Obstacles to succession planning, and how to overcome them

It is critically important to address common problems before you get down to the business of succession planning. Addressing these challenges proactively and in a positive way will enhance a family agribusiness’s chances of enjoying continued success and prosperity, says Trevor Dickinson.

Obstacles to succession planning, and how to overcome them
It is important to appreciate the problems your predecessors may have had to solve in order to ensure the future success of the business.
Photo: FW Archive
- Advertisement -

To be profitable in the long term, family agribusinesses need to confront the obstacles inherent in succession planning. These obstacles often prevent family members from moving from their current state to navigating the succession planning process smoothly and successfully.

Challenge 1: Lack of appreciation, recognition, and love
The problem: The senior generation desperately wants appreciation from their adult children, but they will deny this fact to their dying day! Younger-generation adult children have the same issue: they are still looking for recognition from their parents for their accomplishments and uniqueness.

The lack of feeling recognised and appreciated underlies many of the problems in family-owned agribusinesses. There is an implicit assumption that people are loved, but the fact that it is rarely expressed often creates an obstacle.

- Advertisement -

The solution: Teaching family members how to talk about their expectations of each other in an emotional sense, and how to express appreciation, recognition and love. Many families have a hard time doing this, and just take it for granted. Most families need to learn that the emotional bottom line in a family-owned agribusiness is just as important, if not more so, than the financial bottom line. Appreciation, recognition and love need to be expressed regularly.

Challenge 2: Lack of forgiveness
The problem: When there has been a breakdown in family relationships, lack of forgiveness gets in the way of success. It is almost impossible to go through life and be involved in a family business without inadvertently stepping on each other’s toes from time to time. Those families that don’t have the capacity to forgive each other for their transgressions will clearly have a hard time being in business together.

The solution: Drawing upon the family’s religious background can help to bridge this gap successfully, since most religions have a philosophy of forgiveness. If the family is not religious, recognising the need to set aside grudges for the sake of the business is an important first step.

Challenge 3: Control
The problem: The issue of control, which is the very thing that makes owner-entrepreneurs successful, is also their Achilles heel. The reality is that it is not only the entrepreneurs, but the family as a whole, who have to deal with the control issue. In short, it is about change, and change is difficult even when positive. It can be a major problem for an entrepreneur who has spent the majority of his or her life closely with the family business.

The succession planning process can be seen as treacherous by the senior generation in that it can cause them to think people are trying to change them and take away their farm.
Change is one of the most difficult aspects of life for all of us. In the context of family-owned agribusinesses, it is not unusual for people to expect others to change so that something good can occur. This expectation is a formula for disaster.

The solution: Take responsibility for what you can successfully contribute to the family business and also take full responsibility for your contribution to the problem. If necessary, help other family members take full responsibility.

Challenge 4: History
The problem: While family history generally includes difficulties, the older generation may go out of its way to talk only about the good things. But family-owned businesses that struggle to create their future are often those that have not faced past difficulties. In short, positive achievement should be celebrated and past problems acknowledged.

The solution: During the succession planning process, seek to understand the significant difficulties your predecessors may have experienced. By understanding your family history, you may be able to overcome the difficulties in succession planning.

Challenge 5: Emotional scarcity
The problem: Emotional scarcity is one of the most difficult issues in the context of family agribusiness succession. What makes it so insidious is the fact that it is invisible because of the underlying assumption of the family that “there isn’t enough to go around”. This issue often manifests itself in the discussion of money, roles and power.

In a family-owned agribusiness, there are two bottom lines. The first is the standard financial one. The second is the invisible, emotional bottom line. It is the lack of expression of appreciation, recognition and love, and it is the underlying problem of emotional scarcity.

The solution: There are two strategies that help with the issue of scarcity. The first is to have family members talk directly about what they expect from each other. The second is to empower family members to achieve their fullest potential, whether inside or outside the family business. In doing so, families begin to understand the sense of abundance that exists in the world for all of us.

Challenge 6: Entitlement
The problem: This is often seen as a younger-generation issue, and involves family members using their name as a way to achieve advantages over other people in the organisation. Senior family members may also feel entitled to continue to take primary responsibilities of leadership. This usually has a negative effect on morale.

The solution: Work together to talk about the best interests of the business and all stakeholders and how you can all continue to help the family and business be successful. Having a common family vision alleviates the issue of entitlement and makes it much easier to create win-win succession strategies and solutions.

Challenge 7: Indirect communication
The problem: Family members involved in the business often talk indirectly with other family members about issues they may have with other members of the family, but don’t speak to the people involved.

The solution: Understand the pitfalls of indirect communication and make a point of using direct communication.

Challenge 8: Differences are seen as a liability rather than an asset
The problem: Family members often think about small business differences as issues they don’t want to bring up with other family members. As they want to maintain harmony, they often inadvertently create the very problem they’re trying to avoid by not discussing their business differences.

The solution: Teach family members how to discover their differences and use the synergy created by these differences to do things in ways they otherwise might not have considered.

Challenge 9: Poor expression of feelings and wants
The problem: In many family businesses, the members don’t have the capacity, experience or confidence to express their feelings and wants, and while they may have expectations of each other about what they want in an emotional sense, they are reluctant to voice these expectations.

The solution: Family members can benefit if they engage in a communication training process that allows them to become more familiar with, and confident about, being able to express their feelings and wants. They can quickly learn the skills necessary to transcend this obstacle.

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