MYFB — Ep. 27: The younger partner’s perspective on succession

Many times we look at farm succession from a very holistic point of view, through a lens focused on the overall process and all the people involved.

But this can make things very complicated. Sometimes we need to look at one generation at a time. What are their concerns/desires/needs in this process?

In this Mind Your Farm Business episode, we focus on the younger partner’s perspective in farm success, as Real Agriculture’s Shaun Haney speaks with Carolyn Rodenberg, founder of Virginia-based Alternatives to Conflict,

As they discuss, there are two sides to the succession equation, but both the junior and senior partners have different perspectives, and are looking for different outcomes. One is trying to enter the business, another is trying to leave the business. The position of the junior partner can sometimes be seen as more unique in this situation, as they really bring in that different perspective.

“The junior partner probably worked on the farm while he was a kid, during summers and such, but he (or she) hasn’t been there when the business grew brick by brick. And the senior partner was there, but this junior partner is expected to learn very quickly what the senior partner has taken years to learn. One of the mistakes he or she often makes is that too often, the young person acts like they know it all, when they really don’t,” explains Rodenberg. “They won’t admit that ‘hey, I don’t know all of this’ because they want to please their parents, and so the perspective is a little shadowed by that.”

She points out another common problem: farm employees remember the junior partner as a kid, and they can’t always shake that image.

The difficult part with being a junior partner, is whether there really is a right – or wrong- time to start the conversation about succession planning.

“If you start hearing that senior partner even say the word ‘retire’ or ‘slow down’, you should be starting the conversation. The danger sometimes is that the young partner will sometimes think ‘here’s my chance!’ and they will jump in the deep water, and they are pushing too hard, and that causes again for Dad – or whoever it is – to start pulling back,” notes Rodenberg. “If this young person has finished college, or in my opinion, a very essential part is that they’ve worked elsewhere for 2 or 3 years, that’s a good time to say ‘hey Dad, I’m really interested in coming back to the business, and being a partner. Can we talk about it?’ I would certainly encourage to have that life experience on another entity and certainly going to college and finishing college.”

Shaun points out many young people come back to the farm and approach that conversation from the wrong angle, stalling the process, and making it difficult bring it up again for not just years, but sometimes decades.

Rodenberg agrees, adding “we’ve got to remove it from the family framework, into the business framework. And it’s hard for both parties — hard for Dad to let go, and it’s hard for that next generation to grab hold. And unless there is a specific process I can almost guarantee you some form of conflict will occur. And sometimes, it never gets resolved.”

In order to implement that “business framework”, Rodenberg says you need that senior party to announce the successor as soon as possible, even if the transition may not happen for 10 years, so everyone knows what to expect.

“You set what I call a ‘when and where’. You set a specific time to talk about this issue. And I’m not talking about a family thanksgiving dinner. I’m not talking about in the family home around the breakfast or dinner table, where it’s framing it as a family issue. I’m talking about offsite, and you set a time and a place. And you say ‘this is what we are going to talk about’. And then you sit down, and have this meeting, which shouldn’t last more than one or two hours for the first one,” explains Rodenberg. “There’s probably going to be another meeting, but the process takes time. Sit down and start talking about expectations – on both ends.”

Check out this new MYFB episode on working through family farm succession and the importance of keeping an open perspective for both sides of the succession:

Listen to more Mind Your Farm Business episodes here (or subscribe on iTunes!)

Disclaimer: Royal Bank of Canada and its subsidiaries are not responsible for the information provided in this podcast, and this information does not necessarily reflect the views of Royal Bank of Canada or any of its subsidiaries. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by Royal Bank of Canada or any of its subsidiaries.

 
 

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