Business & Policy
Who drives to town?
By Top Crop Manager
If you have no succession plan, decide now to begin the process.
For years Dad always drove the truck to town. But now his children are running
the show. So what happens when Dad wants Son or Daughter to run the business
but refuses to give up the driver's seat?
Welcome to succession management. It is a term you may already be familiar
with. And if you are not, it is one you will eventually need to learn.
Simply put, succession management is the transition of the family farm or business
from one generation to the next. As the farming population gets older and closer
to retirement, many questions arise. Who will take over when you leave? Have
you discussed what will happen with your children? Do they know how to manage
the operations on their own? Do they even want to?
"Ideally, you want everyone to enjoy sitting around the table and eating
turkey at Christmas," says Dr. John Fast who is widely recognized as the
Family Business Doctor, as well as author, speaker and guru of family business
matters. "You don't want bad blood between family members."
Succession planning happens on three levels: transfer of assets and shares,
the management of the farm, and passing along the family values or harmony.
It is this third level that can be most difficult. After all, how do you pass
along the family harmony?
"The deepest issues are the transfer of control and power," says
Fast. "Both sides have needs. And those needs must be met so all sides
enjoy mutual benefit. It really affects the entire family and therefore the
process should be transparent from start to finish. Whatever financial deal
is made affects the children taking over the family business, as well as the
kids who aren't active in the family operations. Everyone needs to know what
the plan is; otherwise some members of the family may feel controlled. The stronger
the family, the greater chance of success."
Keeping family peace is important, but so is timing. Families often wait too
long to create a succession plan. Ideally, parents should begin discussions
in their 40s and children should be included in these plans once they reach
their teens. The worst case scenario, according to Fast, is when parents are
in their 60s with no plan, no one to help them, and no successors.
"The sooner there is a well-discussed game plan, the better," says
Fast. "As parents get older, they become more rigid in their thinking and
less able to let go of their control. This affects the next generation's ability
to plan their lives and their futures. This is why it's important that planning
starts early. Sit down with your teenagers and talk about family values, the
family business and what being a part of the family business means."
An important thing to remember when creating a succession plan is to keep your
sense of humour. It can be a fun process where everyone has input. It is a time
to share ideas and dreams. If you normalize the situation, it is much easier
for everyone to understand and embrace the planning process.
And remember, like any plan, you can always change it.
"Some farm kids grew up thinking they were always going to take over the
farm," says Fast. "But they have gone on to different careers. Conversely,
there are a lot of kids who went through university, tried different careers,
and decided by their late 20s that they wanted to be on the farm. It is important
to give everyone permission to change their minds and allow for flexibility."
Taking charge of your future now alleviates the stress of the unknown. By attending
a succession planning workshop as a family, you learn together and stay together,
as a family.
And who knows? When it comes to choosing who drives to town, taking turns might
be a lot of fun. -30-