Progression Planning (Succession): Warriors Wellbeing
Progression Planning is about retaining family relationships in the progression/succession process by looking at the people issues before dealing with the financial and business aspects. It is often the unspoken expectations of family members that can lead to the difficulties experienced. If farming families looked at the relationship aspects and people issues of their business as part of the progression plan there would be less stress and misunderstanding.
Why Progression? Mixed messages are received and given using the word “succession”. For most it means “the king is dead” who is the next king? Progression is not just a business transaction, it is primarily about relationships. One of the greatest risks to a farming family’s viability, in the long term, is about relationships and we often don’t see it coming. Progression shifts the focus to how we move the family owned business (especially farming) into the next era or generation and how the older generation can successfully make the transition to the next phase of their lives. “progression” encapsulates these options.
Effective communication allows for awareness, understanding and a basis to reach agreement on issues. Communication must be maintained to both reduce distress and for our positive wellbeing. In fact, many people don’t talk about progression until it’s too late and/or put it off because it is too difficult. The following key topics in progression planning need to be canvassed in detail:
- Family communication. It all starts here;
- What is the farm business? Allows understanding of the business family are involved in;
- What do stakeholders want? Questions to ask our spouse/partner and children about progression and/or retirement and business development;
- Transition period. You must establish an agreement that is suitable to your requirements. It’s not going to happen overnight.
We need to make Progression Planning discussions part of normal conversation in our business. Only the minority, amongst family owned businesses, have any documentation around farm and/or business succession. Families must lead the way and own the process, no one can do it for us. Some simple rules that influence good progression planning are:
- Sort the relationships first;
- Debate the issues openly and with those that matter;
- Start planning early, when your kids leave school the plan should be in place and understood;
- When children come to work on the farm and/or in the business, be clear on where it is going (sell the business not the land or building);
- Seek outside help for more than financial and legal matters (involve more than just the farm consultant, accountant and/or lawyer);
- Have a handover strategy and stick to it.
Remember not all businesses will be able to have a successful progression/succession outcome, for a variety of reasons. Maintain those relationships first, to give it the best shot. “Don’t do what others say, just listen to them, and do what you feel good with” a quote from Warren Buffett that fits in well with progression/succession matters.