Succession Planning Conversation Confusion – Five Trouble Spots for the Farm Family Business
I had the opportunity to participate in the planning of a conference that was held last week in Minneapolis, Minnesota on Farm Business and Estate Planning. It was a great event and I learned a lot from the various presenters. One of the presenters was my friend John Baker from Iowa State University. John is one of the editors of the book Keeping It In the Family: International Perspectives on Succession and Retirement on Family Farms. John has a special expertise in family business dynamics. One of the areas John discussed was what he referred to as conversation confusion. Our conversations about business succession can become confused by a variety of factors: timing, location, role, vocabulary or conflict. For example, timing, when do you hold your meeting as to discuss succession? Do you hold it over Thanksgiving because it is convenient to get all of the children there? If you do, you are operating in “family system” while attempting to discuss issues that are in the “business system.” People will have difficulty shifting gears and it will create confusion. Where are you holding the meeting? Is it around the family dinner table? Is everyone sitting in the same chairs they have sat in their entire life? Are people focused on the task at hand or are some fulfilling “family” roles, such as attending to food and drinks?Succession planning meetings should be in a neutral location, such as the office of an advisor - a place where people can focus on the important issues to be addressed. The timing should be separate from a family holiday or gathering. People should assume their role in the business – not their family role of son, daughter, parent, or in-law. People should use the vocabulary of business, not family. Decisions should be made based upon what is best for the long term viability of the business. If conflict arises, it must be dealt with and not swept aside. Thinking intentionally about these issues and how they are affecting your conversations about succession can vitalize your succession planning. It will allow you to look at the farm family business as a business so that you can make sound business decisions about succession and other matters. If you want to learn more about what you can do to successfully plan for the succession of your farm or ranch please give us a call.