you, Alice. I'll just get ... Hopefully we've got the PowerPoint slides in front. So, Alice, can you just confirm that you've got-
Alice Ritchie:
It is right there. Perfect.
Cam Nicholson:
Beautiful. All right. So, firstly good afternoon everybody. I've been fortunate enough to work with some fantastic producers over the last 30 years that I've been in the consulting game, or the advisory game. And there are some really great farm managers that I've been involved with. What fascinates me is that some of them seem to be able to make the right call more often than not. Where I see others that even though we're faced with similar circumstances and similar conditions, and have similar opportunities make different calls for whatever reason.
Cam Nicholson:
And it's been a longstanding curiosity of mine of trying to work out, why do some people make the calls they do, and why do other people make different calls? And it's been a motivation for a lot of this work. And I suppose the observations that I'm going to share with you in the next half hour or so, are just how decision making have identified as being such a huge part of what separates those farmers that seem to, in my mind, make good calls at the right time.
Cam Nicholson:
And so, I just want to share with you some of the things that I've learned as I've been observing and doing some research and some work on that. Let's start off, though, with a couple of quotes. And one, this came from a farmer when I was doing a road show tour in Western Australia through the WIA wheat belt with GRDC seeing a group of other people.
Cam Nicholson:
And, I was talking about decision making and a comment to me was, just because we make decisions all the time, doesn't mean we're good at making them. It got me thinking, now we make hundreds of decisions a day. A lot of them we don't even think about, what do you have for breakfast? What clothes do you wear? You make some more conscious decisions like, ‘Will I join this webinar today?’
Cam Nicholson:
So, we're making choices all the time, but just because we make them, her point was, it doesn't mean we're any good at making them. We have to make them and we do make them, but it doesn't necessarily mean we're good at it. And that really got me thinking, when we are taught to make a good decision, I just want you to think about that for a tick. I can remember at school being taught how to read, how to write, how to do arithmetic, but I can't put my finger on a time when I was actually taught the subject, good decision making.
Cam Nicholson:
And it's just something that I reckon we're expected to pick up, if you like, organically, pick up as you go. When I don't necessarily think that's probably the best way of becoming good decision makers - just hoping you get it through osmosis and observing other people as opposed to, say, being taught some good practice and some good skills around it.
Cam Nicholson:
So, for me, decision making is a skill, and I want to reinforce this. And by a skill I mean that it's something that we can get better at. We can learn and get better at. We can be taught. And the more I've done work into this, I realised there are actually ways and processes to learn about decision making, and it can be practiced. And the more you practice it, the more you get better at it.
Cam Nicholson:
It becomes second nature to you, and you do it better. You do it without thinking, but you do it with a more, let me say, rigorous process around those decisions. And you can become confident in making better decisions, and I've got no doubt about that. Some of the clients I've worked with, I've seen some quite substantial differences in the way they make some of their management decisions once we get a good process in place. And that's ... I'll show you a couple of examples of that in the second half of this talk.
Cam Nicholson:
But first of all, I just want to recap on a few things that I reckon have struck me in this decision-making thing. So, what I've learned about decision making. The first one I want to talk about very briefly is this difference between a good and a right decision. Everybody wants to make right decisions all the time. The reality is they don't always turn out right. And it's particularly true in farming because we often have to make a decision. We have to make a call, we have to choose to do something, and then there's a whole lot of somewhat unknowns that occur before we get to the end point, or the decision at the end.
Cam Nicholson:
So, at the start of a season, we might call on a whole lot of things and just hope the season's going to pan out the way we might like it to. So, what's the difference between those two? A good decision is an informed one, a right decision you can only tell in hindsight. So, it's once a dice has been rolled, you know the results. You look back and go, ‘Oh gee, wasn't that a good decision,’ or, ‘Wasn't that the right decision to make?’
Cam Nicholson:
And, in fact, what I want us to all think about is this idea about, the best we can do is make good decisions, and those good decisions, in my mind, the definition is they're informed decisions. So, at that point in time, did we consider all of the things that we could have considered with the information that was available at the time?
Cam Nicholson:
So, that's the first point. The second one around this good and right decisions is, for me, part of the informed decision is this understanding around risk. Okay. Because we have to roll the dice, if I want to make an informed decision, I really want to know the odds of some of these things happening. And good decision makers inherently think about the odds. I think about, ‘Oh, it's a 70 per cent chance, or an 90 per cent chance or this.’
Cam Nicholson:
So, if we bring it back to a climate type example, when you hear things like it's going to be an above average rainfall season, or it will be a below average rainfall season, doesn't guarantee it's going to be below. It just tips the odds that it's more likely to be that than something else. And in my decision making, I think about that and think, ‘Okay, well the odds are that it's probably going to be a bit more on the low side than the high side.’ And I put that in as one of my considerations in making decisions. And again, I'll show you an example of how that's used towards the end of this webinar.
Cam Nicholson:
Second thing I want to talk about of what I've learned in making good decisions. This is a little diagram, and I've said to people when I do this in a workshop that if this is the only thing you remember from today, then I'll be a happy person. And I call it my head, heart and gut diagram. And it's really thinking about what influences your decision. And I call them those three factors: head, heart and gut.
Cam Nicholson:
The head is what I'll call the logical, or the analytical. It's, sort of, the facts and figures. The sort of stuff when you go to a field day or you read something, or you go and see someone's trial, they've got all the facts, they've got the numbers, they've got the results, if you like, of what's happened. And quite often they analysed statistically and all that sort of stuff. But, it's the facts and figures bit of it.
Cam Nicholson:
And quite often we like to think particularly in a ag advisory, we like to think if we just put the facts in front of people that will influence a decision enough that they will make the call according to what the facts are telling them. But, as we all know, and there are lots of examples of this climate change being one of them, but lots of others where just because the facts may say one thing, people choose to make different decisions, even though the facts might be saying one thing. Or the science might be telling you one thing, people still will pursue different decisions, and argue in different ways.
Cam Nicholson:
And that's because of these other two influences. One of them is the heart, and the heart is your values, your beliefs, your biases, your preferences, all of those things that are hard to put down as facts and figures, but have an enormous influence over the decisions that you make. And I always think the harder the ones that you're willing to defend them, even though in some cases they don't seem logical, but people will stand there and defend their position. That's their heart talking, and their heart is powerful in some cases countering what the facts might be saying.
Cam Nicholson:
Then you've got this third influence that I call the gut. I imagine most people have heard of a thing called gut instinct, or gut feel. Gut influence in decision making for me is that intangible when you think, ‘Gee, I've made this decision, but it just doesn't sit quite right with me.’ Something is not quite right about it, that's your gut talking to you. And that's your gut influencing the decision that you're going to make.
Cam Nicholson:
Two things inform that gut feel, or the gut part of the decision making. One is your intuition. So, you just, you've got this innate sense that, say, something's not right, or now I don't think that's the way it should go. And it's also very strongly informed by your past experience.
Cam Nicholson:
So, you'll find people that have been around the block, people that have gone through a number of droughts, will think about the decision differently to someone that's never been through one, that's never experienced it before. And I find this with my marker students say quite good and we can teach them a lot about the head side of things, but then they'll go home and mum and dad or someone else in the family farm will be saying, ‘Hang on that, we've tried that before. It doesn't work.’ And there'll be that conflict, because what seems to be the facts, someone's actually had experience that is different.
Cam Nicholson:
And it's important when you've got these gut ones here that we make sure that our past experience is relevant for today's decision that we need to make. But, if you can just keep in mind this bloke that spoke about head, heart and gut and that we shouldn't be afraid of putting all three of those on the table when we're thinking about out decision-making, I'll be pleased.
Cam Nicholson:
A couple of other things before I move off this slide. One is around temperament. And this is a topic big enough for a webinar in itself, but basically your personality, or your temperament will influence the decisions you make. And I see this a lot. So, if I go onto a farm, and I see a farm where the gates all look like this. And if you can see this picture, the gate's actually wired up there. So, the latch is wide up, and there's a couple of other bits of wire on there because the sheep keep getting out.
Cam Nicholson:
I can tell you that a farmer that has gates that looks like that on the farm compared the ones where the gate looks like that, and it's got one of those spring latches on it. The reason why the gate looks so neat is because it's been welded in here. If you could see where I'm pointing at the moment. To be extended and it's had some coal gal put on it so that it won't rust in the future. I can tell you those two farmers, they will make different decisions because of the different temperament.
Cam Nicholson:
And I can start to pick that by the way the farm looks, and the way people do things and how much the head, the heart and gut has an influence on that. That would be exactly the same if I see a workshop that looks like that, and that's actually a real workshop. That's some photos taken in South Australia. A farm workshop compared to a workshop that might look something like that.
Cam Nicholson:
If your workshop looks something like that, you'll be a different type of decision maker compared to someone that's got a workshop that looks like that. Now importantly, both of those decision makers have strengths, and both of them have some pitfalls and weaknesses - your temperament, knowing those and being able to rectify those strengthens you as a decision maker.
Cam Nicholson:
And the last one that I'll finish on is this idea about complexity. So, by complexity I mean that in a lot of cases the decisions we've got to make, there isn't only one thing to consider. There are multiple things, they can go together in multiple ways. In other words, there's no one right answer.
Cam Nicholson:
If you want to turn a profit in a farming business, there are lots of different ways you can turn a profit. There isn't a recipe. There isn't one approach to use. A lot of the things we do in farming are complex, and because they are complex, the head, the heart and the gut all come into play in informing that decision. Compared to something that I might say is like a simple decision. So, let's say you needed to drench some sheep, how much drench do you need to give them? How many meals do you need to give them?
Cam Nicholson:
Pick up the drum, you look on the label and it says, it takes many mm for every 10 kilos of live weight. And you adjust your gun up accordingly. That's a relatively simple decision. And quite often if you've done the same thing for the last 10 times, and the animals look the same, you don't even think twice about it. You just do the same dose as you did before, because it's worked in the past. But, for a lot of decisions and the ones I'll focus on more so are these more complex type decisions.
Cam Nicholson:
Now, because of that complexity, there are commonly many critical factors to weigh up. As I said, there's rarely just one or two, there's often a bundle of them that we need to weigh up. And importantly, not all of those factors are of equal importance. So, while we may need to consider a number of different factors, some may be more important or more influential in your decision than others.
Cam Nicholson:
So, somehow we've got to, first of all, be able to get a lot of those critical factors on the table, but then somehow be able to weigh up how important each of them are relative to each other. So, I talk about this idea of pros and cons, and we make decisions on balance. And a good decision, an informed decision is on balance, this is probably the best way to go.
Cam Nicholson:
So, there will be pros, they will be cons. We're not dismissing any of those, we are just trying to balance them up, or weigh them up relative to each other so that on balance we'll make an informed decision that's taken those into account. Importantly, you think differently about your decision as conditions change, or as the risks change or as the odds change. And I'll explain this a little bit more in the next couple of slides. And what I'd like to do is just a quick quiz with you. Now, you're not going to be able to answer the question for me. So, this is a quiz you will do at home. And you just need to make a call on the options I'm going to give you fairly quickly, and I'll talk them through.
Cam Nicholson:
So, you're a farmer running a particular operation. So, you're running a farming business. Your farm operating profits, so that's your gross income less your variable overheads, and labour costs this year was $200,000. So, in simple terms, think about it, you made $200,000 profit this year, even though it doesn't include interest in tax and that sort of stuff.
Cam Nicholson:
But next year you're going to make a choice. You're going to make a decision, and your choice is that you could keep the same operation and get a certain farm operating profit of $200,000, or you've got another choice. You can change your operation, so you make a decision to change. And if you change you've got a 50% chance of getting $400,000 or a 50% chance of getting nothing.
Cam Nicholson:
So, you've got two choices; choose the same operation and get 200,000 or change the operation with a 50 per cent chance of 400,000 and a 50 per cent chance of zero. Just think, which one do you choose? And your two second job, you're either going to choose A or B. And I'm sure people are screaming at the screen now saying, ‘Yeah, but it depends on your circumstance,’ and of course it does. But, given the circumstance that you think he would be in at that point in time choose A or B.
Cam Nicholson:
All right. Now, if I was only looking ... Sorry, I'll go back to that. If I was only thinking about it from a head point of view, in the long run, those two will work out exactly the same. You'll get 200,000 every year, if you roll the dice 50 times, and it's likely that for B, you will get at the end of the day an average of $200,000 a year, if you roll the dice 50 times. But, it will be some years you'll get 400,000 and some years you'll get zero and it'll even itself out.
Cam Nicholson:
We all know that this choice B, 50 per cent chance of 400,000, and 50% chance of zero, there are other circumstances if the dice roll in a certain way where we might get three years of zero in a row, and that's going to be more difficult than getting that certainty of the $200,000. So, I want all the people now who choose B to ... sorry, that chose A to think about this.
Cam Nicholson:
If you chose A, what if the enterprise mix, when you made that choice, there was a 60 per cent chance of getting 400,000 and a 40 per cent chance of getting zero. Would you change your decision? If not, what if the odds were 70 per cent and 30 per cent chance of getting zero? Would you change your decision? And for the people that are pretty rested on and want certainty, what if there was a 90v per cent chance of getting 400,000 and a 10 per cent chance of getting zero?
Cam Nicholson:
Now, I suspect that people would have made change their decision as the odds changed. So, as we went further down, and we got more certainty, the people that had chosen now I want the security of 200,000 will have changed that decision. The people will have jumped at different times. And so, an important point about understanding these odds and risks is that it's personal. There's no one right answer. What I might choose and what your neighbour might choose are both valid choices.
Cam Nicholson:
I don't think that whenever you see odds, and the odds are there's a 70 per cent chance of something everybody should be jumping because your personal circumstance, your temperament and a whole host of other things will influence when you want to make that call. But, the important thing is, you do change when these odds are different.
Cam Nicholson:
Other important thing to say around this, these are actually risk statements, because risk by definition is a likelihood by consequence. These odds, 70 per cent chance is the likelihood, $400,000 is a consequence or the result of it. So, we're making different decisions as those risk statements change, as the odds change in the circumstance that we're punting with change, we will make different decisions. So, just keep that in mind when you start to see the next bit of information I'm going to show you. So, I might actually just pause there for a second, Alice, and see if there are any questions before I move on.
Alice Ritchie:
No worries. So, we've had plenty of responses of people saying A and B, which is excellent. So far there are no screaming questions that I can see because everyone's been too busy thinking about what their options would be. But, we'll keep collecting them.
Cam Nicholson:
Okay. No, that's all right. I just thought it was a point, the pause on that theory before I actually jump into a practical example of how you might pull all that together.
Alice Ritchie:
Yeah. No, at the moment, we've just got a comment from Graham saying, ‘This is great stuff. Thanks, Cam.’ Oh, here we go. We've got one hand up. Hold on. I'll just see who we've got. And, let me see. Sorry, I'll unmute. We've got Lou Hogan. I will unmute. Well, let me see. I'm trying to ... this'll be interesting. Sorry about this. That's the part I'm looking for. Apologies. Audio only. So, Lou, can you hear or can you speak to us? I've just un-muted you. All right. It's not coming through. We might save it for towards the end. How about that?
Cam Nicholson:
That's all right. Yep, no problems.
Alice Ritchie:
All right, thanks.
Cam Nicholson:
Okay. So, how do you ... I'm hitting the slide there is, how do you bring all this together to make good decisions? So, all of that theory, how do you try and bundle all this together? So, what do we have to do? We've got to include the head, heart and gut influences, which I said were important. Do we incorporate risk? And as I've said, that's personal, and we need to think differently as those odds change.
Cam Nicholson:
We need to weigh up multiple factors as I mentioned. And they might not all be of equal importance, which again is an important part of [inaudible 00:22:55] this. And, we need to balance which one I didn't touch on..balance the timeliness against the time to think. Now, sometimes we can overthink decisions. We've got to strike that right balance between how much time do I spend on it, and then make a decision and move on as opposed to getting bogged down and almost getting paralysis that I can't make a decision because I can't think of the way through it and pull the trigger.
Cam Nicholson:
I could say I've done quite a bit in the last 12 months up in Queensland in some of the drought areas up there. And one of the biggest challenges we've got is people just cannot make the decision, which I think are really hard decisions, absolutely. But, the decisions to sell stock spell country and stuff like that. And so, I've recognised that the time on this is a really important one.
Cam Nicholson:
Now, I put on the right-hand side of the book there by a fellow named Daniel Kahneman. He's a professor at Princeton University in the US. He won a Nobel prize for this book on this thinking. It's not a holiday book, it's something you read when you want to learn stuff rather than relax. But his argument was that, far too often, we make decisions too quickly, and we make decisions based on ... what I want to say...rules of thumb, or past experience, and don't just pause for long enough to actually think, are the circumstances different, and is the gut feel or the habit that I've got into, is it applicable to this next decision?
Cam Nicholson:
It might've been good for the last one, is it also applicable to the future one? So, there's a balancing there between those two. So, it's a great book. I found it really useful, all of Daniel Kahneman's stuff is fantastic if you're into this sort of thing. So, how do we pull it together? Talk about a thing called a decision matrix.
Cam Nicholson:
Now, that fellow on the screen there is Barry Mudge. Some people may know Barry, he's a farmer and a consultant in South Australia in pretty marginal rainfall country, and does a lot of cropping. Runs livestock as well, but does a lot of cropping. And the first time I saw this idea of the decision matrix was with Barry and he pulled this together himself, because he said one of the biggest decisions I have to make each year is, ‘How much crop do I sow?’
Cam Nicholson:
He'd worked out exactly the sort of things that I've been talking about before that there are multiple things that you got to weigh up that the odds change, and as the odds change, my decision should change, and my thinking should change. And he's talked about years where he's hardly sown anything even though he's got thousands of hectares because the odds at sowing aren't stacking up right. In other years he's fully [inaudible 00:25:34] back and gone absolutely flat out because a whole lot of factors are stacking up right for him. So, he goes for broke under those conditions.
Cam Nicholson:
And that's where I first got this idea around the decision matrix, and I've refined it beforehand, but if I needed to acknowledge Barry's work on that because it's really is fantastic. So, I want to give you a couple of examples now of how we put these decision matrix together.
Cam Nicholson:
The scenario I want to do to try and keep with this sort of a bit of a climate theme, is if you could just imagine you're a cropper and you wake up one October morning, and there's been a severe frost. I'm sure anybody that's cropped will have had these frost experiences, and you just get that sinking feeling when a killer of a frost and all the wheats just been flowering, right in the middle of flowering and we get these really severe frost. The information everybody will tell you, you're going to make a decision early. You know, make the decision, basically get the mower out that morning and start cutting.
Cam Nicholson:
And so, that's a really critical decision, particularly when you've spent and put so much time and effort and love into trying to get that crop going. And it's usually probably the bumper crop that's been the most severely frosted. So, what do we need to do? We need to make a decision. First step in pulling these matrices together, is you need to define what that decision is.
Cam Nicholson:
So, run through this example. I've said here, should I cut this crop for fodder, or take it through for grain? So, that's the choice that I need to make. That's a decision I need to make. And it's the first step you've got to be clear on what the decision is that you need to make. In the second step, is to list the major considerations that should influence a decision. And there are likely to be many factors and I'll show you some of these that I've come up with.
Cam Nicholson:
So, what are the major considerations? Obvious one and probably the first one is how much the paddocks frosted, or the area is frosted? But there are other things I know I need to weigh up as well. So, there are things like, what's the grain value if I harvested what might be left compared to the other use for the fodder.
Cam Nicholson:
Other things like, what's the likelihood the unfrosted part of the crop would finish. So, it's one thing to say all this bit didn't get frosted, but if it's not going to finish anyway, I probably should think differently than if I think yes, that's got a real chance of finishing.
Cam Nicholson:
And then there are some of those less crop related things, but still important in a decision. Things like, do I have fodder storage? Have I got sheds if I cut this that I can put it into? Is there a market to sell it into? What's the point of cutting it if it's going to sit there for the next 10 years and I can't move it? Do I have problem weeds that if I cut for hay, I could clean up?
Cam Nicholson:
So, there are other things. What I'm stressing here, there are other considerations beyond just ‘it's 80 per cent frosted, I should cut it.’ There are other things we should be balancing or weighing up. Now, you might look at that list and say, ‘Oh, I wouldn't include that one,’ or, ‘I'd include another one,’ and you're dead right.
Cam Nicholson:
The idea of this is to show you a process, not to show you an answer. So, if you don't like some of those or you'd reword them or you'd include other things in your considerations, please put them in because that's exactly the way this decision matrix should work. It's a process I'm trying to show, I'm just using this as an example.
Cam Nicholson:
Okay. The next step on it, step three, for each of those major considerations, which I think I had six there, you ask yourself, ‘At what point would I think differently about my response? And to explain what I mean by that, they're what I call tipping points. And it's a bit like if you go back to the quiz that we did, and the odds and the tip over points. There was a certain point where the odds changed even though the amount of money we were gambling with was the same. Odds change and I change my decision from saying, ‘Yes, I'll do it,’ to, ‘No, I won't.’
Cam Nicholson:
So, in each of these considerations you will find there are tipping points when you think differently about it. Let me show you an example. We take the first major consideration of the estimated area frosted. Under what conditions would I think differently about the decision? So, I reckon if it was more than 80 per cent frosted, it almost makes up my mind for me that I'm going to cut it. What if it's below 80 per cent? And what if it was less than 20 per cent of the crop? What it was 20 per cent to 50 per cent of the crop, or 50 per cent to 80 per cent?
Cam Nicholson:
So, what I've determined here are different tipping points in my mind when I might think differently about the area that's been frosted. Now again, we can argue with the numbers, you might say, ‘Now I'll do it 70 per cent ,’ or, ‘I'll do it 40 per cent .’ That's all fine, and we can change any numbers you like in this. But the point is, we split up each of these major considerations to these different tipping points.
Cam Nicholson:
If you do that for all of them, this is what it looks like. I'm not going to work through each of them, because it's going to take us too much time, but I'll just highlight a few of them. So, for something like for the grain value, if you have, say, compared the other uses, my consideration is, is the fodder value much higher than the grain value, or is the grain value much higher than the fodder value?
Cam Nicholson:
If I think, ‘Gee, I might have lost some yield, but hang on, wheat is worth four times what I could get if I cut it for hay. And I still might persevere even with hay, half-frosted crop. Okay. So, that is a consideration that I might have. I mentioned the one about the unfrosted part of the crops. Will they finish? Is there a low chance of them finishing or a very high chance of them finishing?
Cam Nicholson:
So, what's the point? If we only had, say, 50 per cent frosted but the other half isn't going to make it anyway, unlikely to make it, that would change my decision. It probably weighted more into thinking, ‘Gee, I should cut it,’ compared to if it looked like the 50 per cent I've got was going to finish, I might think about it differently. And then you can go on to things like fodder storage, things like market to selling into. My consideration would be yes, and it's immediate. So, I'm getting cashflow straightaway. I can cut it, I can sell it, I'll get some money, compared to, ‘Gee, there isn't a market to sell into.’
Cam Nicholson:
So, all of those different considerations need to be weighed up. So, that's how you create the second column, if you like, in your table. You take each of them in turn, and do that accordingly. The way I generally do it, is what I call top and tail it - so, I take each of the major considerations, I say, ‘What would be my top end point where I'd think differently and what's my bottom end,’ and then I fill the ones in the middle.
Cam Nicholson:
Next step, assigning some scores to each of those conditions. So, this allows us to now start to put that relative weighting on what we're talking about. So, some hints in here, I assign all the lowest scores as zeros when I'm creating one of these. And I then complete the highest scores in each of those considerations.
Cam Nicholson:
And I've got there in italics ‘relative to other high scores’. So, this allows us to then wait between each of those critical considerations. Is one more important than the other? And then I'll complete the middle of the scores. Let me show you an example. So, here it is here, the same thing we were doing before. I've just put a column down the side now where we create these scores.
Cam Nicholson:
So, as I said, the first thing you do is put them all zeros. So, in this one here, the less than 20 per cent crop frosted, I'll put a zero. A zero for that one, zero for that one. So, all of these here have got zeroes on them as decision points. Then I'll do all my highest scores. And I've just highlighted two here, but you can see I've put more consideration or more value on how much of the crop is frosted compared to where the market might be sitting. In other words, I value this more than I value this, even though both of them are important to be in my considerations. It's just one's more important than the other. And you fill them out for all the rest of them. Okay.
Cam Nicholson:
Then we think about, okay, if I've got all those scores and that ... in the early stages, I should just go back and take ... in those early stages here I'm pretty rough with them. All I try and do is get the tops and bottoms right, and I have a bit of a crack at the scores then in the middle, it's got to be somewhere between 10 and zero, and they're the numbers I'll come up with. And I'll show you how we refine that in a tick. But, they are the steps that we go through.
Cam Nicholson:
Then you think about what decisions will you make based on different scenarios that might fall out. The way I'll do this, again, couple of hints. I add up all the maximum scores, the maximum scores that you've got there. So, that would be 38 is the highest number of points I could get. And I'll ask myself, ‘What decision would I make?’ And I'll do what decision I'd make under the minimum score, which are all zeroes.
Cam Nicholson:
So, I can get two descriptions on two decisions I might make, and I'll call them a bookends. Okay. They're the two ends of the spectrum of the decisions that potentially I could make. And then I describe some other possible decisions between the two extremes. Let me just show you an example of that.
Cam Nicholson:
So, if you were thinking ... now, I want to just to sit there and think as I read this out. If the estimated area frosted was greater than 80 per cent , if the grain value, or the fodder value was much higher than the grain value, that the likelihood of the unfrosted part of the crop, the finish was very low, because I had virtually no soil moisture and the seasonal forecast was unfavourable. I didn't ... I had fodder, I had storage that I could put that fodder if I cut it. I also had a market that I could sell into straightaway. And if I did that, I could successfully control some problem weeds that I've got in my crop. Just think what decision you'd make. And I suspect for most people the decision would be definitely you cut that crop.
Cam Nicholson:
Okay. Then do the other end of it, so do your bookends. So, second part of it is if we go through the same process, what if less than 20 per cent of the crop was frosted? What about if the grain value was much higher than the fodder value? What about if the likelihood the unfrosted part of the crop would finish, and that's more than 80 per cent of the crop I've got there. I don't have fodder storage, there's no market to sell into, and it's not going to help me control my weeds. What decision would you make?
Cam Nicholson:
And, again, the obvious one probably is, don't cut the crop, I'll take it through for grain. Then if we think about, is there somewhere in between the yes and no, definitely cut the crop or don't cut it. And one that I've just put in here for an example is start hedging my bets and cut some, ideally, the worst affected areas.
Cam Nicholson:
There might be somewhere in between where it's not that black and white in that decision. These scores that I've come up with here, are preliminary scores that I pick, I usually work on this to be about 70 per cent or 75 per cent usually of what the maximum could be. And this one here is around about 50 per cent of what that maximum can be. And then the score in the middle is just the difference between that one and that one. So, that's how you get that.
Cam Nicholson:
And I just do that fairly rough to start with. So, you get those two scores, and then the last step is just to test those decision scores. And the way I'll do that is I'll just run through lots and lots of different scenarios. So, if I go back to, all right, this one here, I'll just run through what if it was 50 per cent frosted? What if it was an equal value? Yes, I do have a market to sell into.
Cam Nicholson:
And so, I get a whole lot of different scores, and then I just think with my gut feel, does that actually make sense to me? Is that what I would do in real life? And would that be a good decision if I'd done that and made that call? And you can refine those few numbers towards the end.
Cam Nicholson:
Now, the bit I like about these decision matrices, is that it includes your head, heart, and gut, because some of these things that are being informed and particularly some of these conditions, they don't necessarily have to be all based on the facts. They can sometimes be an understanding that you've got, or a feeling that you've got. Some of these major considerations are based on what you know intuitively is important, so it brings those things in.
Cam Nicholson:
Also, allows you to think about some of the risks involved. So, if you wanted to be very conservative about whether you cut your crop or not, that score would change depending on how much risk you want to take on. So, for me it might be about 28, for you it might be 30 before you make the decision, or it might be 25. So, these numbers can change, again, depending on your personal preference, and where you want to sit with it.
Cam Nicholson:
I found these matrices to be really, really valuable in helping to give me a process to work out some of the key decisions I've made, or I need to make. I've got about 40 examples of these. I've done everything from stuff in the Great Barrier Reef to people deciding whether they sell livestock or not, to whether you put nitrogen on crops, to leasing land, to buying land. A whole lot of different scenarios, some recurring, some just once off.
Cam Nicholson:
But the process, the steps you go through is really, really important, and it allows two other things to happen. One, is that you've actually documented it, and it's slowed down your thinking. If you think of the time to do that, I can usually do one of these in about 20 minutes to half an hour once to get practice on it.
Cam Nicholson:
But, that 20 minutes or half an hour around potentially some pretty big decisions you might be making is time well spent. And you will find that your brain really hurts and trying to put them together, because you're slowing down your thinking and trying to describe why I do that. Why would I give this a higher score than something else? And so on.
Cam Nicholson:
The other thing that I really like about this is because it puts it on paper, it makes it transparent. Other people can see it, other people can contribute to it. And you can debate within a family about those different numbers. Why do we score the set high? Why do we do something else? We're starting to teach this at Marcus Oldham now, and I've had students give us feedback, just saying, ‘I've gone home and done this with the parents. It's one of the best exercises they've ever done, because I'd never understood why the hell they made the decisions they made. Trying to put it out on paper has actually given me far more clarity of what they're thinking about in making those calls.
Cam Nicholson:
If we get it wrong, we can always adjust it and I mentioned Barry Mudge at the start, he's adjusted numerous times his sowing decision matrix because he's learned over time that some of these with more and more experience become more or less important. Some, he's actually cut out.
Cam Nicholson:
So, I'll finish off by an example, and this is close to home. This is one we use. We've got about six or eight of these across the farm. We pull them out at regular times during the year. What I'm showing you here is just our farm. The black line is our animal demand. So, that's how much the animals are going to eat. The orange line is based on records and experience that we've got of what our pasture growth can be in an average year. I've called that pasture growth 50 per cent.
Cam Nicholson:
So, that's in an average, sort of, a year, that's the growth you get. It's a typical autumn break around this period here, try and grow a bit of feed, which we then eat into in that winter period. And then our growth rate, and we get this flush of spring growth, so on. And then we have this deficit over here that either we carry feed over from our spring period into summer, or we're supplementary feeding in this spot here.
Cam Nicholson:
That's on an average, and that's great, but it doesn't actually tell us anything about the risk. So, if I then think about that, I've got some critical points in here that we need to make some decisions on. So, one of them, which I'll show you is around May and another one is around about September. And they had these different decision matrices that I pull out, but we find them really useful in helping to clarify a decision each year.
Cam Nicholson:
This is what the graph looks like in the worst 10 per cent of years. That's what our growth is like, and that's what it's like in the best 10 per cent of years. So, from a farm management point of view, I can go from the red line one year to the green line one year. And that's what happened in 2018 and 2019 for us. Okay. We jumped from the red line to the green line in 12 months. And your farm decision-making has to accommodate that. And you need to be flexible enough for that.
Cam Nicholson:
So, if I'm in the worst 10 per cent years, I really get above what my animal demand is. So, I need to make some pretty serious decisions here about either trying to boost that red line as much as I can with certain techniques, or lowering that black dotted line by selling animals. And when do you make those calls on things?
Cam Nicholson:
So, I mentioned these two points, and I'm not going to go through them in detail, but here are two matrices that we use. So, this is the one that we use for May first of all ... Excuse me. So, a question we have at the end of May, is do we need to increase feed supply over winter? We lamb late winter, early spring, and we calf late winter, early spring.
Cam Nicholson:
The decision we need to make to buy us enough time to be able to try and boost that feed supply that we need, we've got to make that decision or make that call at the end of May not in August when we're just about ready to lamb or calf down. Okay. We've got to make this months ahead to buy us time so we can potentially make that change.
Cam Nicholson:
So, three critical factors we think about, the current feed supply at the end of May, the condition of the livestock, because sometimes even though we might be a bit tight on feed, if the animals are fat and I've got a bit of that living haystack on their back, we'll take a bit of that off rather than unnecessarily grow extra feed just for the sake of growing it.
Cam Nicholson:
And another one is around where we're sitting with supplementary feed. And so, each year at the end of May, we pull this out and we give it those scores, and we look at what decisions we'd make. And some years it just seems stupid. You know, why you plant, we've got feed coming out our ears, the animals are fat, everything's great, why would you bother with this?
Cam Nicholson:
It's more about the discipline of doing it, that's more about what you learn about the scores, and where they sit. We've got one here for the feed supply over winter, and this is another one that we use early September. Do we need to adjust their stock numbers to carry through spring and summer? And it's a bit more, it's got a few more critical factors in it than that one had in May. So, that's around feed supply, it's around seasonal forecast.
Cam Nicholson:
Stored soil moisture is important to us at that September period. Prices of livestock, both current and future and where our supp feed fits. And you'll see in some of these, all we're talking about are deciles or quartiles in this case here. So, we're not talking about exact kilograms of dry matter at this point in time, we're just saying, are we in the top 25 per cent of growth with our current feed?
Cam Nicholson:
So, some of these descriptions don't have to be overly complicated if you don't want them to be. They're just those tipping points where we think differently. So, to summarise [inaudible 00:45:27] talk so far, decision-making is a skill, can be practiced, can be taught, and you can become good at it.
Cam Nicholson:
The decision matrix is a useful way to combine those multiple elements, that influence decision making. So, the head, heart gut, the risk, amount of risk that you want to take on, balancing up those different pros and cons and whatever else. And as I said, it makes it transparent for others to follow. It's really useful to actually have some of this stuff written down.
Cam Nicholson:
If people want to know more about some of this sort of stuff, this was a book that was produced as part of the Grain and Graze program. They're only hard copies left, but it is on the Grain and Graze Three website, the Farm Decision Making book. And it talks a bit about the personality, which I didn't touch on. But it does include the risk in decision making.
Cam Nicholson:
And also through a national Landcare program, we're doing a lot of work on developing videos and building a library of these different decision matrices, including a simple little tool that allows you to create those matrices because it prompts you with the right questions. So, there's a fair bit of work going on in this space in the next couple of years, which if people look out for, I think they might find useful. And on that note, Alice, I'll pull up.
Alice Ritchie:
Fantastic. That was a fantastic and insightful presentation. So, thank you very much, Cam. I think a lot of people will be having a go at making their own decision matrices now. So just so you know, we've had a lot of interest today. We've had 268 registrations, and 166 participants online listening. So, it hasn't just been you talking to your screen, I promise.
Alice Ritchie:
And we tend to find that a lot of people listen to the recording. So just a heads up to everyone, you will be getting a link to the recording if you want to re-listen to it or send it to a friend. We've got a little bit of time for questions, so I will read out some questions. If you want to, you can use the hands up function and I'll unmute you. So Lou will have a go at that again.
Alice Ritchie:
If you are asking your question via the hands up function, please provide your full name and what business or organisation you're from. Otherwise, if people would like to, feel free to put in questions in the chat box, and I have got some collated already. So, I'll just start off with one while I'm getting Lou sorted out. Linda Nancarrow asked, experiences alter people's interpretation of risk too. So, after a drought, I might assess cropping success likelihood at 50/50, whereas after a wet year, I may assess it as an 80/20. Do you have any comments on that, Cam?
Cam Nicholson:
Yes. That's exactly right. So, each time we have an experience, it will change our judgment or our position on some of these things. Well, it will give you food for thought to rethink, are they valid or not? And in some cases you won't change things, but I've seen in other cases, people do adjust their position, and they're scoring or weighting based on what their last experience has been. Absolutely.
Cam Nicholson:
And so, sometimes we talk about people being a bit, sort of, gun shy or being bit risk adverse. And quite often that's because of experience I've been through. And I don't want to go through that same experience again. Or I had an awful time with that experience, that burns into your gut, and burns into your heart. And so, even though the facts might be, or the next scenario might be, this is shaping up as being really good quite often that those past experiences will be very influential in curbing what decision you might make.
Alice Ritchie:
Yeah, that, does make sense. I'll just try and get Lou going. So, Lou, I have just unmuted you. Would you like to ask your question?
Lou:
Hi, can you hear me?
Alice Ritchie:
Yes, we can.
Lou:
Hi Cam. I just was wondering, I'm sure we've all met over the years people who seem to struggle to make any decision at all, because they never seem to get past the point of gathering information. And so, they actually become quite paralysed. And then in the end, sometimes, the decision is actually taken out of their hands because events overrun them , or there's an adverse outcome that wasn't what they're aiming for. So, I suppose I'm wondering if your matrix ... if you had experience of your matrix, helping those people, or how could we help them?
Cam Nicholson:
Yeah, great point, Lou. I see a lot of people that get to that point, I'll call it analysis paralysis. They just think they need more and more information. And I did mention that idea about timeliness decision-making, good, timely decisions. I've found once they're forced to actually try and put it in that matrix type context, it helps enormously. It sort of, breaks those shackles and getting them to the decision point, because otherwise, as you said, they'll just get more and more information.
Cam Nicholson:
When you start getting to a point of putting the scores on them, and in particular, when you say to them, I'll read out this scenario for you, and they're all favourable decisions they think you should make it almost seems like it's a no brainer to them. ‘Oh, you'd make this decision.’ And then you do the reverse and say, ‘What if it was all adverse? What decision would you make?’ Well, it's a no brainer, I'd do such and such.
Cam Nicholson:
Once you got those two bookends, I find that it really frees people up to then start to think about what some of those other decisions might be, and gives them a bit of clarity around what that is. So, I found some people that have been in that situation, this helps them immensely.
Alice Ritchie:
Fantastic. So, I will just have a quick look through. Neil Cliff would like to know, are there any circumstances or examples where you might weight scores for particular major considerations, more heavily or more lightly? I'm trying to think of an example of what that might look like.
Cam Nicholson:
Yeah. Because that's exactly what you do.
Alice Ritchie:
Yeah.
Cam Nicholson:
You're weighting each of them because of that school that you put on them, it's hard to lower. And again, as circumstances change, you've had an experience, you think, ‘Gee, I put too much weight on such and such. I, now, I shouldn't put that much weight on it. I don't think that's as influential. This is more important.’ So, you change your weightings.
Alice Ritchie:
So, just because we've had a couple of questions, just with the ... after you've ranked your considerations, how have you gone about getting the scores? So, you just choose something that feels right?
Cam Nicholson:
Yeah. So, a bit of a cheat. When I analyse all the stuff that all the matrices that I've done, it's interesting. There is one extreme decision. Usually your scores are around about that 75 per cent, 80 per cent of the maximum one end of the bookend. And at the other end, it's usually about 50 per cent. It's interesting the way the numbers have fallen out. But, it is a bit suck it and see, and so, and people sometimes get a bit too hung up on what, if I don't get the number right? Well, it doesn't matter to start with just run your scenarios. When you start doing your scenarios saying, ‘Well, what if it was only 50 per cent, and what if I didn't have a market to sell into, but I could get weed control? Will I still do it? Yeah, I probably would.
Cam Nicholson:
Is that the way the scores are falling out, and it's the score matching up with the right decision that I think I should be making. It's almost like scenarios and gaming, sort of, thinking. What decision would I probably make on that basis? Or think back to say to a few people, ‘Have you been through this before?’ ‘Yes, I have.’ Or I fill out the circumstances for that year, what decision does it suggest you would have made, or should have made, and would that have been the right decision in hindsight? So, you can use your past experience quite well in that.
Alice Ritchie:
That's good. So, we've got a couple of questions from Rochelle Mayer and from Neil Polish around specific examples. Have you already done this matrix for planting trees on farm or for buying a new tractor, for example?
Cam Nicholson:
The buying a new tractor is a classic one. Yes, I have. Well, what's interesting is I did this with a farm business one stage, and the wife described what the husband was doing was ‘man maths’. What he was trying to do is justify it through the facts and figures, when in fact all he wanted was the new green tractor. So, that last bit of the latest technology in it. And that was the heart, his preference, he values it, he loves it, sort of stuff. And I said, ‘It doesn't matter, but make sure we're making the call on the basis of because you want that, and you're willing to pay something for it. And don't try and just justify it because you're going to be more fuel efficient, or you're going to be able to cover large areas or whatever it might be. Just put it on the table, and then it's still a legit decision to make.
Cam Nicholson:
Coming back to those specifics. Yeah, I've done ones on buying land, on buying machinery, on leasing land. There's a whole heap of them out there. I'm putting a library together of those at the moment. One thing I'm always a bit wary of, though, is if people use them as, ‘Oh, here's an example, but it may not be right for my circumstance.’ The biggest fear is people just pick them up and going, ‘Oh, I don't like that score. This is no good.’ It's got nothing to do about the score, it's to do about the process, and the discipline that you have to work through it.
Cam Nicholson:
Quite often I'll put some of these up as what I'll call a straw man, and people go, ‘I hate that. I wouldn't include that at all.’ I said, ‘Well, put a pen through it.’ Is there anything else you'd include? You don't like that score; you've put too much weight on this. Good, change it. Change it to whatever score you want. But yeah, the bottom line is I've got lots of examples. And, I just find them really good.
Alice Ritchie:
Yeah, absolutely. So, I suppose linked to that, Lorna Watson has asked, is there a process that you go through once you've determined whether the decision was right or wrong? So, is there an evaluation process that might identify areas or biases in your decision making?
Cam Nicholson:
Yeah, absolutely. And, by having it written, it allows you to go back and do that easily. If it's all in your head, it's very difficult to do that. And secondly, if they're recurring decisions, every time we've made a decision, and this is [inaudible 00:56:37] business, we'll think, do these all still hold? Based on the last experience we've had, do we need to tweak this a bit? Do we need to adjust it? Should we include something else in it?
Cam Nicholson:
And it's, if you like, the discipline. When I started off and I said, this idea about it can be practiced, it can be learned, you can become confident, and you can learn to do it easily, do it as second to nature, yes you can. So, yeah, reflections are a vital part of it. Having it documented allows that reflection to occur far easier than just having it in your head. ‘Yeah, I weighed all those things up. Yeah, yeah, that's what I did.’ You try and reflect on that, I bet you won't give it the same as if you've got it written down on paper.
Alice Ritchie:
Yeah, absolutely. So, we've got probably time for maybe two more questions. We'll see how we go. I've got one from Ian Packer. That's a bit around, I suppose, difficult situations. So, if you had someone who, for example, had poor stock and no soil moisture, but they don't want to sell their livestock. They're convinced that they're not doing it tough. How do you approach someone like that and get them thinking about these sorts of decisions, and having a really logical decision-making process?
Cam Nicholson:
Yeah, it sounds like he's been on the trips too with me up in Queensland. Yeah. Because this is exactly the position we confront. So, when we start off, doing the matrix allows you to think about it a little bit more objectively. And then quite often when we've gone through and worked it through, and we've got the scores out, and people keep looking at it and going, ‘Yeah, logically, that's what I should do,’ but I still don't want to. That's when the heart is overriding the decision.
Cam Nicholson:
Now, I've been breeding these animals for the last 50 years. I'll never be able to buy a stock like that. So, then the conversation goes in a different direction. What it's done, it's actually in a sense, flush out what are the things that we do need to consider and discuss, and open up on. So, it's not a panacea for every solution, but it does allow you to first surface them, and then saying, ‘Yeah, but I still don't want to do that.’ And then we get into why. And, I've had a couple of them where we've actually said we can't source that livestock. I said, well, let's just have a hunt round and see where the possibly we could with similar genetics and all that sort of stuff. And, that's helped in the decision process. So, it won't instantly solve it, but certainly allows you to get further down that path.
Alice Ritchie:
Yeah, absolutely. Question from Graham, do you find that this process works best when there's a new situation, or a new team that needs to work out an agreed decision?
Cam Nicholson:
No, not necessarily. Some of the greatest fun I've had is when you get two or three generations sitting around the table trying to do one on something they've always done. We always do this, we always sow like this, we always do such, we always sell our livestock at this time. We always cut this amount of hay. And so, you do that and you get three generations, and asking those questions of why is that important and why is that more important than something else can apply equally to old situations and habitual stuff you've done compared to something that might be new and challenging.
Alice Ritchie:
So, we've just got a couple more questions. I realise it's just gone past one o'clock. So, if people need to drop off, feel free, there will be the recording sent out. If you want to catch those last questions otherwise Cam, I've just got a comment from Lou Hogan, if you'd like to discuss. We seem to be facing an increasingly uncertain environment. So, markets, climate, other risks. I'm thinking that successful decision making requires a good decision in the first instance, and then the ability to change or pivot if that decision does not turn out to be the right one. Does that sound pretty true?
Cam Nicholson:
Yes. I'm taking that as a statement rather than the question, but Lou is dead right. And that's why I showed two points on our farm at home times when we make those decisions. We've got about six or eight of them all together through the year.
Cam Nicholson:
And, while we might make a decision in May to say, ‘Yeah, I think we've got enough feed in spring,’ there's always a checkpoint six weeks later, just to make sure all of that's on track. And any amount of nitrogen, or gibberellic acid we used, or the Jenny Craig weight loss that those cows have had because they had half a condition score that we could afford to lose, that's all going according to plan. And if something's not right there, we make different decisions again. So, we pivot as a point of that.
Alice Ritchie:
Yeah, absolutely. I've got a question from Kirsty Anderson about a bit more of the admin in the process. How do you find people file or record these forms? Do they have a decision's folder or do they leave them on the computer? Do you share them amongst your management team? What do you find people do?
Cam Nicholson:
All of the above, but it's very ad hoc. So, what we're actually putting together at the moment it's being written for us is what I'm calling a, call it a decision wizard is the working title we've got for I, but it basically allows you to do it on a computer with the prompts to the questions, creates the matrix and the scores and things like that. And allows you to file it in a library. So, you can then build up a library of those, a repository of those. And there will also be a library of other examples associated with it as well.
Cam Nicholson:
So, we're encouraging to try and get a simple way of being able to document that and create those tables, if you like, simply. I do it on Excel at the moment, but this will all be a simple little bit of software, free software that you can use with access to library and other examples, so to speak.
Cam Nicholson:
I should mention, one of the things when I studied a number of farmers that I thought always seemed to make good decisions at the right time, they've got a head full of these. Their heads are like a filing cabinet of these, and they just pull the right ones out at the right time. And they've got a decision to make, I think, yeah, I need to do such and such.
Cam Nicholson:
And they're in their heads rather than documented. And as soon as you get them documented and you can share with others, share with your accountant, with your agronomists, other people in the farming business, it makes it a heap better. But at the moment, the storage of those or the examples of those are pretty ad hoc.
Alice Ritchie:
Yeah. No, that's fair enough, that's what people do. Simon Turpin has a question around with improved seasonal conditions across much of Eastern Australia, decisions are now focusing on restocking. So, variable potentially short term, we'll wait and see. Do you have an example for a restocking scenario?
Cam Nicholson:
Yes. They're mainly Queensland cattle ones. And, I can give examples for people, but I reckon you could think about them yourself.
Alice Ritchie:
Yeah. So-
Cam Nicholson:
[crosstalk 01:03:54] if we get into that side, I could rattle off six conditions straight away, I reckon, but are critical factors that I'd be considering.
Alice Ritchie:
So, one thing that a lot of people have asked, Graham, Mike, Trevor and a few others is, do you have either some existing decision matrix examples, or tables or templates that you used to create them? Because a lot of people would like to get their hands on them.
Cam Nicholson:
Yeah. So, I can give you an old version, which were the process of developing a decision matrix, which I summarised in the ... So, there's a word document with about half a dozen, six or eight examples at the end of it. It's all been updated through this National Livestock Project (NLP) project, so there'll be videos and libraries and stuff like that put together. But I certainly can give you some now, Alice, just if people are mindful that it is a bit dated, and that we're refining that as we go.
Alice Ritchie:
We can attach it to the recording, and just put a big disclaimer on it saying, these are a little bit out of date, but you might find them useful.
Cam Nicholson:
Yeah.
Alice Ritchie:
All right. I think we've got one or two last ones, and then we're pretty much done. Something that relates to something else I've heard you talk about from Tom Reichstein. How do you combat differing personalities when it comes to decision making? I might be optimistic, and the other one's quite opposite.
Cam Nicholson:
Yeah. I would say that the whole webinar around that temperament personality type stuff. I do find though that where temperament and, personality differs is the way people either A, view risk or B, informing their decisions either through the head heart or gut, and the temperament sort of lines up with that. So, certain people of certain temperament rely more on gut feel, rely more on feelings and beliefs to make decisions and facts and figures; other temperamental personalities will like all the facts, and almost to a point where we just do it on the numbers, and we do it on the evidence, and we ignore everything else. We ignore feelings, we ignore all that sort of stuff.
Cam Nicholson:
The matrix allows you to pull some of those differences out and try and find common ground in it. It's far from perfect. I mean, while we have clashes in people wanting to make different decisions because their personalities are different, and different rankings or ratings of what's important. If you want to be more conservative, because your temperament, you're a more risk averse or conservative type person just naturally, your scores might be different to what someone might be who's a little bit more gung-ho or a bit more of a risk taker. But, at least it allows you to start to get something out on the table, and identify where those differences are. Yeah, it is useful from that point of view, it doesn't magically solve them.
Alice Ritchie:
Absolutely. Now, we've got one question, which might even lead to another good climate webinar down the track from John Mosley. Any comments on where to source information regarding seasonal predictions and the risks? So, some predictions have not been good and they've led to bad decisions. For example, early predictions of an autumn break kept slipping with successive updates and then disappeared. We know it happens, we have a lot of resources around this, but what are your thoughts, Cam?
Cam Nicholson:
Yeah, well you can do the next webinar. Yeah. So, and maybe a way of answering this is, I'll go back to that Barry Mudge discussion that I had earlier. When Barry first put his together, he was making a decision at the autumn break, or at the time of sowing about what the seasonal forecast was. And his score that he gave it was, whatever the decile ranking was for the season minus one. So, if it was, they were predicting a decile eight year, he gave it a seven points. If it was a decile two year, he gave it a one-point score.
Cam Nicholson:
He realised over time that he was putting far too much emphasis on that because the skill at that time, in those models weren't anywhere near good enough. So, he's now knocked that back. So, it virtually doesn't ... it's a small part of his considerations, but far less weighting than what it used to have in the past.
Cam Nicholson:
The ones he's cranked up more is the amount of stored soil moisture he's got. So, he uses things like his moisture probes that he's got now as a far more ... and he puts more influence and greater score on the moisture probes than he does on the climate forecast at that time.
Cam Nicholson:
As you get further into the season, and you're starting to talk about application of nitrogen and things like that, and the models get better, he puts more emphasis back on them again. The important thing though, is that there's a point in time when you've got to make these decisions. And that's why you would have seen on some of those matrices, when am I making this call?
Cam Nicholson:
And so, I try not to get distracted by ‘in December, what the models are telling us might be the autumn break’, it's too far away. And I don't have to make a decision anyway, then. So, let's not worry too much about that, let's worry about it a bit more when it gets closer. But, if you don't trust them much, don't put them in your model. Don't put them in your decision matrix, or if you put them in, put them in at a very low relative weighting compared to other things that you've got more confidence in.
Alice Ritchie:
That does make sense. One last one, do you have any suggestions for other resources or reference material around this area that you might be able to recommend?
Cam Nicholson:
Well, I'll put the decision-making book that came out of Grain and Graze. That's a bit of a summary of that sort of stuff, and does pick up on some of that temperament stuff and how that influences decision making. The Daniel Kahneman stuff, as I said, it can be a bit heavy. But there are some good points in that.
Cam Nicholson:
I reckon there's a bit of a gap in what's designed well for agriculture, and that's what we're trying to fill in some of this work we're doing in the next couple of years, getting better resources in that space. So, a bit limited at the moment that I think are good for agriculture. You know, there's some great stuff on ... Annie Duke's got a wonderful book, it's called Thinking In Bets, and it's all about decision making and odds and risk. That's quite a good read. But again, it's generic, it's not necessarily agricultural based.
Alice Ritchie:
No worries. Look, that was absolutely fantastic. Thank you so much, Cam. For, everyone who is still online, we are running, there is a little survey at the very end. So, when you leave the webinar, it will pop up in your internet browser. It's only a couple of questions long, we really appreciate you filling it out.
Alice Ritchie:
For everyone who's left, the next webinar in our series is actually this time next week. So, Thursday, 7th of May, where we will be talking to Leeton Wilkes from Ag-Bite on farm weather stations and what they can do. So, if you've subscribed to the Climate Webinar Series, you will shortly receive some more information and an opportunity to register to do another lunchtime session. Thank you so much everyone. I have really enjoyed this session, and we will get the recording out to you really soon. Thank you.