Family Business Matters 01/27 05:00
The Communications Champion You Need in Your Family Farm or Ranch Operation
Improving the "family" part of business requires a leader who facilitates
DTN Farm Business Adviser
A new year often brings hope for a better year. In a family farm or ranch, a
better year is not limited to economic improvement but includes hope for better
The challenge, however, is that better family interaction doesn't happen
without intentionality and focus. Just like you take concrete steps to improve
yield or reduce expenses, you must encourage plans and embrace discussions that
reduce uncertainty and create clarity. Someone -- whether it be you, a sibling,
a parent or a spouse -- has to champion the goal of improving the "family" part
of a family business, and his or her work begins by getting people to talk.
In a family-owned business, there are two overlapping categories of
interaction. One category is operations, where people are focused on the
specific tasks they perform every day. Topics in this area of discussion might
include how we are attracting, compensating and retaining staff for the farm or
It can include talks about planting or harvesting logistics, grazing plans
or calving schedules, or equipment, barn or bin maintenance. You might discuss
inputs, vendors, equipment needs or marketing decisions. The topics here are
the basic ingredients of what makes the business perform each and every day.
This is where the day-to-day operating decisions come into focus, and if the
conversations are not happening, there can be confusion and inefficiency in the
operation. As a business grows, and more people are involved, it becomes
necessary to have meetings to discuss the management plan for the day or week
to determine who will do what.
Few people may truly enjoy having or running these meetings, but the
consequences of not having management and operational discussions are often
very painful in the short run and create a culture of chaos and reaction in the
The other category for discussion in the family business is ownership. This
includes talks about debt levels, land or equipment purchases, and the
financial return on your investment. You might discuss your entity's bylaws or
operating agreements. This category involves discussions about who the future
partners (owners) of the business will be, how people enter and exit ownership,
and what the estate plan looks like.
Often, younger family members become frustrated because the senior
generation will not talk about ownership and its many facets.
In fact, in the ownership arena, silence breeds uncertainty, and uncertainty
leads to family-business tension and conflict. If you don't discuss significant
capital decisions, partnership ground rules and anticipated transfers of land
or other assets, people are left to assume what will happen. Those assumptions,
in turn, form the basis of (often difficult) actions by your family members and
their spouses. The consequences of not talking about ownership issues results
in long-term relationship strain in the family business.
As the consequences of poor communication become clear, one strategy is to
ask or encourage a family member to assume the role of communications champion.
Someone becomes a "facilitator" of important family-business discussions. The
word "facilitate" means to "make an action or process easier," and in this
case, we are trying to "make easier" the conversations about operations and
The facilitator role can be filled by different people; that person doesn't
need to be the operational leader or have all the answers. He or she just needs
to be granted the authority to encourage discussions. The role can be filled by
members of either the senior or junior generations, and can even be rotated
among family members. Consider appointing a communications champion this year
to achieve your goal of making the family business better.
Write Lance Woodbury at Family Business Matters, 2204 Lakeshore Dr., Suite
415, Birmingham, AL 35209, or email firstname.lastname@example.org.
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