Over the last two decades, I’ve focused my career on a mixture of business consulting and starting and running a winery and vineyard. Along the way, I was fortunate to be part of one of the leading consulting firms in the world, McKinsey and Co.
I only spent a brief amount of time at McKinsey, but even so, it changed the way I think. And although there are a few bad seeds in every organization, the people there generally lived up to their reputation of being wildly smart, honest, humble and hard-working, each with interesting backgrounds and skills they applied tirelessly to helping solve clients’ problems. (To be clear, I often wondered how I’d gotten through the gates.)
Spend enough time with business leaders, and you’re likely to hear the phrase “highest and best use” thrown around, often with hushed seriousness, like the phrase itself carries some obligation to operate at peak performance. I was recently reminded of this when interviewing a successful winery owner, Ted Hall of Long Meadow Ranch.
Hall is a guy with serious street cred when it comes to creating and maintaining a successful wine business. But before he was a grape farmer he was at McKinsey and Co. Later, as the only nonfamily chairman of the Robert Mondavi Corp., he helped usher in one of the biggest wine deals: the sale of Mondavi to Constellation in 2004 for the enormous sum of $1.3 billion.
“Most people don’t know Mondavi was already a public company [since 1994] before we sold it to Constellation,” he reminded me during our discussion, adding that Robert Mondavi had made his move from a family entity to a public corporation before Hall’s involvement. It seemed like an odd thing to highlight, as Hall’s business acumen and skill are often cited for bringing what was a massive valuation for Mondavi Corp. and ushering in a new era for the sale of wineries and wine brands. But his humility was familiar to me because of my experience with other people at McKinsey.
We were talking about his view of where Napa Valley and Wine Country, in general, is heading. We talked about all the touchstone issues: labor, water, traffic, tourism, organic farming and the value of agricultural preservation efforts, which he’s been a big part of over the years. The concept of highest and best use was sure to come up—and it did, when we started talking about the future of the valley.
“What do you think the future holds for Napa Valley?” I asked as the interview neared its end.
“Depends, but this special piece of earth should be used at its highest and best use,” he replied.
The familiar phrase stuck in my head. I paused, trying to work out exactly what the variables were for the “highest and best use.” Was the highest use one of economics, primarily? And what exactly did “best” mean anyway?
Seeming to sense my confusion, he added, “I think we need a certain diversity of crops. Similar to what we’re doing with some of our own land, growing vegetables and raising cattle to help supply our Farmstead restaurant in St. Helena. Some of this land is better suited for such uses.”
I listened, but I was still stuck. The week before, a lawyer friend had told me he was considering growing marijuana on his vineyard land. I was skeptical (and, honestly, a little concerned), hating to think that winegrapes might someday be replaced by something so foreign. When he told me that he could make up to $3 million per year on his land instead of the $60,000 from the grapes he currently grew, I was shocked.
“Could you ever imagine some of the valley land being used for the cultivation of marijuana?” I asked Hall.
He paused and gave me a strange look, equal parts consternation and resolve. “That wouldn’t be the highest and best use of the land,” he answered flatly.
“Why not?” I asked. “It might be a very lucrative crop.”
“Perhaps, but it could undermine the cultural fabric of this place,” he said.
Cultural fabric as one of the variables of highest and best use? I can see that. But mostly, I thought, “Now that seems like a serious rabbit hole.”
The hour was over and we left it at that, but I walked away with the nagging question regarding the nature of a commonplace business phrase and its implications. I’m still trying to work this one out. Until I do, I’ll continue to aspire to the highest and best use in every aspect of my time and resources.
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