NPR - Family Business Continuance: A Global Perspective (p268-274)
The traditional definition of succession in a family business is to pass the assets on to the next generation based on either primogeniture or split equally amongst siblings. Very little thought is given neither to the ‘business’ aspect nor to the emotional complexities which are inherent in a family business and are possibly the most significant factors to be considered in terms of success or failure.
A lack of transparency and poor/ineffective communication between individual family members are cited amongst the main causes of conflict and failed management transfers. In a paper written by Danny Klinefelter, Mark Voeller reports that 60% of failure can be attributed to these issues and 25% as a result of poorly trained successors.
The current global climate is a schizophrenic confluence of sustainability, security (food, water, energy, credit) subsidies and succession overlaid with the Euro-centric view of ‘not in my back-yard’. This pushes production to less environmentally and economically mature countries whose resultant lower costs of production impact on the viability and therefore future of many overtly-regulated EU farm businesses.
Farmers need to take responsibility for where they are today and where they want to be in the future and not blame others for not taking advantage of the opportunities that they themselves could see. To do this, they must become more cognizant of the global pressures on agriculture and food production, the possible impact of this on their businesses and their role within this.
Farmers, like any business must embrace the concept of succession and view this as a segmented process, which takes into account people; their visions, dreams and desires for the future rather than the singular tax-driven asset transfer process that defines succession today. Family farmers cannot remain ignorant of the global context, market pressures and consumer demands, in which their businesses operate nor can they ignore the more professional and strategic aspects of managing their businesses i.e. finances, human resources, communication and conflict management etc.
Keywords: Succession, Business Continuance, Family Farm Businesses
Organization(s): System Insights Ltd (1)