The other day, I conducted a webcast for Moody's Analytics that had over one thousand participants! It is amazing how one can reach out through technology to an audience that has an interest in the future of agriculture. One question Doug Johnson, Director of Sales at Moody’s Analytics, asked was, “What advice would you give to a high school or college graduate considering coming back to the family operation?”
One piece of advice that I have suggested for many years is for new graduates to work away from the business for a couple of years, if possible. Working away from the family business provides exposure to new ideas and concepts as well as time to develop the responsibility to answer to others who are not family members.
Next, what is your skill base and how does it fit with others already involved in the business? Today, success in business requires complementary skill sets, backgrounds, and experiences. Will those skills be allowed to flourish, or will they be suppressed by the existing culture?
Another important point is to assess the financial position of the business. Is the business making money, generating positive cash flow, and building earned net worth? Conduct a three- to five-year trend analysis but be careful of using Schedule F income statements. An accrual adjusted income statement provides a more accurate portrayal of business profitability.
Another important component is that all family members need to participate in a goal setting session. One- and five-year goals set by each individual can provide a pathway for the future and uncover commonalities and differences.
Finally, detailing a good old-fashioned job description can be very beneficial for guidance during entry into the business. Job responsibilities, accountability, and who the new employee is going to report to all need to be outlined. Spelling out compensation and the value of fringe benefit packages can be very useful in preventing communication issues.
This list of advice for the next generation returning to the family business could go on with many other points. Each situation is unique, but the aforementioned items are a good place to start the transition. In the next five years, transition management with the youthful generation will accelerate as baby boomer farmers are moving into the later stages of life.
The opinions of Dr. David Kohl are not necessarily those of Corn and Soybean Digest or Farm Progress.
The source 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.