Relay races are about the baton, not the runners. The ultimate goal is to keep the baton moving at a fast and consistent speed throughout the race.
Try viewing your farm business the same way. You want it to be on a steady growth pattern, regardless of who is CEO.
What are the keys to a smooth transition for farm businesses? Successor development, strategic planning and management transitions are all pieces to the puzzle, explains Danny Klinefelter, Texas A&M University agricultural economist and Farm Journal Legacy Project Advisory Team member.
“For your business to succeed and continue successfully beyond you, the management team must learn, adapt and continuously improve at a rate set by the leading edge of the competition,” Klinefelter says.
Checklist For Success. You will face hurdles. Learn from others. Klinefelter shares these best management practices, noting owners must:
- Assess the needs of the business, now and in the future.
- Review the strengths and weaknesses of the CEO and the successor.
- Communicate openly, honestly and in a mature way.
- Create a management development plan.
- Encourage successors to network outside the business and the industry.
- Develop a common vision for the business.
- Delegate responsibility and authority with a specific timeline in place.
- Involve the successor in the business plan and strategic decision-making.
- Implement steps outlining what the CEO is going to do next.
Stay Focused. This process is far from easy. Just ask the Moes of Goodwin, S.D. For six years, brothers Jim and Greg Moes, along with several family members, have worked on their succession plan with plenty of starts and stops along the way.
Some of their delays in decision-making can be attributed to the fact they are running a large and successful operation that includes three separate business entities, 2,000 dairy cows, 2,500 heifers and 3,000 acres. I’m sure you can relate—balancing the urgent and important is difficult.
Luckily, they now have a comprehensive plan in place, and Greg’s sons, Jacob and Scott, and Jim’s son, Matthew, are on target to each own a third of the operation by 2029. Learn more about their journey, keys to a smooth transition and successor-development plans in "Transition Success Tips."
Use time this winter to start or continue sketching out your farm’s succession plan. Share your thoughts with your family, team and advisers. Don’t delay. Remember the Chinese proverb, “The best time to plant a tree was 20 years ago. The second-best time is now.”