Something that we often hear said in relation to Succession Planning is that it is “too hard”. One of the reasons for this is that is perceived to be such an enormous undertaking, it is considered overwhelming.
For most, it is a matter of not knowing where to start. Families can be overwhelmed by the number of decisions that need to be made; their lack of clarity often in even knowing what questions need to be asked; the fear around the difficult conversations that need to be had, and the fact that there is a lot of emotion involved.
One of the first things to realise is that Succession Planning is a process rather than an event, and therefore the issues can be resolved one step at a time. They do not have to be dealt with all at once. The things that can be planned for can be planned, and flexibility can be left where it is needed.
So the starting point is with the business owners, who are also generally the parents in a family farming situation. It is important that these people are crystal clear about what is important for them in both a business and personal sense, and how they see their future. It is also important for them to realise that ‘Mums’ and ‘Dads’ do not necessarily want all the same things in their futures, and that this is absolutely normal.
In the Succession Planning process Mums and Dads take priority over everyone else and this can be a difficult concept to grasp. They need to be aware that they are responsible for their own clarity. Once they are clear about what their needs and expectations are, it is easier for the remainder of their family to gain clarity, and make the decisions they need to make.
To gain clarity, these are some of the questions that need to be asked:
• What is the purpose of our business i.e. what are our goals and what are we wanting to achieve?
• Is our business viable i.e. can our business meet our goals?
• What are the roles and responsibilities of the different family members i.e. are they clearly defined, and is there a process in place to allow for a smooth transition?
• Is there a retirement plan i.e. what does it look like, what will it cost, what does each partner want, what are the options?
Open and honest communication is vital in the Succession Planning process. As much as many may find succession a “grubby” conversation to have, it is absolutely necessary to discuss the issues face to face in a forum that allows family members to hear from each other. It is a mistake to assume we know what other family members want.
When communicating in this situation it is also important to realise there will be conflict. What matters is how the conflict is viewed and handled. Conflict occurs as a result of difference and is therefore quite normal. It needs to be talked about and resolved, rather than left to fester. Read More. . .