Merle Good makes his living by telling other people how to put together succession plans. But he got a taste of his own medicine when daughter Annessa came back to the farm.
“Doing it is a hell of a lot harder than talking about it,” said Good, owner of GRS Consulting. “It’s a lot of work to try to get the different personalities and skills and attitudes to merge. It’s a lot harder than I thought it would be.”
It’s a familiar story on farms across Canada. On many farms, young people are returning from post-secondary schooling or after working in other industries. And with a third of the current farm workforce expected to retire (or hand over the reins) by 2025, the generations will have to learn to work together in the farm business.
His experience isn’t unusual — it’s tougher than you’d expect, said Merle.
“When these children come home, we see it in some ways as a threat to our stability,” he said.
“So there’s fear and apprehension, no matter how much we think of their skills.”
There’s fear on the other side, too — fear of failing.
“The younger generation has been stereotyped for so long as being ‘impatient’ or demanding,” said Annessa Good, who recently returned to the farm and joined her father’s consulting business. “But we’re dealing with completely different numbers. We have the pressure of having these massive farms and the risk that comes with that.”
And going from a parent-child dynamic to being business partners means both sides have to adjust. The older generation is used to being in charge and wants to share their expertise and experience. But the younger generation have their own skills and experience, and want their ideas to be heard and valued.
“Even when I was a brand new intern working at ConocoPhillips in downtown Calgary, we were constantly being asked what our opinion was or what we thought we could do better,” said Annessa. “So when you come back to the family farm and say, ‘I think we should do it this way,’ it’s very commonly taken as a challenge.”
“Well, Conoco didn’t raise her,” Merle interjected with a laugh.
Give and take
Both generations have a role to play in changing that dynamic, he added.
“If you keep on thinking questions or inquiries are challenges to your ability and authority, you’re not going anywhere,” he said of the older generation.
The younger generation, on the other hand, needs to “take a step back” and approach these conversations differently, with more thought and respect, said Annessa.
“All of us have to recognize that our parents have been running the farm sustainably enough that there’s even an option for us to come back home,” she said. “They know what they’re doing nine times out of 10.”
For Annessa, shifting that parent-child dynamic meant treating her work in the farm business like any other job.
“It’s a family farm, but it’s also a business,” she said. “So the biggest thing I’ve had to learn coming back to the farm is that these are my bosses. You’re suiting up to work as soon as you walk through the door. You have to treat it like that.”
For Merle, it meant clarifying roles, responsibilities, and expectations.
“One of the major things I’ve learned is that the younger generation needs a lot of clarity,” he said. “If we sit down on Monday morning and make a list, the week goes very well. If we don’t, it doesn’t. It’s more formal than I thought it would have to be.”
But the pair has found that putting things down on paper helps both generations understand their changing role in the operation, and that’s been vital to their success, said Annessa.
“Sitting down and having a business meeting and making it formal is hard — there’s always something else to do — but it just opens channels of communication,” she said.
It isn’t just about formalizing roles and responsibilities, though, but also clarifying how the business structure will change to allow the child to become an owner.
“If all we’re going to talk about is roles and responsibilities, all you need is a hired hand,” said Merle. “You have to start there, but then you’ve got to have a path to ownership. If you provide that clarity of purpose and direction, the day-to-day frustrations will work their way out.
“If you don’t have that, you’re working on a promise rather than a plan.”
And without that plan, the business can’t move forward successfully, said Merle. In his experience, farm businesses can expect to see gross revenue increases of up to 15 per cent within three years of a child returning home to the farm, even if that child isn’t working in the business full time.
“You’ll see 10 to 15 per cent of gross revenue increase without one dollar of capital purchase or one more acre of land,” he said. “You’ll have new ideas and you’ll be doing things differently. You’ll just have different opportunities.”
But in any successful succession, the older generation needs to “create the proposal and quit trying to create the plan.”
“If the parents make the plan, the children aren’t taking responsibility of the direction,” he said.
“The second generation has to take the proposal and create the plan, and then come back to the parents and say, ‘Can we make this work?’”
It’s a shift from the traditional top-down succession planning process that was common in the past, said Merle. That’s why he and Annessa created a new succession planning ‘boot camp,’ which will be hosted with Agri-Food Management Excellence in Calgary on Dec. 12.
“Even after going to school and working, I still felt like I didn’t know enough to go forward with Dad when I came home,” said Annessa. “I felt like we just needed a quick boot camp to cover these topics.”
The ABCs of Intergenerational Succession Planning is a one-day course covering traditional topics such as navigating farm business structures, creating operational clarity, and managing roles and responsibilities. What’s different is it’s being given by two people who are thick in the middle of the process.
“For the first time, the younger generation will see someone standing up there who’s like them and sharing in their perspective,” said Annessa.
“For years, we’ve had succession planners stand up there and say, ‘This is how it needs to happen.’ But it’s different to have someone up there like you who can show you how to move forward with these operational clarities.”
That will be a welcome change for Merle, whose primary focus has been on the older generations in past workshops.
“For most of my seminars, the parents are coming and bringing their children,” said Merle.
“In this one, I’d like to flip that around. I’d like to see the children coming and bringing their parents.
For more info, go to agrifoodtraining.com.