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Family Business Matters 09/14 06:18


Family Business Matters 09/14 06:18

Successfully Navigating Transitions

While we often talk about transitions in the context of succession planning
and retirement, there are other transitions that can happen on family farms and
ranches.

By Lance Woodbury
DTN Farm Business Adviser

While preparing for a recent talk on change management, I read William
Bridges' "Managing Transitions," a helpful book containing both conceptual
models and practical strategies for thinking about family and business
transitions. While we often talk about transitions in the context of succession
planning and retirement, I see several other transitions in family farms and
ranches to which Bridges' ideas apply:

-- The transition in ownership from a couple (parents) to a group
(children/siblings);

-- The transition from a small business to a more professional organization;

-- The transition from doing the physical work to managing people;

-- The transition from a simple entity structure to a more complex system to
manage risk, farm programs, expand partnerships or mitigate income or estate
taxes;

-- The transition to more acres, more business diversity or different
farming practices.

TRANSITION'S THREE PHASES

In any significant change, Bridges suggests we go through three
psychological phases: letting go, the neutral zone and new beginnings.

Letting go involves the realization that the way you have done things in the
past will not work for the future and includes the physical act of stopping
specific behaviors or tasks. In the case of a retiring family member, examples
might include letting go of being the primary relationship with a landowner or
vendor, or letting go of daily decisions and supervision.

The neutral zone is that unsettled place after you have chosen to let go,
but you are not yet fully comfortable with the way things will be. You might
second-guess your decision, wondering if you did the right thing. You could
apply this "neutral zone" to the adoption of cover crops or new tillage
practices, the use of a new bookkeeping system or the switch to a new CPA or
marketing adviser. Those changes involve moving to something new, but it takes
awhile to become clear about how the change will fully play out.

The new beginnings phase might apply to a member of the next generation --
or even a new, non-family employee -- becoming fully integrated in the
business, or to your efforts to hold weekly management meetings or to develop
new family communication patterns. You can see people beginning to increase
their contributions or hitting their strides in their new roles.

PRACTICAL TIPS

To make any transition go better, Bridges suggests three useful guidelines.
First, recognize the consequences of putting off a decision when the time is
ripe for a transition. Many families have told me, sometimes too late, they
should have started the communication and transition process much earlier. Not
making a transition when the time is ripe slows your progress in the future.

Second, help people in your family and business see why you need to make the
change. Bridges calls this "selling the problem." Too often, we become focused
on making a change when not everyone understands why a different approach is
needed.

Finally, make sure your communication process includes Bridges' "Four Ps":
Communicate the "purpose" for the transition or change, the "picture," or the
intended goal or outcome of the change, the "plan" for how the transition will
work and each person's "part," or role, in the transition.

Bridges doesn't promise that transition will be less difficult from a
psychological perspective, but he offers a kind of compass by which to navigate
the path of change. If you understand the phases of transitions, if you help
people see the need for change, the importance of timing and the consequences
of your current actions, and if you communicate regularly about key issues,
your family and business will be better at navigating transitions.

**

Editor's Note: Write Lance Woodbury at Family Business Matters, 2204
Lakeshore Dr., Suite 415, Birmingham, AL 35209, or email lance@agprogress.com.


(AG/)

Copyright 2018 DTN/The Progressive Farmer. All rights reserved.


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