We recently received an e-mail from a reader who shared his observations on the farm succession process and offered some insights on how to prepare the next generation to lead. Here is an excerpt:
As I work with farm families in my legal practice, I note there is never a problem with the younger generation taking an active role in the physical work of farming. The real problem is getting them to spend the time necessary to understand financial matters, decision making and the value of money. Many young farmers have little aptitude for, and even less interest in, the financial management that farming requires.
Farming is a full-time profession. It requires total commitment and gut-level determination to succeed. I struggle with helping farmers transition the operation to a son or daughter who is neither prepared for the obligations of farming nor committed to learning the requisites of farm management necessary to succeed in production agriculture.
As I travel the country, I hear firsthand about the challenges involved in developing a well-prepared next generation of leaders. Farming is a demanding profession. Farm owners and managers must be equipped to work in a difficult environment. The vocation of farming requires a solid education in all aspects of the operation and the fundamentals of business management. Farmers should be as comfortable with their banker as they are with their seed dealer. They might also need to have the motivational skills of a sports coach and the training abilities of a human resources director.
Each generation involved in the operation has a role to play in its development. The senior generation must model the actions and behaviors they want the next generation of leaders to adopt. They must be open to discussing new ideas and sharing their experiences.
In the succession process, the most vulnerable generation is the middle one. By the time they reach the period between their late 40s and early 60s, most people are well-versed in their vocation and understand how to efficiently complete necessary tasks. They are confident in their abilities and willing to try new things. However, they’re also at the point where retooling might be difficult, and starting over impossible. So it is incumbent on them to grow the operation and make sure it will continue for years to come.
The younger generation might have the most leverage to ensure that the family adopts a succession plan. They also have the best chance of inheriting a stronger future. In
agriculture, as in any other worthwhile venture, success is earned at the intersection of preparation and opportunity. Young people must be willing to serve the current needs of the operation, honor the methods that present them with opportunity and work toward a more promising tomorrow.
As a family begins the succession planning process, it’s critical to talk about all aspects of the transition. Preparing the next generation for leadership is just one component in securing a lasting legacy for an operation. A professional development plan might include education in financial management and establishing a network of professional resources.
Other priorities include enhancing the integrity of the operation. A plan should not unduly burden the farm with owners who are not directly involved and dependent on the operation. Another priority is to ensure each active family member’s financial security. Succession is about making things better and more certain.