Ottawa-based lawyer Denis Sicotte presents an interesting concept: He calls it “shades of control,” meaning there are four different types of control that need to transfer:
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Operational control: the operation’s daily decision-making not being restricted to just the founder’s decision but also allowing more and more input from the successor (e.g., daily planning, crop planning and livestock care)
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Management control: These are the high-level decisions to supervise the operational elements – how normal business processes are executed, income, costs and measuring return on investment.
For many farmers who don’t like to be transparent about finances, this is a hard thing to share.
The farm teams that communicate and manage well typically have an open-book policy for the entire team to analyze cash flows, balance sheets and debt servicing.
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Ownership control: This includes corporate governance, strategic targets and business priorities. Founders (parents) may want to own land to rent for income as they age.
The next generation, typically approaching age 40, wants to know how they can get ownership of assets to build equity.
- Legal control: to regulate via agreements (Agreements for farm businesses come in many forms – land leases, marriage contracts, shareholder agreements, buy/sell agreements.)
When you look at the different shades of control, ask yourself:
- Why am I afraid to release control?
- Is owning this farm part of my identity? Who am I if I no longer control my farm?
- What would letting go of control actually feel like? Would it feel like freedom?
Sicotte relays some UK research about farm succession that points out three key factors:
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Father’s age. If you are 62, there’s a good chance your successor is halfway to 40.
Sicotte recommends that by 60, you have transferred many pieces of control so that you have the next five to 10 years to continue to mentor and share your wisdom for management.
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Perception of the successor’s ability to do well as a manager. Perception is people’s reality.
Do you trust your farming daughter or son to be a good manager? Do you have a learning plan for this to happen?
- What value do you as a father or mother place on staying in control?
Make the transfer of the different shades of control a topic of discussion for your succession planning. Catch your next generation doing things right and build on the skills they already exhibit.
Here are Sicotte’s tips for helping to change the control on your farm:
- Begin the transfer of responsibility and control of particular items at the earliest opportunity (e.g., place your successor in charge of the silage operation).
- Explain, and not dictate, your management decisions and policies.
- Encourage young farmers to develop any particular interests and aptitudes they have – but not to the exclusion of other aspects of the business (e.g., internet research for planning and capital purchases).
- Embrace their ideas along with cash flows, budgets and business plans to discuss with you.
- Increase their responsibilities as their abilities develop to focus on sections of work or specific enterprises (e.g., custom haying business).
- Use clear job descriptions and responsibilities and don’t interfere unnecessarily. (Do not micromanage; it drives the next generation crazy.)
- Let the successors have their own enterprise (accounts, bills, etc.) within the farm business.
- Insist on physical records and costing for any enterprises for which they are responsible.
- Develop relationships together with your advisers, lenders, marketers so that they learn negotiation and sales skills with you.
- Give responsibility, assess and give more. Only with responsibility does more control arise.
- Give ongoing feedback. Let others on the team know how well they are performing. Say “I really liked this … next time I would change this … and I really think this … is working.”
John Baker of Iowa State University has a great tool for talking about who makes the ultimate decisions on certain tasks. The tool can be downloaded with the farm family tool kit from my website Elaine Froese. To get started, use the list on page 13 to determine who controls what on your farm.
As you can see, there are many areas where control can be held around the farm, which can lead to many possible control issues. I hope you will stop to consider the “why” behind the decisions that are made, especially if you feel someone on your farm team has control issues.
Determine what shade of control your team needs to address, but also remember to catch people doing things right to affirm and encourage the heart of your team.
Shared decision-making is a great goal, especially if, as the founder, you are seeking more freedom from making decisions and want a great decision-making legacy to be transferred to the next generation. 
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Elaine Froese
- CSP, CAFA, CHCoach
- Boissevain, Manitoba
- Email Elaine Froese
Who holds the control?
John Baker of Iowa State University developed this list of decisions made on the farm. Take a moment to fill in the blank who has control of each of these areas on your farm.
Better yet, make copies for each of your farm team members to fill out and then compare answers.
____________________
Plan day-to-day work.
____________________
Make annual crop and livestock plans.
____________________
Decide the mix and type of enterprise in the long run.
____________________
Decide the level of inputs to use.
____________________
Decide the timing of operations.
____________________
Decide when to sell crops or livestock.
____________________
Negotiate sales of crops or livestock.
____________________
Decide when to pay bills.
____________________
Decide type and make of machinery and equipment.
____________________
Negotiate purchase of machinery and equipment.
____________________
Decide when to hire more help.
____________________
Recruit and select employees.
____________________
Decide amount and quality of work.
__________________
Supervise employees.
____________________
Decide work methods or the way jobs are done.
____________________
Decide and plan capital projects.
____________________
Identify sources and negotiate loans and financing.
___________________
Livestock management.
____________________
Keeping farm records.
