Ready or Not for Succession

December 13, 2009 02:21 PM

A succession plan is more than 75 pages of diagrams, action plans and explanations. It's fulfilling dreams and aspirations. It's developing business goals and learning to lead. It ensures a family's financial security and the operation's capital resources. Planning for succession is a big step toward multigenerational success.

But how is it done, and where do you start? The most important aspect of the planning process is an environment favorable for succession. That includes a family who is willing, engaged, flexible and informed.

The succession planning process can take months and sometimes years. In some cases, it's simple financial planning and proper legal documentation. Other times, it entails behavior modification and changing roles, reams of legal work and sophisticated funding strategies. The planning process follows a defined set of guidelines, but the solutions vary since each family is unique.

Take a few moments to grade your situation by answering the questions below. Each of the four topics plays a critical role in the achievement of your goals. "Succession Matters” speaks to a sincere commitment to multigenerational success.

"Operation Matters” points to organizational preparedness. Do active family members and employees act like a team; do they share a dream of something bigger and better?

"Family Matters” points to the difference between active and inactive family members. Dividing the farm equally among active and inactive family members can become a wedge of discontent between siblings. Concerns for the family's financial security are the motivation for a successful farm operation.

There is a growing pool of succession planning resources on our Web site at Also, the "Leave a Legacy” blog at can serve as an open forum for dialogue questions, concerns and uncommon issues.

The November issue of Farm Journal includes the Legacy Project survey. Please take a few moments to answer the questions and submit your responses. The survey is also available at By answering the questions, you'll help us help you address the perplexing issues of succession planning.

Soon we'll announce the families participating in the Legacy Project documentary series. This is the perfect opportunity to observe as other families go through the planning process.

Finally, e-mail me with your questions, comments or concerns. Logistically, I can't answer everyone personally, but I can combine common questions and address widespread concerns in this column.

Together we can write the story that celebrates your past, commands the present and creates a future. 

Are You Ready for Succession?
For each positive statement, give yourself one point.

Succession Matters
It is important to:
____ Maintain family ownership
____ Prevent subdivision and maintain operational integrity
____ Transition ownership with minimal distraction
____ Retire without draining business capital
____ Improve management capabilities across the operation

Operation Matters
Our succession preparedness includes:
____ A plan for growth and development
____ Viable business operation
____ Standardized operations
____ Informed, loyal employees
____ Capable unrelated management successors

Family Matters
The family is ready because:
____ We openly share cares and concerns
____ Active family members contribute to operational success
____ Inactive family members are independent and financially secure
____ Active family members possess a variety of complementary capabilities
____ Disagreements are handled in a mature, rational manner

Owner Matters
The owner:
____ Engages in other interests away from the operation
____ Has other aspirations for personal/vocational growth
____ Can teach and mentor successors
____ Will take advice and follow a course of action
____ Can tolerate mistakes and allow for practical learning

______ Total 

Score of 10 or higher: The environment is good for succession.
7 to 9: There is some work to do, but its not an impossible task.
3 to 6: It may take a concerted effort by all active family members to prepare for the process.
0 to 2: Problems exist well beyond succession planning.


Kevin Spafford is a certified financial planner whose firm guides farmers and agribusiness owners through the succession planning
process. He is the author of Legacy by Design: Succession Planning for Agribusiness Owners. To pose questions and comments, contact Legacy by Design, 2550 Lakewest Drive,
Suite 10, Chico, CA 95928, (877) 523-7411

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