Planning for tomorrow is no easy task. But it’s nearly impossible for a large-scale, family-owned farm operation with 30-plus landlords, multiple employees, and a host of business and family relationships to nurture.
So it’s easy to put off — until something big happens. The Kirkpatrick farm near Greentown, Ind., is a case in point.
“We’ve been doing succession planning now for the last 10 years, but the first seven of those years were awkward,” says Andrea Lantz, one of Bryan and Susan Kirkpatrick’s three daughters, all of whom are grown and have careers off the farm.
Bryan’s father had died without any plan, and Bryan didn’t want to make the same mistake. But it was hard to open up to his family. And it was really easy to put off.
“I had to get over the feeling of being in this only for myself,” says Bryan, who went on to write the book, “Faith of a Farmer: God, Family and Life in America’s Heartland.” The farm produces a 50-50 split between commodity and specialty crops.
It was only after Andrea began working at Farm Credit that her dad started opening up about the future.
“He has trained all of us to take over, but now he’s trained us on the things that we didn’t know about, like what roles my dad played on the farm,” says Andrea, who is “heir apparent” when Bryan steps away from the business.
Getting over yourself is one of the toughest barriers to talking about the future.
“I’m just as stubborn and strong-willed as he is, so I forced him to have these conversations,” she says. “There was a lot of crying, but we ended up working it out.
“Relationships are hard work,” she adds. “I forced him and he forced me to break down those walls of communication. If you work hard enough, you’ll get there.”
Dick Wittman, an Idaho rancher and transition planning consultant, says it’s not enough to just say, “We need to communicate.” You have get into your business and understand what issues you need to communicate about. It’s often oversimplified. What are some common pitfalls?
Write it down. “Identify what to communicate about and when things will happen,” he says. Key areas to talk about include ownership vs. management transition; how the business runs today vs. in the future; and a farm’s vision, core values and mission statement.
In these discussions, both parties must decide if the heirs will be owner-managers or non-owner-managers.
“Farms need a documented description of their current and future management system and governance process,” says Wittman, who will be sharing succession planning ideas at the upcoming Farm Futures Business Summit. “That means a written plan, job duties, set policies and SOPs, and how the plan is implemented. You need to be able to measure performance and adjust accordingly.”
Have the critical conversations. Call a family meeting, raise the right questions, and make sure everyone participates and takes notes. “You’ll be amazed at the responses to this process,” Wittman says. (For more on this topic, see Tim Schaefer’s Executive Matters blog.)
Succession planning is not an independent science. It’s just one of many critical issues on the farm. It’s separate from a short-term operating plan, which is “what we do” every day. The strategic plan, or “how we do it,” influences the short-term plan. Transition planning is a strategic issue that needs to be on the discussion plate over the life of the business — not when a tragic incident occurs, such as an illness or family fight.
“Once you think you’ve got it figured out, another tough question or idea comes up that makes us all re-evaluate,” Andrea says.