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Family Business Matters       10/22 12:02

   The Founder's Paradox

   Are the goals of business continuity and family harmony mutually exclusive?

By Lance Woodbury
DTN Farm Business Adviser

   Many family-farm and ranch owners define one aspect of success as the 
transition of the land and operating business to the next generation. "The 
opportunity for my kids and grandkids to come back to the farm" is a frequent 
refrain when I ask about the hopes and goals of the senior generation. 

   Another goal often mentioned immediately thereafter is for the next 
generation to "get along" and "work together." I often ask which goal is most 
important: "If you had to pick, would you rather see the business intact but 
experience family discord, or see the land and business sold in hopes that 
family members have better relationships?" In my experience, most say they want 
the relationships but often end up with a business or family full of conflict.

   Neither option offers a guaranteed outcome. Passing the business to children 
does not guarantee they will be successful operators just as selling the land 
and giving them cash does not guarantee they will enjoy spending time together. 
But, neither are the two goals mutually exclusive; some families achieve both. 
In many cases, it is difficult to achieve the twin goals of business succession 
and great sibling or parent-child relationships. Why? 

   NATURAL DIFFERENCES

   As much as family members share DNA, a similar upbringing or common family 
values, individuals in a family can be remarkably different. Personalities, 
conflict styles, political views, cognitive skills, goals, financial skills, 
communication preferences, egos -- all of the differences cause some to wonder 
if they really grew up in the same household. When you place those differences 
in close proximity (working together in the family business), there is bound to 
be friction. Even when family members don't work together, the differences can 
distract from efforts to build relationships. 

   DIFFERENT EXPECTATIONS

   Transitioning a business or passing land down involves the movement of 
wealth, often in the form of gifts, to the next generation. Those receiving the 
gifts, however, are in different life circumstances. Some may be working in the 
business or farming the land, while some may instead have a spouse working in 
the business. Others may have nothing at all to do with the business. Parents 
often struggle with whether a gift of wealth in the form of land or business 
ownership should be predicated on whether family members or spouses are 
involved in the business. And, indecision, hesitancy or unwillingness to talk 
about that issue can create misunderstandings. Parents often add to the 
confusion by publicly wrestling with what is "fair" or how to treat everyone 
equally. 

   POOR COMMUNICATION

   Most family businesses I know feel communication as a family and business 
could be better. Particularly when there is conflict, many family members 
either blow up at one other or avoid confrontation at all costs. Many also tend 
to take those closest to them -- siblings and parents -- for granted, assuming 
"they should know" how they feel and think, or how they will decide important 
issues. The result is that they either don't say what they are thinking, or 
they say it in a rude and disrespectful manner.

   Regardless of why it happens, the unfortunate result of poor communication, 
different expectations and natural differences is that assumptions flourish 
about wealth, inheritance and behavioral norms. The collision of these 
assumptions about how the future should unfold or how people should behave are 
obstacles to getting along. 

   But, it doesn't have to be this way. Regardless of whether family members 
are in business together, don't operate a business but own land together or 
simply rent land to a family member, accepting others' differences, clarifying 
everyone's expectations and keeping the lines of communication open are the key 
ingredients to achieving the senior generation's goals.

   **

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


(AG)

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