subject: Farm Success In The 21st Century Takes Superior Management Skills [print this page] Successful farmers know that management means more than crop rotation strategies, machinery maintenance timetables, and setting up the work schedules. It means managing strategically for the long term while watching out for the rocks in the middle of the road today.
Historically farmers, every successful business owner for that matter, has learned management techniques from the leaders and managers who have been there a long time and were responsible for the successes that got them to where they are right now. Going forward, while operational management will evolve in the same way as it always has based on the best practices of the successful among us, strategic planning and management for succession require a new fresh perspective.
What was required to strategically manage the farm for succession to the next generation on in 1960 is different from what will be required in 2020. Remember, farm management for succession and ownership transition are not the same thing.
In most cases in my experience only some of the farmers offspring choose to remain on the farm, to run it and own it in the next generation. On the other hand, the equal treatment of all can and perhaps should mean that the assets that make up the farm are left to all of the children, regardless of whether or not they are involved in the farm business.
It is also possible that some or all of the management may be left in the hands of key employees rather than family members. In either case the farm owner must learn to delegate management decision making as successfully as delegating the daily tasks. It can take many years to train the successor management team to the point where the members of the senior generation will feel comfortable enough to relinquish the day-to-day operations.
While some farmers find giving up control difficult for ego reasons, for most it is the fear that comes from having to turn over that which they have worked a lifetime to create, to people they are not sufficiently confident in. They are afraid the inevitable mistakes will wreck the farm and their personal financial situation along with it.
Unfortunately farmers too often focus on the ownership transition and estate planning considerations of transferring the farm to the next generation, while ignoring management development for succession issues. They do nothing about the required succession planning, knowing that since they will not feel comfortable turning over ownership until their successors are ready to run the place they aren't going to turn anything over to them anyway..
And yet the are not doing anything to extend the management element of the succession planning process so the people active on the farm will be capable of ever being ready to take over. If the future leader of your farm business is to have a chance to achieve their potential, steps must be taken starting now to assure that they have the skills, the support of the employees and other family members.
Generally, a gradual transfer of roles and responsibilities gives the successor time to grow into their new position and allows the senior generation farm owner plenty of time to get used to their diminishing role. The most successful farm management successions are those where sufficient lead-time allows for a smooth transition.
Many farm businesses are also dependent on one or two employees who are critical to the success of the business. These key employees are often needed to manage things or perhaps assist in the management of the farm during the transition period. This can be crucial to the farm's survival when there are young children, kids not ready to take on the responsibilities of management, due to the untimely death of the farm owner for example.
Whenever there are employees who might be called on to play a key role in the farm's succession, the plans adapted should address methods to guarantee that these key employees will remain with the farm family upon the death, disability or retirement of the owner.
Veteran employees and family members alike benefit when they connect over the phone in a farmer to farmer mastermind group. It provides the perspectives that come from collaborating with other people like them who have experiences beyond their own. And now that there are Internet conference services they can use to easily manage and keep track of the process, it all becomes automatic.
