Seven years ago, here’s what I said about starting transition conversations:
- 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.
- Start crunching numbers with your lender to figure out the debt-servicing capacity of both generations. Parents need to build their farm’s 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 members of your community who have transitioned well and copy their success. Share your story with them.
- Use great expertise. Consider a coach or facilitator for the communication process. Doing family meetings yourself is not a good idea for those who are highly conflicted or not great at sharing verbally.
Why don’t they want to talk? Why are they reluctant to share the farm’s financial reality?
Founders can be afraid of failure and losing wealth. They may also be concerned with telling the truth. Perhaps the founders are embarrassed or sad when they see their personal net worth is 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.
Cash flow crunches on farms are getting tougher this season as interest rates rise, land is expensive, and expectations for growth need sound management.
Consider these actions as you make your approach to the transition conversation this year:
- 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 truly want your life to look like on the farm as you step back without stepping away? For successors, what timelines for becoming the manager are in your head?
- Is your ideal day on the farm aligned with your spouse’s vision? When is it the woman in agriculture’s turn to get what she wants? If you and your spouse disagree about travel, moving off the main yard or business growth, you are likely stuck.
- What do you want as you transition? What do you not want? What could you live with? What is the worst that could happen if … ? How can it be prevented? 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 parents are reluctant to talk about transition. Are they afraid of starting a conflict they don’t want to deal with? Are you the one who has discounted their ideas in the past – causing them to continue the “silent treatment”? Many 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 everyone to the table?
- Resistance to change can come from the head, heart, gut or all three. What is the intellectual block of the transition process that is causing you to get stuck? Perhaps you have tried in the past but advisers did not help you understand the emotional factors affecting planning. Many want to avoid feeling 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. Will the ideas discussed be kept confidential? What does that look like? How much trust do you feel as a young farmer 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? What do you want from your parents to strengthen the level of trust in your 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.
