Coach, mentor and prepare the next generation of farm leaders
For your farm business to grow into the future, it will need a smart leader at the helm. It’s never too soon to start grooming your successor. Future CEOs will need to focus even more on strategic planning and good business practices, says Danny Klinefelter, professor and Extension economist at Texas A&M University.
“Successors need the opportunity to learn from the accumulated wisdom and experience of their peers and predecessors,” Klinefelter says.
Transferring assets can be one of the easiest parts of a succession plan. Passing on management and business acumen is more challenging.
Transition Paperwork. Take the time to document your mission, vision and core values, advises Dick Wittman, a family business consultant. Look at your successor’s expected duties and traits.
“When I work with family businesses, one of the first measures of family compatibility we assess is alignment in core values,” says Wittman, also an Idaho farmer. “People who work together should share the same value set and commitment to a professionally managed business culture. You will chase a successor away when you don’t address chemistry issues up front.”
Written documents that explain the direction and strategic focus of your operation can also help your successor decide if he or she fits into the plan. Members of the next generation must determine whether farming is their passion and whether their spouse supports the lifestyle.
It’s a good idea for successors to work off the farm before becoming full-time members of the operation, Klinefelter and Wittman say. “Your successor can make his or her early mistakes in learning on somebody else’s nickel,” Klinefelter says. “A lot of families have a three- to five-year time frame where the successor is supposed to work somewhere else.”
Don’t wait “until your first heart attack” to begin the transition process, Wittman says. Start early in life treating your children as potential peers—future investors and managers or employees.
Best Practices for Successful Management Transitions
The people who lead your operation in the future must be able to learn, adapt and continuously improve, says Danny Klinefelter, professor and Extension economist at Texas A&M University. He suggests farm families take these steps to ensure a smooth transfer of responsibilities.
1. Assess what the business needs now and in the future.
2. Evaluate the strengths and weaknesses of the current CEO.
3. Review the strengths and weaknesses of the successor.
4. Practice open, honest and mature communication.
5. Create a management development plan.
6. Expose your successor to networking outside of the industry.
7. Develop a common vision for the business.
8. Delegate responsibility and authority according to a specific timeline.
9. Involve your successor in the development of the business plan and in the strategic decision-making process.
10. Implement a plan that outlines what the current CEO will do next.