The Generation Shift of Leadership and Management in a Family Farm Business
Frank Wiebe, Partner, BDO Dunwoody LLP
Manitoba Farmer's Voice
Fall 2009
In most family farms, the parents are the leaders of the organization and the children take a management position, as they are required. This quite often means that people get the management positions based on age and time of involvement with the farm. Consequently, an individual’s age and not the assessment of his/her skills or talents have created many management positions when the parents relinquish their leadership of the family farm. As such, there is not always a successful management tract. A specific process of filling management and leadership positions, listed in the following potential steps, would result in a better management team and a more profitable family farm.
Step 1: Create a flow chart, which shows the present organizational structure. The key management positions would be identified with respect to who are the managers, what are the job descriptions, what are the reporting requirements and to whom reports are made.
Step 2: Review the present organizational structure and determine if changes should be made for the future. If changes are made, they should be identified and documented with a job description and all reporting requirements.
Step 3: Draft an ad for all of the management positions, which would be placed in the local newspaper if you were to hire an employee. The ad would identify the skills, experience, education and characteristics that an individual would need to qualify for an interview. This would result in a leadership profile to be used for selection process for each position.
Step 4: Use this leadership profile to select a list of potential candidates for the key management positions from either family members or other employees in the organization. This task is difficult since it requires an objective assessment and a process in which family members are discussed at a sensitive level. Quite often people are not totally honest because they do not want to hurt someone’s feelings.
Step 5: Review an individual’s abilities for the job and identify areas where more experience and education are required.
Step 6: Pursue hiring people from outside of the organization if the skill set for the position is not available within the family or other people working on the farm.
Step 7: Create a development plan for each of the management positions. This plan would identify all the areas that require attention and development. Time lines and reporting requirements need to be defined in the plan.
Step 8: Identify mentors and coaches for the positions. These individuals need the skill set to train the individual and report back to management on the progress of the individual.
Step 9: Formalize job evaluations with specific timelines for reporting. These evaluations provide the manager’s guidance on progress and areas in which improvements need to be made.
Step 10: Have a formal procedure to announce the attaining of the management position.
Following these steps will formalize the process of becoming a manager and leader. More importantly, family relationships will be strengthened rather than possibly destroyed, which can occur when sensitive issues are not properly addressed. The process ensures that every family member has participated in the selection in an objective manner. The ultimate goal is to ensure that all family members are welcomed at the dinner table. Another advantage of this process is that, as the job descriptions and responsibilities are defined for each management position, compensation will be more easily defined.
Frank Wiebe, Chartered Accountant, has a large farm clientele and has helped many farm families achieve their optimum succession. Frank is located in BDO’s Winkler office, but travels throughout the province to meet and work with clients. He can be reached by telephone at (204) 325-4787or by emailing fwiebe@bdo.ca.
This material is general in nature and should not be relied upon to replace the requirement for specific professional advice.
