Seven years ago, here’s what I said about getting transition conversations started:
- Show up as adults to attack the issues, do not attack the person who is delivering ideas for change.
- Understand transition is a journey of many plans, with communication as the foundation.
- Spend some quiet time with yourself thinking about what you truly want and when. What is your business plan and vision for the farm, and for your family?
- Engage your spouse/or partner to see what they want. If your visions are not aligned, you are stuck.
- Work on improving your ability to express emotions and your true feelings to be able to create solutions. The conversations ahead are going to be emotionally laden, and you need to put yourself in the other person’s shoes to be able to resolve conflicts and tension.
- Know you are not alone; thousands of farm families are also on this journey. If you want to shorten your learning curve sign up for our membership.
- Start crunching numbers with your lender to figure out the debt servicing capacity of both generations. Parents need to build their farm financial liquidity, address income streams for living, and what is expected to come from the farm business.
- Build your circle of emotional support and transition success. Reach out to folks in your community who have transitioned well and copy their success. Share stories with them.
- Use great expertise. Consider a coach or facilitator for the communication process. Conducting family meetings yourself is not a good idea for folks who are highly conflicted or not great at sharing verbally.
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Why don’t folks want to talk?
Why are dad and mom reluctant to share the financial reality of the farm?
Founders are afraid of failure and losing wealth. They may also be concerned about telling the truth. I just met a 63-year-old who took on way more land debt and will be mortgage-free at 83. Cash flow crunches on farms are getting tougher this season as interest rates rise, land is expensive, and expectations for growth need sound management.
Perhaps the founders are embarrassed or sad when they see their personal net worth lower than expected at age 65. Being financially pressed takes creative solutions from all generations involved in the farm and it is high time you started sharing the cash flows, working capital, debt ratios and personal living expenses of everyone in the room.
Consider these actions as you make your approach to the transition conversation in 2024.
- List your personal motivation for transitioning the farm. What’s the most important thing for you to talk about with the other generation? What is keeping you up at night?
- What do you want your life to look like on the farm as you step back without stepping away — and for successors, what timelines are in your head for becoming the manager?
- Is your ideal day on the farm aligned with the same vision as your spouse? Or not? When is it the woman in agriculture’s turn to get what she wants? If you and your spouse are disagreeing about travel, moving off the main yard, or business growth, then you are likely stuck.
- What do you want as you transition, and what do you not want? What could you live with? What is the worst that could happen if…? How can I prevent it from going wrong? What can be done to minimize the impact if it does go wrong? These types of “what if” questions could be written on index cards as a conversation starter with yourself, your partner and your successors.
- Be curious about why your folks may be reluctant to talk about transition. Are they afraid of opening a box of conflict they don’t want to deal with? Are you the one who has discounted their ideas in the past, so since they feel their ideas have been shot down, they’ll just continue the “silent treatment?” Many folks tell me they are anxious and overwhelmed about the future. Talking to create solutions is a great idea, but who is going to be the driver in your family to get folks to the table?
- Resistance to change can come from the head, heart, or gut, or all three. What is the intellectual block of not understanding the transition process that is keeping folks stuck? Perhaps you have tried in the past, but advisors did not help you understand the emotional factors affecting planning. Folks like to say “I get it!” and don’t like to feel stupid when being told what to do with estate freezes, shareholder agreements or capital gains provisions.
- Sharing your true feelings and asking the other person what they need in the transition process will help you overcome the “heart” resistance to change. Do you have the capacity to tell your family what feels good in the decision-making process and what does not?
- Trust is a huge barrier to getting folks to the table to talk. Will the ideas discussed be kept confidential? What does that mean or look like? How much do you as a young farmer feel trusted to take over the operation? What fears do you have of taking over control? How much of the management do you want to share, and is there goodwill here? What do you want from your parents to strengthen the level of trust in this family?
Farmers want their hard work to be appreciated and they want to be respected and heard. Identify the weaknesses in your current approach and consider writing your thoughts in a letter.
In the next column we’ll unpack ways to put the power of perspective to work for all generations in transition.
