So often, succession planning focuses on the transfer of land, cattle and other assets. I get it, after all, these assets are critical for an operating business. Yet, how much time is spent thinking about, talking about and preparing the next generation to lead the dairy farm? On some of the most successful dairy farms, quite a bit of time is spent doing this. On struggling farms, often not much time is spent, if any at all.
We need to invest in preparing our next generation of dairy farmers to lead the farm and not leave it to chance. As part of our succession planning process, we call this Ready Next Gen. Ready Next Gen isn't an event; it's a gradual process of learning the role of leadership and earning the right to lead.
Getting the next generation ready to manage and lead your future dairy farm is not much different from hiring a high-level employee. High-level employees such as herd managers, veterinarians, nutritionists, CFOs/controllers, breeding managers, agronomists, etc., seldom come in as new hires fresh out of school, ready for the role. It takes time, experience, feedback and a gradual hand-off of tasks until they are fully autonomous in their role.
Why should we expect anything different for our next generation of farmowners and managers? Sure, these young people are often our children and have grown up around the farm doing the physical work, but doing physical work isn't the same as leading others in their work. Leading others who are older than them and possibly more experienced.
What happens if there isn't enough thought and care put into this process? At a minimum, there is a very real risk of employee turnover in key positions. We see it all the time: 50% or more of long-term employees in key roles leave when the next generation takes over. Some of these employees are older than the next generation, and they are naturally skeptical.
In today's environment, who can afford to lose highly skilled employees? Ideally, these long-term employees will help the next generation succeed, but if they aren't involved in the process, they will often vote with their feet.
Critical skillsets
Let's look at some key areas for the next generation to focus on so they are ready to lead when the time comes.
Future skills
Dairy, agriculture and business in general is constantly evolving. I look back at the skills my grandfather needed to be successful, and they are very different from those that made my father successful. Grandpa knew how to till the land. Dad knew how to crunch numbers late at night. My brother has an accountant to take much of the accounting off his desk. Today, his major skill is managing people.
Take some time to sit down and think about the skills you'll need for your farm of the future. Is it breeding, human resources, CFO skills, agronomy, artificial intelligence (AI) data analysis or something else? Often, the knowledge the next generation will need doesn't currently reside on the farm. That's OK because our industry is awash with educational opportunities, both in a college setting and outside it. There may be another farm they can work at and gain skills. For example, they might need to work for a genetics company or a bank for a few years before coming back.
Once these future skills have been identified, put a plan in place to systematically learn them over several years. We have seen the benefits of the senior generation and the next generation working collaboratively on this planning and education tracking. That way, the senior generation will have the assurance that the investment in time and money is paying off, and they will have confidence in the future when it's time to step back.
Get comfortable being uncomfortable
I often see two common traits in those who lead and build long-lasting legacies around successful businesses. They have drive and gumption. Leaders do things other people will not do. Dairy isn't easy, and our next generation needs to build that inner drive to work through tough issues. This isn't just putting in long hours; it is more than that. It is about getting comfortable with being uncomfortable in the short term. Not thrilled with giving a safety presentation or pep talk to the employees? Do it anyway. Unsure of how to do a task? Get good at asking questions until you find an answer. Would you rather be feeding cattle than at a keyboard drafting an email to a banker? Someday you'll need to do it. Might as well start now.
Over time, things that may stress the next generation will become easier and maybe even enjoyable. Someone has to do these tasks, so they might as well start getting into practice. I remember a conversation with one of my clients who raises beef cattle. I figured he was always a cattle guy, but he said early on he hated cattle, and since he was a younger son, that was all that was left for him to do. Now he thinks of nothing but cattle from dawn to dusk.
Leadership abilities
We hear a lot about leading the dairy industry and becoming advocates, but what about leadership on dairies? What about being ready to lead employees but also family members? What about being able to keep the peace, make money and hold people accountable for results? What about leading people who might be older than the individual?
Long-term, no one can force another person to follow; it is voluntary. Voluntary for our family members and voluntary for our employees. We believe that leaders are not born; they are built.
There isn't a personality style, experience level or communication style that makes one person a leader more than others. However, people will follow leaders who build skills in the following areas.
- Model behaviors. Another way to say this is "walk the walk" or set the example you want in others. This is not only in work but also how we interact with others. We expect our employees to show up, work hard, be team players, communicate well, manage their tempers, etc. We need to expect this and more of the next generation as well.
- Inspire the team. This doesn't mean a rah-rah speech from the top of the barn, but it's the ability to galvanize the team around clear goals. Before any inspiration, make sure the goals are clear to all.
- Improve the process. Always be looking for better ways to do the work, making it more enjoyable and efficient. This is the opposite of "This is how we have always done it."
- Build others. This is the opposite of "I will do it myself because no one can do it as good as I can." Instead, build the skills and abilities of people around you. Someday you will need to delegate tasks, take the work and stress off your shoulders, and have the team's abilities progress along with yours. Build others before you look to scale up. In other words, invest in your teams' abilities before you invest in more cows. The cows will do better, and you'll probably be money ahead.
- Connect with people. We all say we couldn't run the dairy without family and employees, but how do we show it? The final Ready Next Gen ability is the ability to show appreciation. And ask forgiveness when it's necessary. Showing appreciation comes in many forms, but building this skill will go a long way in their leadership when the going gets tough.
Every generation will either lose a farm legacy or strengthen it. There often isn’t a middle ground. When we think of dairy legacies, we think of cattle and barns, but really, we admire dairy families. Every family will have a next generation, and we owe it to them to put them on the best possible footing. It's their future but your legacy. Ready or not, here they come.
