Every farm succession plan starts and stops with the older generation. In most cases, it’s up to mom and/or dad to determine how and when the transition moves forward.
For farm families who are stuck in that process, it’s usually not from a lack of desire to execute, but from paralysis — not knowing where to start or a fear of failing, says farm succession consultant Dick Wittman.
After examining the junior partner’s perspective in episode 27, we’re focusing on the senior side’s objectives, concerns, and questions in episode 28 in the Mind Your Farm Business series.
What do mom and dad want? What needs to happen so they feel good about the transition? How can their concerns be addressed?
While he’s helped many other farm families, Wittman speaks on this topic from a personal perspective, as he recently transitioned from CEO to board chair and transition coach with his family’s 19,000 acre crop, cattle and timber operation in northern Idaho.
He stresses there are specific conversations that need to take place around the transition of management versus ownership, whether the successor’s vision and values for the business are compatible, and the skillsets that the incoming generation will need to have to be successful as managers or investors.
“Oftentimes we gloss over this. It’s just ‘why don’t you come back to the farm and it’ll just work out’ but it doesn’t just work out. What happens is you have a wreck.”
For some families, succession planning should consist of figuring out an exit strategy, he says.
“There seems to be an image in agriculture that all farms should be passed down, and if you don’t pass it down, you’ve failed. I think that’s a huge incorrect belief,” emphasizes Wittman. “There are times where you’ve made it your major investment but your children don’t want to do it. For those people, succession planning should be more of an exit strategy of how to maximize the outcome and help your children accomplish their goals in life.”
After defining family members’ desired outcomes, Wittman stresses the focus should be on transitioning responsibilities, not necessarily on retirement and suddenly disappearing from the farm picture.
“A lot of people have never thought through the idea of life after being the boss,” he says, noting there’s usually an opportunity to serve in more of a mentor or coach role.
Wittman and RealAgriculture’s Shaun Haney get into a serious conversation about succession planning from the senior partner’s perspective, including keys to transparent communication, and some of the common mistakes to avoid — listen here:
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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