Where to begin?

Starting the Succession Planning Process

By: Kelly Sidoryk

“It is the best of times, it is the worst of times,” was a quote on families working together from the Last Alaskan Frontier tv program. If you have seen this show you will be aware of the trials and tribulations experienced by these families as they homestead in the far north. Most of us who are trying to work together won’t be quite as extreme as the Kilcher families, however there are likely similarities.

In the next ten years much of the farmland is North America is going to change hands. In 2014 the average age of the Canadian farm operator was 54. Many operations are going to go through some type of transition, be it good or bad. But there are some steps we can take to ensure the process falls more towards the “good” side of things.

The most important and perhaps difficult is actually beginning the conversation. This has to happen before we involve accountants, lawyers and financial planners. Having a neutral third party to facilitate and lead the discussion can be extremely helpful.  This type of conversation is not something those of us in agriculture are used to having. It takes practice and guidance.

The process we go through in Holistic Management of setting a shared values based three part goal that includes quality of life, production and long range vision has proved to be an extremely helpful part of the process.

Stephen Covey in 7 Habits of Highly Effective Families says, ““Good families, even great families are off track 90% of the time. The key is they have a sense of destination.”

Dr. John Fast, author of the Family Business Doctor, says the common vision helps unite the family around a goal that is larger than the family; functions to inspire the family during difficult times and motivates family members; provides the family with a set of core principles and guidelines to follow; informs the individual growth and development of the next generation and provides a change model for both individual growth and business development.

Simon Sinek, author of Start With Why, believes that all excellent leaders and organizations begin with “Why you do what you do.” He explains that we must go deeper than the outer circles of how and what we do. This idea adds great depth to the succession planning piece by digging into the why and sharing it with each other. (Could insert Sinek’s golden circle)

There are amazing opportunities and benefits that come with working in a family business but there can also be immense difficulties and challenges.

 “Just because we are related and love each other, does not mean we have to work together.” So let that notion go.

A vital link of developing the common vision is communicating it effectively. Jamyang Khventse recently wrote, “We think we have successful communication with others. In fact, we only have successful miscommunication without being aware of it.”

Effective communication is made up of many things: 

1. Listen – to mindfully listen means to wait patiently for the other person to finish before we speak and keeping our mind focussed on the speaker
2. Practise non-judgement – there are always two sides to the story and neither one of them is necessarily right or wrong, only different perceptions.
3. Show understanding – responding with “I understand or I see what you mean.” At the end of the day we all want to be understood. You can demonstrate you understand someone by relaying their feelings to them in your own words.
4. Put yourself in their shoes – try to imagine yourself in the experience of the other person.
5.  Be totally there – you all know what this means in the age of tech and business.
6. The first response should not be personal – it needs to relate to the speaker.
7.  Let go of the results –not a competition
8. Don’t harm – trying to remain kind and compassionate.

Another important component for those families that are going to continue to work together as part of the transition is asking what the roles and responsibilities are going to be?

How are we going to make decisions? How are we going to monitor how we are doing? What is the level of independence and interdependence that is needed? It is important for the younger generation to have achieved a degree of independence before members can all come together in an interdependent way. But each family will be unique in how they define and answer these questions

In one family the question was – would you like a percentage of the herd or do you want to own your own animals?  The answer was that there needed to be at least some independent ownership. Of course a level of complexity to keep track is added but that was the consensus of the group.

Another family decided on a percentage of the whole operation. Another strategy was to leave the transition/estate plan up to the kids. They brought it back once to the parents and were sent back for further revisions until the final draft was accepted.

One elderly farmer was actually feeling like he had failed as his desire had been to leave one quarter to each kid and he did not quite reach that.

For another family their first objective was to provide each kid with a separate acreage on which to build a house. Once that was achieved and vocalized the balance of allocation was easier as all the kids felt they had been treated “fairly” at the outset.

The communication piece is a critical component to how well a family can navigate through the process. A strong foundation of trust and acceptance is needed to provide the base from which to work.  Effective communication follows, production towards a common goal and then a small amount of control. Many families and organizations are actually upside down with little trust and acceptance thus the need for major control. Plus if there is any type of disruption further up the triangle the whole thing topples over as it is only balancing on a point. 

David Irvine, the leadership navigator, has worked with many families and organizations. He stresses the importance of assessing the family vision

• Do we spend time together as a family?
• Do we talk and listen to each other frequently?
• Do we respect differences and encourage interests outside the family?
• Do we communicate directly and honestly and avoid gossip?
• Can we handle conflict in direct, non-hurtful ways?
• How frequently do we express appreciation for each other and demonstrate that we care?
• Can we have fun together as a family?
• Even when we disagree, is there respect and good will among family members?
• Is the loyalty between next generation couples as strong or stronger than that between parents and children?
• Do we share a common vision?

These questions can be of great help as the first pieces of the puzzle are put together. It is so important to remember development of the transition plan is a process. It will take time, money and a commitment by the family members to navigate through all the steps and mis-steps. And it will evolve as the circumstances change. But the rewards will far outweigh the challenges.

- 30 -