The secret to turning your farming business into a lasting legacy

The most successful agribusiness families understand that their enterprises are not possessions; instead, they are legacies that they are obliged to take care of for future generations, writes Trevor Dickinson.

The secret to turning your farming business into a lasting legacy
A farming family that emphasises stewardship views the business as an entity to be nurtured and improved over the long term. It is not there for maximum wealth extraction in the least amount og time. This means the welfare of the business as a whole comes before the interests of each co-owner. Photo: FW Archive
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Running a family agribusiness and apportioning its wealth inevitably gives rise to conflict from time to time. Families who negotiate this conflict successfully almost always do so because they have adopted a special perspective about what they own.

These thriving multigenerational agribusinesses live by the principle that the enterprise is not a personal possession; rather, it is a trust given to them for safekeeping and for which they have great respect.

These agribusiness owners don’t view themselves primarily as proprietors; they recognise that their families are entrusted with the responsibility of stewardship.

Of course, members of these families occasionally have their differences. But even though they may argue at times, their sense of stewardship brings them back to unity of focus and effort.

Most importantly, it tempers proprietary interest, which is typified by a “What’s in it for me?” or “It’s mine and I can do what I want with it” attitude.

Stewardship-orientated families share a sense of attachment to, and personal investment in, the company’s purpose and values. Their allegiance is to the business itself more than to the individual company managers. In other words, these families know why the business is worth all their trouble, and worth more than their individual proprietary interests.

In 1997, the French luxury goods manufacturing giant Hermès won the prestigious Family Business Award from the International Institute of Management Development. Accepting the award, Bernard Puech, one of the owners, told the audience of more than 200 family business owners: “We in the fifth generation do not view ourselves as owners of the company; we are merely taking care of it for our children.” This compelling statement exemplifies the sense of sacred trust shared by business families who have developed a stewardship paradigm.

Paradigms encompass the prejudices, values, beliefs and perspectives learnt from our experiences over the years. They filter our views of the world and inevitably shape our behaviour.

Although no two families in business have exactly the same ownership paradigm, their actions and attitudes reflect some combination of the stewardship and proprietorship orientations.

The Proprietorship Paradigm
Family members who approach ownership primarily from a proprietorship orientation view
their business as a possession that they are entitled to exploit and consume. The proprietorship orientation can easily fuel conflict as family members vie with each other to use the business for their own purposes. In some business families, greed and a self-serving attitude masquerade as claims of rightful reward and return on investment.

Conflict occurs when interests clash, and self-defense inevitably emerges when parties are polarised and win-lose patterns are established. Agribusiness owners with a proprietorship orientation hold beliefs such as the following:

  • Business ownership is my right and I’m entitled to the benefits.
  • My business exists for my best interests, and I expect it to adjust to my needs.
  • Every day brings a new threat by those wanting to destroy what I’ve built and worked hard for. I’ll protect my rights, regardless of the cost.
  • I intend to take as much as I can out of this business.

The Stewardship Paradigm
Families who emphasise stewardship view their businesses very differently: as trusts to be guarded, preserved and nurtured. Promoting the welfare of the business as a whole, above the special interests of individuals, is considered a primary obligation of ownership.

These families relate to each other and their businesses in a spirit of gratitude for their perceived abundance as opposed to a sense of entitlement. There is a sincere and workable balance between self-interest and the common good. Behaviour and interactions are characterised by trust, confidence, respect and openness.

The stewardship orientation nurtures attitudes and actions that help business-owning families resolve differences and renegotiate expectations. While individuals may differ about what to do and when and how to do it, the stewardship orientation brings them back to the centre and enables them to recognise the purpose and mission behind their decisions and actions.

Members of these families tend to hold the following perspectives and values:

  • They treat the agribusiness as an opportunity entrusted to them, and consider it their mission to ensure its well-being.
  • They take to heart their commitment to long-term success. This means going beyond lip service, offering quality products and services rather than cutting corners to make a fast buck, and attending to the real wants and needs of their customers rather than selling them short.
  • They feel a genuine sense of loyalty and caring toward the family as a whole and each other individually.
  • They live their lives with a spirit of gratitude and a sense of abundance, as opposed to entitlement and scarcity.
  • They recognise that they are not islands unto themselves; when appropriate, they ask for outside help.
  • They acknowledge the importance of being a ‘relationship-first’ family business. They spend time, money and energy on opening up communication, developing a process for sharing information, building consensus, analysing and solving problems, and creating policies and procedures that keep family and non-family employees working together. In short, they understand that relationships are part of the foundation of the family business, and try to assess them honestly.

The Principle of Stewardship
Stewardship is the most common value seen in families who are successful in passing their business from one generation to the next. To be a good steward is to take personal responsibility for leaving resources better than they were when they came into your care.

Stewardship springs from the ancient idea that the wise management and passing on of property and privilege is an honourable role that brings meaning and pride to the steward.

An entrepreneur or owner who values stewardship believes it is his or her duty, responsibility and privilege to pass the agribusiness on to others for them to build and serve in a similar fashion, creating a process of continual improvement and progress through the generations.

Agribusiness owners who see themselves primarily as proprietors will have no reason to continue growing their businesses, taking risks or looking for opportunities once they have all they need or want. Owners who value stewardship, however, remain truly committed to the ongoing growth of the business. They are motivated to continue to take risks, looking for opportunities and working extra hard, and they continually find meaning in doing so.

Guiding the next generation
Agribusiness owners who embrace stewardship will be more motivated to submit to the difficult process of succession. Stewardship encourages them to prepare a successor or successors.

It helps them with the difficult step of giving up power in the business and relinquishing control, and it helps them teach younger family members to lead the way.

An attitude of stewardship empowers business owners as parents, too. Families who believe in proprietorship risk creating a sense of entitlement in their children, because the perspective that children experience at work is a self-centered one. In contrast, families who believe in stewardship have an opportunity to pass on a more generous, future-directed approach.

This equips the children of wealthy, successful business families to cope better with inherited wealth and privilege.

Trevor Dickinson is CEO of Family Legacies, a family business consulting company. Visit family-legacies.com.

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