In part one of this series we shared some of the struggles faced between Bryan and Andrea Kirkpatrick as they began talking about a succession plan for the Greentown, Ind., farm. Here are five more ways to jump start that process.
Don’t wait too long to start planning. Don’t wait until your first heart attack, or when potential successors threaten to quit.
“If you think of recruiting your child for the future farm CEO job, you would talk to them differently,” says Dick Wittman, an Idaho rancher and farm succession planning specialist. Wittman will offer succession planning advice at the upcoming Farm Futures Business Summit. Click here to register.
Farmers avoid transition planning for a host of reasons. It’s too big. “We’ll think about it later, let’s go farm” is how most farmers respond to the challenge. Or it’s too sensitive, so they avoid the subject. There’s fear of failure — lots of bad experiences in previous generations.
“You spend years building a business, but spend not one second thinking about how it will move forward,” Wittman says. “Succession planning isn’t easy, but it can be made doable if you break it into parts.”
Don’t assume you know what others are thinking. Avoid this by gathering input before you start building formalized plans. Convene a meeting of family and key stakeholders and follow through. Build a professional agenda and appoint a transition team or coordinator. If it’s too emotional for someone in the family, engage an off-farm facilitator. Gather feedback and create an action plan with a timetable. Share minutes of the meeting.
Be real about bad chemistry among potential heirs. It’s natural to want to create a career opportunity for all, but how do you know it will work when kids are not compatible?
“Bad chemistry seldom just ‘works out,’ ” Wittman says. “You can see this from an early age. You know there are times when people are cut out to work together, and you know when it would be disastrous to run a business with certain successors working together. Help them understand what it is they differ on and why they should not work together. Don’t set them up to fail.”
Make sure everyone agrees on a farm mission, vision and core values statement. You may need to work through a strategic planning process if you haven’t yet established the farm’s core values. This is also a good time to formally document job descriptions, standard operating procedures and a family employment policy. These have been standard practices for family businesses — outside of ag — for decades.
The Kirkpatricks agreed to share their farm mission statement: “At Kirkpatrick Farms, our mission is to provide the highest-quality inputs and outputs to foster strong, profitable growth that benefits our customers, our employees and our communities. We want the quality of our work to stand out from the rest. We believe this will create a sustainable business environment, so our people, and not just our crops, thrive in the future.”
Develop a written, formal business structure. Warning: The senior generation, having worked the business for decades, may not think this is important — but it is for future leaders. That’s why strategic, not just succession planning is important. The farm should have an organizational chart. The roles on that chart will change as the senior generation moves away from day-to-day management.
“You need to know how your business works today, the likely structure in the future, and how the role of current boss [or] CEO will change during and after transition,” Wittman says. “Do you have a written job description? You can’t delegate what you can’t define.”
Look to your business structure in times of crisis or transition. It’s a way to look at the business and start understanding what you do and who will do your job if you die tomorrow.
Coming in part three: Why do so few farmers have a strategic plan in place?