Founders typically want to know where their income streams will be after they let go of power and control of management and/or ownership. They also have marital conflict about home residence issues, and how to be fair to non-business heirs.
The next generation can’t wait to gain equity, quota, and more decision-making power. Young farmers are smart, tech savvy, and want to have their opinions heard by parents and respected. They also need certainty that timelines for transfer and succession agreements will be honoured. Add the conflict dynamics of a new spouse and you have many interesting conversations ahead!
Last November at the World Holstein Symposium in Toronto, I spoke about the three key things needed on dairy teams for great farm ownership transfers:
Commitment to act.
- Clarity: As the new year dawns I encourage you to converse in a sit-down business meeting with all the generations on your dairy farm. Be clear with each about the vision for growth, the expectations of roles for each worker. You might like to start out with, “I am just curious what your vision of our farm looks like. I need to… and I want…” If the tension is too tight, hire a coach or facilitator to walk you through conflict resolution. We all perform better when we are clear about what is expected of us.
- Certainty: People are jazzed and business is profitable when everyone on the team gets things done in a timely fashion, and folks are certain of the deadlines or timelines for action. Most next-generation farmers are extremely frustrated because they are stuck in what William Bridges calls the “neutral zone.” Put your farm transition plan in drive, a forward gear and get unstuck. The best way to do this is to talk about the conflicting needs and wants that need to be reconciled and build your team of advisers to help you map out where the dairy farm is going, and when. What is the date that you plan to give equity shares to your son or daughter who work with you? When will the next generation be the main manager?
- Commitment to act: I am wearing a red bracelet that says “my commitment” as a reminder to act on business goals. What are you using to be a catalyst for those courageous conversations you need to put new management and ownership agreements in place? Are you stalling out because of fear about fairness to the “non-dairy heirs?
Non-business heirs… that is the status of your adult children who are not on your farm team as workers and future owners. Book an appointment with your financial planner and accountant to find ways to create cash flow for building your personal wealth bubble. You need options to take care of your income streams first, your lifestyle plan as you age, and then your estate plan. Face your fears about fairness, and get plans in place!
A Chinese proverb says, “Talk does not cook rice.” Talking is a great place to start. Be a good listener with a learner mindset, not a judgment mindset. Make 2013 a really great year by talking, committing and then acting to get the “tough things” done right on your farm.
The next generation is counting on you to get things done so that the legacy of your farm can be a blessing to future family units.
If you would like a copy of my presentation at the World Holstein Symposium, send an email to [email protected] and put Next Gen Dairy Success in the subject line.
Remember, it is your farm, your family and your choice. Choose to act wisely in this new year of opportunity and adventure in agriculture. †