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How value, vision and goal setting make for a powerhouse transition plan

8.5 min read
Business and family thrive when you identify your values, create a vision and set goals 

Think of two people grabbing the steering wheel of a moving truck. One person represents your farm family. The other person has your farm business’s best interest at heart. It’s only when the two agree that they can safely get to their destination. 

A big part of a farm transition plan is reconciling business and family. A well-executed plan maintains a healthy family unit and their vision of a successful future – whether that’s keeping the farm business as is, changing the operation into something different or selling off major parts.

For the transition plan to head in the right direction and for family buy-in, everyone involved needs to take three important steps:

  1. Determine shared values and guiding principles 

  2. Create a vision for the future

  3. Set realistic goals to make it happen

Step 1 – Shared values and guiding principles

To know if your farm transition plan is successful, you need to establish what success looks like. Determining what your family values most helps set the core elements. And it’s unlikely that a plan that runs contrary to your family’s values will succeed.

Values are principles - or standards of behaviour - that guide you and your business on how you approach decisions and conduct yourself. They’re the root of who you are and how you expect the world to work. They’re constant and don’t change by sector or your operation’s management structure.

Keywords used to describe your core values may include integrity, high-quality, respectful, meeting the needs of consumers, protecting the environment and being humane. Also, think of words like loyalty when you have a high value for a strong connection to family and employees.

Having long-term thinking as a value means choosing a healthy farm for the long-haul over a riskier short-term profit. A family that values being nimble and entrepreneurial would prioritize agility to take advantage of new opportunities. Core values of trust and honesty describe the way you communicate as a family.

Required: A strong family foundation

Families should spend time having fun together recreationally. It builds a strong foundation and balances out the tough times. Families who have worked together their entire lives are prone to taking each other for granted. The survival and health of both your family and family business hinge on effective communication – and it can’t happen without a good family foundation. And this only happens when family members are taking an active interest in each other’s lives.

Clarify and document what’s important to your family and how those values guide your business and personal decision making. The values you identify are at the root of who you are as a family and business. And it’s very common for a farm to have the same core values for the family and farm business. It’s one of the primary drivers behind Canada’s strong and resilient agriculture sector.

Exercise your communication muscle

A good farm transition involves talking about things that some family members would rather remain unspoken. Make good habits around communication. Discussing and documenting the farm’s values can bring everyone together in a common mindset. You can improve whether your family communicates a little, a lot, positively or negatively. Talking about the smaller stuff leads to better outcomes when working through bigger decisions. Start by being more curious and less judgmental. Check out Assessing transition readiness for some great communication tips.

Everyone should take time to assess and identify values. Have everyone create their own list before coming together. Think about it. Talk about it. Write it down.

Step 2 – Create a vision for the future

Values are ingrained and don’t change. And people should never throw away their values in pursuit of a goal. But a solid vision can draw people together and motivate the team when it matches their core values.

The vision should address where the family farm is going. For example, is the priority to pay down debt, expand, focus on a specific enterprise or diversify? Then the next and senior generations need to align on a vision for the farm.

One challenge in defining vision is addressing business versus family priorities. For some, the vision is to manage the farm by putting business decisions ahead of family considerations. This doesn’t diminish the importance of family. It just acknowledges that making the best business decisions may require changes, sacrifice and compromise.

For others, the vision is to prioritize the family aspect of the operation and attempt to satisfy all family members on every issue. This will take discussion and negotiation to reach a plan that all parties can support and commit to. Both approaches are valid, and there’s usually a comfort zone somewhere in the middle.

Business mindset change

Consider the farmer who has encountered a cash flow crunch and must seek additional credit to cover expenses. Knowing this news would cause concern and maybe even conflict with his two sons who farm with him, he keeps it under wraps. But as the season progresses, it starts to affect decisions for the future of the operation, including replacing a tractor that needs a major repair.

Under the impression that finances are okay, the boys are keen to upgrade instead of fixing the tractor. It’s understandable that as the head of the family and the farm business, the farmer is reluctant to share the challenging news. But this lack of communication can potentially damage and set the business back, because they’re operating under false assumptions.

Shift your mindset and focus more on the business and less on how the family will react. Put control and pride aside to ensure the right people are involved and are aware of what’s happening, and set a timeline to complete the task.

Vision goes beyond deciding to run the operation as a business. The senior generation should have a personal vision for their retirement. Where do they want to live? What kind of hobbies do they want to pursue?

The same applies to the junior generation. What changes do you envision for the farm over the next five years? Will your spouse work on or off the farm? What will the living arrangements be going forward? How will the debt be serviced during and post-transition?

How to write a vision statement

A good vision statement is motivating and actionable. It inspires and aligns everyone to a common purpose and helps you make better decisions. Keep your vision statement clear and short and make it something you can remember. If you can’t remember it, it won’t help. Progress towards the vision can be monitored and discussed at meetings. A vision statement is especially helpful for the next generation who are eager to know how they fit into the plan. Here’s how to develop your vision statement.

Step 3 – Set realistic goals to make it happen

Setting goals takes leadership and enables leaders to measure success. Whether family or employees, everyone should be held accountable (including leaders) for their role in achieving specific goals. Determining values and creating a vision provides a background and environment for moving forward. Setting goals provides concrete objectives to strive towards.

Achieving any size of goal provides motivation, direction and validation. Everyone wants to be recognized for their contribution. And employees routinely rate recognition higher than a cash bonus as a key motivator.

Younger family members and farm employees often wish their leaders would offer more guidance – that’s where goals come in. If everyone knows the overarching farm goals and their personal goals, they can better understand what’s behind everyday decisions. When people have a goal, they are more focused and engaged.

There are a lot of tangible goals on the farm, like revenue, yield targets or reducing expenses. But in transition, there are less tangible goals too - like passing on knowledge from one generation to the next for junior and senior partners.

Junior partners - think of all the tasks on the farm from operations, to finance, to marketing and your ability to lead. Determine where you need training so you can take on new responsibilities and figure out how you’re going to benchmark progress. Set training goals and think about the best place to get that training.

For those nearing retirement - setting goals that position the next generation to succeed is only part of the equation. They should also relate to life after leaving or reducing responsibilities on the farm.

Take every opportunity to ask “why?”

The junior partner should channel their inner five-year-old. There’s a lifetime of experience in the senior partner’s brain. Mining this knowledge is often best done in the moment when a decision is being made.

Ask, “why?” at every opportunity. Sometimes, there won’t be a good answer to that question. Those moments should make both the junior and senior partners think - and that’s an opportunity to grow and revise.

One of the first goals might also be one of the hardest - a shift in the relationship between the junior and senior generations.

The junior partner can’t be “the boy” or “the girl” forever. They must be allowed to gradually step into management as an equal as they develop managerial skills.

Senior partners: Start referring to your children as “business partners” when meeting suppliers or customers. They’ll always be your child, but stop reinforcing that relationship in business situations.

Junior generation: Start taking responsibility as if you’re the senior partner. Ask to be involved in reviewing financial statements and borrowing strategies. If Dad has always run the combine, suggest switching roles for part of the harvest. Encourage Mom and Dad to take that trip they’ve talked about and put off for years. Show them you’re ready for more responsibility and leadership.

Sharing common values, buying into the vision and working to meet a clear goal – are three things that turn individuals into a powerful team and will help shape your farm transition plan.

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