Conflict is present in almost every aspect of our lives: personal, business, family, community; the list goes on and on. Inherently, conflict is not good or bad. Conflict can be the fuel for change, a learning or leadership opportunity, or can bring issues that were otherwise ignored to light. Conflict only becomes unhealthy when it prohibits progress or when it damages relationships. In succession, the fear of conflict or conflict itself can hinder progress in the process and damage relationships.
Why is there so much conflict in succession? There are several reasons why there is so much conflict in succession.
- Large amounts of assets: First and foremost, the large amounts of assets that are often associated with farms make it difficult to purchase, distribute, and plan for where those assets should go (more money, more problems).
- Not always a fair/equitable/equal way to distribute: To build off of #1 in our list, there is often a “fair versus equal” issue when handling assets. Off-farm or on-farm heirs/successors may be treated differently in succession (sometimes rightly so). However, this can cause friction when siblings and family members perceive that they are not receiving their fair share or someone is “getting more than me”. Both personal and farm assets can be considered in distribution to the next generation.
- Mixing business and family: Whenever there are decisions to be made between the family and the business, issues are automatically more complex. Business and family entities compete for time, money, and other resources. The same applies in succession. Family relationships, as well as the upbringing of different family units, can play a role in how “fair’ people feel the succession plan is. Oftentimes, the fear of damaging relationships in the family will stall succession in the business.
- Communicating across generations: Generational differences, especially in farm and family businesses, can lead to miscommunication and misunderstanding. There can be many generations working together in farm and family businesses; sometimes as many as 3-4! Each of those generations has preferred methods of communication, expectations for length of work days (along with number of work days), and how to do the tasks required for day-to-day management and operations. Differences in technological comfort between generations can also cause conflicts.
- Family legacy: Family legacy means so much to members of the family, especially on farms. This legacy is often tied to a physical place on family farms. The thought of breaking land into separate parcels, diving property and machinery, and potentially severing business operations can also cause hard feelings among family members of a farm. Because of these family ties to the business, emotions can run high, and conflict can be created.
- Different values and conflict-handling styles: Just like members of a family can clash because of different values, personalities, and conflict-handling styles, the same can happen in succession and the farm business. If someone in the family is an “avoider” in terms of conflict, then succession discussion may not occur. Also, personalities can cause disruptions in communication (both in receiving and sending a message).
- Ambiguity in the succession plan: When ambiguity is present in the succession plan, conflict is likely to occur. Relieving ambiguity in terms of timeline, who will control what, and the plan in general can allow the succession plan to move forward. When succession plans are stalled, then resentment and conflict are likely to ensue because people are unsure of what to expect.
A local study by Wiatt, Marshall, and Langemeier (2023) found that roughly 78% of farm owners who inherited the business from a family member found the transfer to be successful (Figure 1). This is a shockingly low percentage, considering these farm owners now own the farm business. Roughly 20% of respondents found the transfer unsuccessful, and roughly 3% found the process neither successful nor unsuccessful. The most cited reason for feeling unsuccessful was that the succession process was not what farm owners expected.
Figure 1. A local study by Wiatt, Marshall and Langemeier (2023) found that roughly 78% of farm owners who inherited the business from a family member found the transfer to be successful.
Ultimately, successful farm businesses foster a culture where:
- People in the family (and/or business) can turn to each other for help,
- People in the family (and/or business) feel that others accept and support their ideas or thoughts,
- People in the family (and/or business) are satisfied in the way that others in their family share time together, and
- People in the family (and/or business) are satisfied with the outcome when a decision must be made in favor of what is best for the family versus the business.
To avoid conflict in the succession process, emphasis should be placed on open and honest communication between all involved parties. Furthermore, early planning and frequent communication can ensure that the succession plan is in place long before it is needed.
Sources
Wiatt, R. and Marshall, M.I. (2021). The FB-BRAG: A Functioning Assessment for Family Businesses. https://edustore.purdue.edu/item.asp?Item_Number=EC-813-W
Wiatt, R., Marshall, M.I., and Langemeier, M. (2023). North Central Region Farm Succession Survey.