The International Farm Transfers Study wanted to look at the process of the transfer of skills and knowledge to the next generation. When I work with younger farmers, they are keenly aware that some decisions Dad is not letting go of very easily. So I offer this worksheet from Dr. John Baker’s work at the University of Iowa Beginning Farmers Club: Distributions of Managerial Tasks on the Farm: Founder and Successor evaluation.
Identify on a scale of 1 to 5 who has the ultimate decision. A response of 1 means that the operator (founder) had retained power over that task or skill, and five means the successor had complete control over that aspect of the farming operation. Use this worksheet on your farm to get a picture of the way decisions are made in your business. The list of tasks also serves as a great learning plan to identify the tasks that you might want to teach or mentor the next generation. Daughters in law who are not used to farm life might also find this list helpful in understanding the complex decision making that needs to be done by the farm team. Perhaps there are some skills she brings to the farm team that are being overlooked.
|DECISION/ACTION TAKEN BY|
|Operator alone||Shared between operator and successor||Successor alone|
|Plan day to day work|
|Make annual crop/livestock plans|
|Decide the mix and type of enterprise in the long run|
|Decide the level of inputs to use|
|Decide the timing of operations|
|Decide when to sell crop/livestock|
|Negotiate sales of crops/livestock|
|Decide when to pay bills|
|Decide type and make of machinery and equipment|
|Negotiate purchase of machinery and equipment|
|Decide when to hire more help|
|Recruit and select employees|
|Decide amount and quality of work|
|Decide work method/way jobs are done|
|Decide and plan capital projects|
|Identify sources and negotiate loans and financing|
|Keeping farm records|
Next month I’ll be doing a webinar on behalf of the Farm Leadership Council’s Advanced Producer network (see www.ourflc.com) to talk about farm decision making.
Making decisions can be a simple process when you understand the basic structure of decision-making.
- Identify the problem or issue that needs to be solved.
- Gather all the possible options and resources for a solution.
- Choose a course of action and resource to solve the problem.
- Act …focus and execute that option to resolve the issue.
- Evaluate…was this a good choice, or what would we do differently next time?
Okay, I know that those 5 steps are overly simplistic, but that’s what’s wired in my brain that works for me from my Management 101 courses at university. It is also basically the process we use in mediation.
Folks on the farm have time to ponder during the winter months to solve the issue and problems of managing their profitable businesses.
I encourage you to print off the spreadsheet in this article and have everyone evaluate what decisions they are in charge of, and which decision making areas they would like to gain more expertise with.
It’s a very sad day when I discover in a coaching scenario that a young farm team member has been involved as labour for over a decade, and yet never has seen the financial statements of the operation.
You don’t jump from being the hired man to “partner” with no clue about the balance sheet.
Time races on. It is time to focus on the business, not just be busy “in the business”.
If your relationship to your spouse is strained due to the stress of the overwhelm of decisions that you know need to be addressed, perhaps this list will help you focus your talks with your spouse, so that you de-stress the tension and attack the issues together.
Beware that avoiding making decisions is really a decision. “Not making decisions is in fact a decision of denial.”
In Baker’s study, the areas most likely controlled by the successor included:
livestock management, recruiting and selecting employees, and keeping farm records. The tasks most shared evenly were: deciding work method, decide timing of operations, and making annual plans. The greatest control of the operator or founder was in the areas of identifying sources and negotiating loans, and determining when to pay bills. This is a cash flow money issue. Fights about Dad being too tight with the cash or not paying enough wages are based on who is the ultimate decision maker in this area. It gets really interesting when grandpa is still calling the shots, the successor is 50 something, and the next generation grandson is also wanting to learn how to make decisions to gain management skill.
Call me at 1-866-848-8311 or email firstname.lastname@example.org to share your decision making tips that work well in your operation.
Remember, it’s your farm, your family, your choice. Work on making great choices.