Who will manage your farm tomorrow?

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Have you considered who will fulfill the management role for your farm after you?

Determining your replacement is never an easy job, but it may be one of the most important things you do to ensure the continuation of your business.

The transition of management skills and responsibilities doesn’t happen by accident or overnight. It is a process that takes time and planning.

More than estate plan

Farm succession is a topic we hear a lot about today, but most questions are related to how to develop an estate plan that will help us pass the tangible assets of the farm onto the next generation. But, that is only part of the process.

Even with the best estate plan, if a plan for passing on the management skills and responsibilities is not established, a successful transition of the farm will be difficult at best.

Current managers shouldn’t wait until a month before they retire to begin preparing the next manger. Lack of preparation and knowledge of the business by the new manager can be a recipe for disaster. As a result, many family businesses fail after they have gone through the transition process.

Only 30 percent of family-run companies get to the second generation and 15 percent of family-run companies get to the third generation.

What you can do

To aid your farm’s transition, there are some steps you can take to ensure the next generation is prepared to take over the farm management responsibilities. It’s never too early to start thinking about who will take over the management responsibilities.

It’s important to remember management is not a birthright nor is it inherited. The next manager may or may not be a family member.

Family ties. If it is your intention that a child will follow in your footsteps, then you should engage your children in the business early. Give them opportunities to learn skills, while at the same time balancing time to enjoy youth activities.

It is a good practice to encourage education and employment away from your farm before the next generation joins the business.

Decisions, decisions

It is also important to assess skill sets and interests. Not everyone is interested or capable of taking on the role of manager. A good way to start the process is by involving the potential successor(s) in current decision-making opportunities. Provide them opportunities to make decisions and also give them the authority to carry out the decisions.

Along with the decision-making authority, comes the responsibility for the outcomes, whether it is positive or negative. Remember as you are training the next manager(s) through this process, so be sure to give credit and positive reinforcement for successes.

If the outcome from the decision is negative, don’t place blame, rather use this as a teachable moment and work together to figure out the next step(s) that will need to be taken to adjust the situation.

What’s expected

A clear understanding of the managerial responsibilities is another important aspect of preparing your successor. This is especially important in the case where there may be more than one manager — one who handles the operational duties of the business and another who handles human resource issues.

Job descriptions and clear expectations are important, even more so in this case.

Managers should also understand what management entails. Duties such as: planning, budgeting, organizing and staffing, controlling, problem solving and monitoring the results.

Leadership

Along with management responsibilities, the new manager will also take on leadership of the farm business — establishing direction through a farm vision, mission and goal statements, employee motivation, and working with employees to create effective teams working toward achieving the farm’s mission.

Management and leadership skills are not something that one is born with. Although they entail different skill sets, both management and leadership skills can be taught and improved through experience and training.

As the current manager, it’s up to you to encourage future managers to take advantage of opportunities to learn more about the day-to-day skills needed to manage the business.

Improving leadership should not be overlooked. The farm business needs the guiding force of a strong leader to take it into the future. Preparing the next generation to take over the management role is a unique opportunity for you.

Think of this task as a step you must take in continuing to build your farm business. This process is one of the most important steps you will take in creating your lasting legacy — your family farm business.

About the Author

(Julia Nolan Woodruff is an OSU extension educator in Ashland County.) More Stories by Julia Nolan Woodruff

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