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Generational differences tell the tales of farm businesses.

David Kohl, Contributing Writer, Corn+Soybean Digest

February 23, 2021

3 Min Read
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Many of you have participated in one or more of my presentations on business IQ at either an in-person event or on a webcast. Recently, a viewer asked if there was any noticeable difference in business IQ scores by generation. While no formal study has been conducted, my general observations would indicate that there is a difference. The next question is at what age is the older and younger generational divide? Let's assume 45 years of age as a general rule when considering the older versus the younger generation. While the business IQ scores can be high or low in any age group, the following is an analysis based on my casual observations.

Generally speaking, 25 percent of the older demographic would register a score above 35. About 50 percent would fall in the middle with a score from 28 to 35. The other quarter of the senior generation would score less than 28. It is not that this age group is less progressive from a business management standpoint, but the focus and necessity for prioritization of business aspects may wane as they age. In some cases, higher equity and less debt may result in less focus on the business attributes. Others in the older generation have been successful with a singular focus on production and yields to be ahead of the curve and maintain profits.

Related:How to move your farm business forward

Moving to the younger generation, the pressure to service debt and grow the business usually results in a higher percentage of this group with strong business IQ scores. Others have seen bottom line results improved by following a marketing plan and knowing their cost of production and breakeven points. Some in the junior generation have found that modesty in the family living budget allows for faster growth in the business. Still others find that developing a cash flow with financial scenario testing and preset goals allows for focus and communication as they work with their team of advisors or agricultural lender.

However, as I mentioned earlier, there are exceptions to every age demographic. One member of the senior generation indicated that he maintains a positive management mindset by engaging with the younger generation. In this instance, his business IQ was above 40 as a result of collaborating with his daughter, who is a manager and encouraged using an advisory team.

At the opposite end of the spectrum, a young man who was approximately 30 years old did not want anything to do with the business side of the farm. His score was in the low 20s and he had inherited the farm from his grandparents. Only time will tell whether he will preserve this newfound wealth.

Related:Learn crisis management for your farm business

While age is not a determining factor in the result of the business IQ assessment, generational differences may affect how business owners and managers perceive and use the results.
 

Source: Dr. David Kohlwhich is solely responsible for the information provided and is wholly owned by the source. Informa Business Media and all its subsidiaries are not responsible for any of the content contained in this information asset. 

About the Author(s)

David Kohl

Contributing Writer, Corn+Soybean Digest

Dr. Dave Kohl is an academic Hall of Famer in the College of Agriculture at Virginia Tech, Blacksburg, Va. Dr. Kohl has keen insight into the agriculture industry gained through extensive travel, research, and involvement in ag businesses. He has traveled over 10 million miles; conducted more than 7,000 presentations; and published more than 2,500 articles in his career. Dr. Kohl’s wisdom and engagement with all levels of the industry provide a unique perspective into future trends.

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