February 20, 2002 | By: Laura Skillman
OWENSBORO, KY

 As families look to pass the farm from one generation to the next, a key component to a successful transition is communication.

All too often the farm work gets done but the planning of generational changes does not. Many times it's assumed rather than discussed.

All parties with interests in the operation need to make their positions known, said Steve Isaacs, University of Kentucky Extension agricultural economist.

Every situation is unique with the traditional family farm having a variety of looks and generations involved today. There are multi-family partnerships as well. Whatever the makeup, there is a framework to work by, he said.

It is also important to remember that fair does not always mean equal. Determining what is fair to the son that stayed on the farm versus the ones who did not is something each business must decide for itself, Isaacs said.

Estate planning has to be a part of the successful transition, but Isaacs said without communication between the generations planning on one person's part may not be enough to make a successful transition.

"Don't worry, I'll take care of you," may be the only discussion some farmers ever have with the next generation regarding passage of the farm.

"Too many times this is the only time it is ever mentioned, then the dad or mom dies without an estate plan in place and nobody knows what is going on and it falls back to state laws to figure it out," he said.

This could result, and sometimes does, with wives and ex-wives suddenly becoming business partners if there are children from multiple marriages and the farmer dies without an estate plan.

Transitioning does not come necessarily as the result of the death of someone but can also come as the result of retirement, someone deciding to leave the business or health problems.

Clear, open and frank communication is needed as farmers look to make a transition, Isaacs said. And many of these things need to be written down.

It is important to have shared goals, he said, and to learn to deal with conflicts which can arise.

Isaacs said it is important to have a mission statement and goals needed to achieve that mission. A mission statement is simply a statement saying what your business is about, and why you are doing it. Mission statements are commonplace in corporate America, Isaacs noted.

Goals need to be specific, measurable, attainable, and reflect what you are doing, he said. Then, tactics are what you do to reach those goals. More time is spent on tactics than on anything else but more time needs to be spent on setting goals and redoing them or revising them periodically.

This mission statement and goals need to be communicated.

"Too often we have a failure to communicate," Isaacs said.

It is also important to think about how nonverbal communications may affect our interactions with others.

Remember that anytime you have multiple people with multiple goals there will be conflict, he said. An example may be as a father looks to back away from the active operation he may have one set of goals for that business, while his son who is moving into more responsibility may have others.

How that conflict is resolved can play a major role in how successful that farming business transitions from one to the other.

It is important not to avoid the conflict and not to get angry. To resolve conflict try brainstorming, be nonjudgmental, listen, compromise, weigh the ideas, choose one of them and evaluate the outcome.

Isaacs said blocks to effective communication include blaming someone, insulting someone, interrupting them, being sarcastic, making excuses, changing the subject, mind reading (finishing someone's sentences) and nonverbal language such as rolling the eyes or shaking the head.

Things that can enhance communication are listening, acknowledging that different people communicate differently, asking questions, and putting things in writing.

Isaacs noted that as one considers that statement, "don't worry, I'll take care of you," they should be concerned.

"We have this notion in agriculture that unless we are out there doing something - turning over some dirt or putting some seed in the ground - that we are not doing anything," he said. "When you spend a lifetime building a business, you ought to spend a few days determining how you are going to transition from one generation to another."

Contact: 

Steve Isaacs, (859) 257-7255