Decision making is one of the most critical parts of any business operation. Often, the big or higher risk decisions are made by those in the most senior positions — the ones that have been around the longest.
In a farm operation that is planning for or in the process of succession, determining who makes what decisions can be a tricky scenario. What do we know about how the older generation decides to let go of the reins a bit and pass down the responsibility to the next or younger generations?
Justin Funk of Agri Studies says it depends on what the decision is, as lower-risk decisions are usually transferred earlier in a person’s career in the process of succession. Many see the level of risk in the decision increase and added responsibility added as time goes on.
“I don’t think it’s so much a particular age, or after a particular amount of years, I just think it’s when there’s enough trust in that person that they are going to make a good decision. It could be after a year — it could be after 10 years,” he says of when decision making responsibilities are passed down.
In some of the work that Funk has done through Agri Studies, he’s talked to farmers who are in their 50s and are frustrated because they still feel as though they haven’t earned that right to make the critical decisions, and haven’t been given that right.
On the other side of the coin, there are some farmers in the succession process that are very ready to retire, and the younger generation isn’t necessarily taking the initiative they should be. How do you encourage the younger generation to start taking charge and making decisions?
Funk, who is the managing partner of a family business himself, says what worked well in their situation was having him look at some decisions that he could both succeed at — or just as easily, fail at — early on in his career.
“I think sometimes it’s just a matter of cutting the strings and just letting people go,” he says. “I think a lot of it comes back to family dynamic, which is something that is hard to measure. We have looked at conflict and conflict management in some of our previous studies, and it exists. And we find that the farms with the least amount of perceived conflict are the ones that have the least amount of trouble letting go.”