Minding Ag's Business

Forget giving your family members and business partners the silent treatment. DTN's family business adviser, Lance Woodbury with Ag Progress in Garden City, Kansas, tackles the "avoidance instinct" in his current DTN column: In other words, how can we get family business owners to overcome their natural reluctance to lay out a path for transition. Silence actually contributes to family business failures more often than not. Dodging the discussion lets anxiety fester, postpones another generation's ability to invest effectively and can add unnecessary tension to on-farm and off-farm heir relationships. So I'm continuing the conversation with Lance here, in the hope it will cause folks to muster the courage to converse on those hard topics:

Taylor, DTN: Lance, in your recent column you wrote about why people avoid conversations about the future. If a reader is motivated to start the discussion, how would you suggest going about it?

Woodbury, Ag Progress: Marcia, I would encourage readers to separate the process of talking about the future, from the content or specific issues that need discussed. In other words, think first about when the conversation should happen, who should be at the table, and where the conversation will take place, and then worry about the specific issues, their order and outcomes.

For example, a natural time to have a discussion about the future is when family members are home for the holidays. But this can bring stress to the conversation. If the family has a history of negative interaction, keeping the meeting away from the Thanksgiving dinner table may be important for maintaining harmony.

Another question arises as to the role of off-farm siblings or in-laws. I encourage as much inclusion of others in the conversation as possible, as having the discussion “filtered” by someone who was there to someone who was not can create misunderstanding. But not everyone is comfortable with in-laws as part of the initial conversation. In one family, we have a meeting with direct descendants for awhile, and then we bring in the spouses to discuss the results of our conversation, answer questions, and consider points not raised earlier. While not as efficient, it gives the family a chance to talk more candidly but still brings up to speed those with a strong interest in the outcome. (Every family has a slightly different culture around this kind of communication, and it is important to both respect that culture but also help it “evolve” as the family grows.)

Finally, choosing whether to have discussions at the office, someone’s house, or a neutral location can be important. Many times I opt for a neutral location, which can help everyone feel that they have an opportunity for equal contributions in the meeting. Conversations at the office can unwittingly promote the views of those in management, while conversations at someone’s house might make the discussion too personal for some.

Taylor, DTN: Lance, those suggestions make sense but seem like the easy part! Isn’t the content of the conversation the hard part?

Woodbury, Ag Progress: Marcia, the content is certainly more complicated, but I start with the process because deciding when, how to include others, and where to talk are actually decisions that move the process forward. It’s subtle and somewhat subconscious, but making those decisions helps build momentum toward some of the tougher issues that will need airtime. It’s like going for a jog: a big part of the battle is putting on running shoes and getting out the front door!

Taylor, DTN: What are the key topics people should discuss?

Woodbury, Ag Progress: I suggest five areas for discussion: vision, roles, goals, next steps and ongoing communication.

“Vision” is about the long-term: 10-20 years or even longer, and asks questions around the senior generation’s legacy, the long-term impact of the business on future generations, or on the community or industry. The “roles” discussion is about how people want to participate in the future. Some may want to work in the business, some may want to stay involved but at a high level, others may want nothing to do with the business.

Setting “goals” is a shorter-term activity, perhaps one to three years, and there can be estate planning goals, succession or retirement goals, business performance goals, education and personal development goals, etc. This goal discussion is intended to answer the question, “What needs to happen in the next few years to generate personal and professional happiness?” “Next steps” focuses on what is needed to implement the things that have been discussed, and “ongoing communication” ensures that we don’t have just one meeting and stop the process.

Sometimes it helps to have a third party facilitate the conversation, but I encourage families to have the discussion first on their own. Some of the other professional advisers the family uses, like accountants, attorneys or wealth mangers, can be good facilitators, or there are a number of family business consultants that can be helpful .

For a consortium of North American advisers I work with go to http://www.familybusiness.ag/… . You can also find family business consultants with the Family Firm Institute or university business schools that specialize in family business and entrepreneurship, including Northwestern University, Notre Dame and Babson College.

Follow me on Twitter@MarciaZTaylor

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