Deciding who will take over the farm is often a difficult task. There are some tricky emotional dynamics involved. Owners worry about how the operation will do without them at the helm, whether the next generation will be interested in farming and taking over the farm, the happiness of family members not chosen as successors, and rifts that might pop up because of their decisions.

Your best bet is to make thoughtful, smart decisions that are best for the business and communicating often with those involved (farming and non-farming family members).

Categories of Successors

Owner's children
Other family members like nieces and nephews
Non-family members like key employees
Non-family members not currently associated with the farm

Objectivity is critical when choosing a successor.

It’s sometimes difficult to be objective where family is concerned. Owners might want to transfer the farm to one or more of their own children. But sometimes that isn’t the right choice. Maybe a niece or nephew is a better fit for the role, or a long-time employee. Then there’s always the challenge of breaking the news to the other family members that they are not being considered for succession.

When you’re choosing a successor, be as objective as possible.

Next Step

If you already know who our successor is going to be continue on to the section Making the Final Choice of a Successor(s).

Who Should Choose

Owner(s) alone
Family
Formal committee - of family and non-family professionals

Objectivity is key to effective succession planning. Try to maximize the objectivity of the process as much as you can by getting some help with choosing potential successor(s).

You might consider involving a family panel made up of members who know how to keep their biases out of decision-making, know all the potential successors involved and the future needs of the farm.

Or you might consider enlisting a trusted colleague, fellow business owner or consultant, who won’t have the same biases as you do.

Even if you choose the successor(s) alone, you should use an objective process that everyone involved will feel good about. Think of it like a job interview. Being part of the family is no guarantee that there is a place on the farm. Potential successors must bring value to the farm that will keep it flourishing.

Assignment

Determine who will help you choose your successor(s) and record your thoughts in your Workbook.

What to take into account when choosing successors

Level of interest
Level and type of skills, expertise and experience
Management and leadership potential

An objective selection process is going to ensure the farm has the best chance of flourishing in the future.

Methods of choosing a successor

There are many ways to choose a successor, including:

Gut instinct
Consensus of majority support
Formal evaluations

There’s something to be said for gut instinct and research shows it’s an important part of effective business decision-making. It allows you to take into account a lot of things that are difficult to measure like personality type and personal interactions. But it isn’t perfect – gut instinct can be overly biased by emotions or bad experiences.

Consensus or majority support involves other people who you trust to help make the decision. Maybe you’ll choose the successor(s) everyone can agree on, but research shows that consensus may not yield the best decision – it often simply yields the decision everyone can live with. Majority support is a better option, but it can involve emotions from differences of opinion as well.

Choose consensus or majority support if you want to involve some family members or trusted advisors/colleagues. This is also a good choice if you want to add some objectivity to your decision for the sake of family peace.

Formal evaluations involve things like interviews and competency assessments. They have the downside of seeming overly formal for a family business. But, it’s a business at the end of the day. Since choosing your successor(s) impacts so many people, it likely should be more formal than day-to-day decision-making. And this method is the most objective among the methods mentioned here.

Formal evaluation is well-suited for situations where there are a two or more potential successors, each strong candidates. This is also a good choice for farm operations that are large and complex, where the successor(s) will fulfill a president and/or CEO role. role.