Sign In | Create an Account | Welcome, . My Account | Logout | Subscribe | Submit News | Contact Us | Home RSS
 
 
 

What does the next generation expect?

Your Farm Business

March 9, 2012
From Wayne Schoper and Rich Baumann - South Central College

The second farming generation expects several things from the first generation, as well they should, if the two generations are to work together successfully.

One of the most important things the younger generation wants is to have the senior generation share its plans and vision about the future. A major complaint was that the older generation keeps their plans locked in their minds. This often results in second guessing, wasting both time and energy while the second generation attempts to plan their lives to mesh with the first generation.

Sometimes long term planning is hard for the elder generation. Sitting down and mapping out when they are going to retire is a reminder that none of us will be here forever. That can be an uncomfortable thought.

However, the second generation needs to know the general plan of the first generation so they can plan their future. Will the second generation be moving into the house on the home farm? Will the first generation be expecting the second generation to start buying out the equipment? Has the first generation made plans to protect the second generation in the event of an untimely death? Does the first generation have a will or a plan that the other children are aware of or will there be mass chaos in the event of the death of a parent?

These are all questions that the second generation needs to know. The first generation does not need to provide specific details about who gets what assets or even their own net worth, but the second generation needs to be able to plan their future just as much as the first generation.

The second major point that the younger generation wanted to make to the first generation was the desire that the first generation listens to the younger generation's plans and expectations, without getting emotionally charged, on an objective basis. Face it. Mom and Dad have worked hard and have experienced some uncomfortable moments over the years building the business that is operating today. They have often tried things that didn't work out as well as planned.

As the first generation gets older, they become more conservative and become less willing to take risks. The first generation may lose sight of where the operation needs to go if the operation is going to be successful through the next generation. Conflicting goals of running a conservative operation yet allowing the operation to grow can cause problems when attempting to evaluate new ways of performing day to day tasks or expanding the operation through new alternative enterprises.

The first generation has a hard job. However, if the first generation takes the approach of the "chairman of the board" (COB Approach), they will find that the second generation will have the opportunity to express themselves and create plans without threatening the first generation.

The COB Approach works something like this: second generation has an idea and goes to the first generation. The first generation really thinks it's one of the craziest things that they had ever heard! They had even tried it 15 years ago and know that it won't work. However, if they just say "We're not going to do that and we're not going to listen to anything about any change," then they slam the door in the face of the second generation.

How should this type of situation be handled? The COB Approach would have the first generation to go back to the second generation and say: "that sounds interesting; what will it cost to implement these new changes and what benefits will generate for the farm?"

Ninety percent of ideas that are not sound disappear when individuals take the time to push the pencil and calculate the cost and returns of a new practice. Of the remaining 10 percent, half of them might actually work!

What about the harebrained ideas that the second generation believes will still work? One option under the COB Approach would be for the first generation to calculate their risk on one of those ideas that they do not believe will work. How much would the mistake actually cost? Sometimes mistakes are our best form of education. A mistake that would only cost the farm $2,000 might be one of the best expenditures that an operation could make. However, by writing it down and documenting the objective analysis, you are less inclined to make the same mistake in the future.

A business operation with two generations can be a very successful venture because you can combine the conservative approach of the first generation with the drive and spirit of the second generation and create a team that will bring success to your family business.

(This information is from an article by Dr. David Kohl.)

 
 

 

I am looking for:
in:
News, Blogs & Events Web