Imagine this: An aging patriarch is unwilling to leave the helm, despite lingering well past his prime, so his children – now vying for control – backstab, manipulate and self-sabotage in an attempt to take over. What ensues is carnage causing irreparable damage to relationships and legacy, along with unlawfulness and deep dissatisfaction. Dysfunction, poor communication and lack of empathy abound, and ultimately, no one wins.
What I’ve just described is the basic plot to HBO’s wildly successful series “Succession.” The series, which followed the fictional and ultraprivileged Roy family, spent four seasons showing viewers just how messy succession and transition planning can be.
While this might be an extreme example, many of its core themes ring true for some unfortunate dairy families. For example, many hoping to take over the family farm know what it’s like to feel blocked by a parent who is unwilling to have a direct conversation about succession or to have fraught relationships spurred on by unrealistic expectations and unequal sweat equity contributions.
On the flip side, the older generation may be preoccupied with their legacy and livelihood as they grapple with a personal identity that is wrapped up in the farm. All of this is to say, sometimes it does not matter how many articles you read or how many strategies you try, family dynamics can make succession planning a battleground.
If this is true, what then can be done to move forward? “Start with some empathy [for the senior generation]. Try to get perspective on what the real root issue is as to why [they will not discuss succession] and why they’re unwilling to share farm business details,” says FCC Business Adviser Joel Bokenfohr. This begins with separating family and business – a feat often difficult to achieve.
Separating family from farm
“The first very important thing to do is to have [a family business] meeting ... then the family can start to talk about what coming into the business looks like. What sort of qualifications do you have? Do we create a family policy around fairness and equality? If you're not going to participate in the family business as an employee, or as an owner, what does it look like?” These are some of the tactics Trevor MacLean, a partner with MNP’s agriculture team, suggests. “This is not a family conversation about family matters; it is a business conversation. This is about getting the whole family to understand the family business,” he says, noting neither party needs to have the answers; they will come with time.
While it sounds simple, separating family and business matters, especially in farming, can be challenging because it is so often intertwined with a farmer's identity and sense of self. If you have tried this approach and suggestions or attempts at holding a farm business meeting have failed, Bokenfohr and MacLean agree a great next step is formulating a transition plan proposal to present to your parents (or whoever makes up the senior generation on your farm) and demonstrate your leadership. The proposal can take on different forms, but Bokenfohr and MacLean recommend including elements such as a timeline, a plan for farm equity, and numbers such as cost of production estimates and quota values. “[A proposal] is something that shows real genuine initiative. You're saying, ‘I would like to be part of this, and here’s how I believe we can make room for multiple families,’” Bokenfohr explains.
Fairness and tough choices
For some families in the transition process, fairness of the division of assets and conflicts related to hierarchy and ownership stakes among siblings, children and business partners, may be impeding progress.
If this is the case, consider information gathering as a beneficial starting point. For example, try writing down a list of all the members of the family – including proper names – and what each person has been allotted so far, including money, education and gifts, says Maggie Van Camp, a farmer and founder of transition planning initiative Farmers’ Bridge. For the senior generation, she advises, “Think about not only what you're giving the farm members but also what you've given the others to become successful.”
Ultimately a tough decision may need to be made. “It's okay to make a choice. It's the exiting generation’s money, it’s their assets, but they have to be clear; it's not that they don't love their other children because they’re not giving them the farm. Parents want all their children to be successful,” she explains.
Strategies to open up communication
Adequate communication is the single most important factor for a successful farm transition plan, but it can seem like an insurmountable challenge when half of the team is unwilling or reluctant to have meaningful, practical discussions.
To address this, Bokenfohr, MacLean and Van Camp suggest a few strategies:
- “Come at the conversation in a non-threatening way. Don't make [the senior generation] feel that this is their fault,” MacLean says.
- Find your purpose. Having a clear vision of your purpose and identity will help you make difficult decisions about your future and what is best for your needs and goals. “We need to tell the story of ‘why,’” Bokenfohr advises. He argues that communicating the “why” communicates purpose and can help provide closure if decisions do not go the way a given party had hoped.
- Designate times to have transition conversations. Tell people in advance what you want to discuss, and set up a meeting time dedicated to that topic. When you do meet, Van Camp recommends starting conversations with nonconfrontational phrases such as “I’m curious about ...” or “What about ...?” Similarly, Bokenfohr says discussing example scenarios can be helpful in working through communication struggles.
When to walk away
As hard as it may be to reconcile, there are times when succession is not possible. If you are part of the younger generation hoping to take on ownership and farm equity, there will come a time when uncertainty and lack of agreement will seriously impact your ability to support yourself, your family and your retirement plan. Despite the likely heartbreak, knowing when to identify a lost cause can bring you clarity, allowing you to explore your next steps in life.
“[The transition plans] I see that aren’t always solvable are when the conflict becomes too personal, both parties aren't acting in good faith, and no common interest remains or the business can’t support multiple families. That’s when people have to make a choice,” Bokenfohr says. “When it's truly unsolvable, something I’m encouraging more people to do is to have that hard conversation sooner, so families can change their definition of what success in farm transition looks like, bring in a third party, or find a way for everyone to move forward and build their life as they see fit, instead of living in prolonged conflict.”
The younger generation can also take charge and provide a timeline for when they must move on if succession is unlikely. This is again where having a transition proposal is useful. MacLean explains, “You have to go to the other side and say, ‘Listen, here's the time frame and the parameters around which I'm giving you to plan for where I am and my desire to come into the business. If this timeframe and this framework isn't going to work for you, I will have to step away in ‘x’ [amount of] time.’” Equally, he says, it is critical to explain this is not an ultimatum but a necessary step in personal and family planning.
Transition planning is never easy or simple, but some cases are much harder than others. If you are at an impasse, it may be time to evaluate the consequences of continuing with a transition plan so you can make the hard decision sooner rather than later.
However, before you throw in the towel, try finding an adviser or a third-party mediator (or two or three) who can talk through some of the issues you are encountering.
“I've seen it through experience; when family members talk to somebody outside of the family – that has no bias in the outcome – they are going to tell them ... different things that they're not going to reveal to [family members],” MacLean explains. “If there is something going on, whether it's a sibling rivalry, past family dynamics or ‘hidden agendas’ of certain people, that will come out through a very holistic process with an adviser, and then that's how you start to get over some of these challenges,” he says.
