The decision to plan is smart business. For a farmer, planning for succession is a clear statement that the long-term success of the family operation is important. The collapse of a family farm due to no succession plan is inexcusable.
Q The various articles I've read and a few of the speakers I've heard on the topic of succession planning always seem to start with a tired line about a lack of communication, families not talking, etc. It makes me want to scream in response, "Talk about what?" We talk constantly; in fact we often discuss succession. My parents dream of retirement, my brother wants to assume control of the operation, and my husband, who works on our family's farm, wonders where he fits in the puzzle. So what else should we be talking about, and where do we go from here?
A Succession fails to happen for numerous reasons. Citing a lack of communication as the cause is an easy culprit, as well as a crutch for much bigger problems.
Rodney Jones of Kansas State University points out there are curves, potholes and other hazards on the road to succession. "In many instances it appears to be a lack of understanding the underlying issues, a failure to communicate and a lack of planning that result in the inability to successfully make the transfer happen," he says.
Please don't misinterpret the intent of this message. Families do talk; they just don't clearly communicate when it comes to hashing out the difficult issues. Taking time to have an in-depth dialogue regarding the future of the operation is rare.
Why we don't talk. Based on my experience, there are two reasons for a lack of communication. First, most family business owners are uncomfortable detailing the roles and responsibilities of those involved. It's easier to assume the natural roles of a parent and child relationship than force a situation in which each person is an equal participant, as in an employer and employee relationship.
Second, as family, we often allow past history and preconceived ideas to cloud issues. John A. Davis and Deepak Malhotra of Harvard Business School suggest family members have "long-standing relationships that are based on strong emotional tiesâ€¦ greater reactivityâ€¦and play certain rolesâ€¦" Because of this, "Family members tend to have difficulty listening to one another without judging what they hear in the context of countless prior experiences."
In any business administration, the details of operational management, human resources and strategic planning are important for succession planning. These guidelines may help:
1.Schedule a specific time to only discuss succession planning.
2.Establish a clear obtainable
objective for each meeting.
3.Prepare a step-by-step agenda.
4.Establish each person's role and expected responsibilities.
5.Decide on a time to follow up.
6.Only include active farm family members and applicable employees.
7.Stick to specific issues-prior feelings don't count.
In the September 2005 article "Begin Succession Planning Now," published on The Samuel Roberts Noble Foundation Web site (www.noble.org), ag economist Fred Schmedt writes: "â€¦it may be more difficult to enable succeeding generations in the business than it was to create the original business. If you truly wish for someone close to you to carry on with your farm or ranch operation, then you need to begin succession planning. Not soon. Now!"
- December 2009