Farm Succession Planning 2: Best process?

What is the best process to facilitate good farm succession planning?

Mike Krause:
Judy Wilkinson has had 20 years helping farm families with the succession process. She has a great quote from Kenny Rogers' song, The Gambler: "You've got to know when to hold them, know when to fold them, know when to walk away and know when to run. You never count your money when you're sitting at the table, there'll be time enough for counting when the dealing's done." I think there's a lot of wisdom in that quote. Welcome, Judy.
Judy, you've had a lot of experience with a whole raft of families with this succession and transition planning, so that means you've found things that have worked and haven't worked. What have you found has been the most successful process to follow?

Judy Wilkinson:
Thanks, Mike. The process that I found most successful is having a meeting with everybody who is connected or concerned with either the business or the family, mostly around making sure that people are being kept informed and people know what's going on. Now, some people will say, "Oh, perhaps you should interview everybody and then have a meeting." I always go in with as little information as possible and have everybody I can at that meeting who, if we make decisions on the day, are going to be impacted by the decision, so that they can be there and hear the discussion.
Because I think the discussion is sometimes more important than the decision. How we make a decision about something often goes through a couple of cycles of discussion, and by the time you make the decision, a lot of people could think, "That's a stupid thing to do." But if you have been part of the discussion, you know why it's got to that point.

Mike Krause:
Right, you understand the reasons.

Judy Wilkinson:
Yes. Now the reason I go in with very little information is so that I can ask the questions. So I get the information, and everyone can hear the information that's being shared. Whereas if I know a lot, I may not ask a question because I know what the answer is, but that doesn't mean everybody in the room understands.

Mike Krause:
So the wrong thing is to assume something. You don't assume anything, and you put it all on the table and people should listen and hear what others have said.

Judy Wilkinson:
And when you have prior knowledge, you make... you do it because you're human, you make assumptions about things. But if you don't know, then you ask, so that's the bit that I see works well. And then also having everyone there, inclusion is a really important thing.

Mike Krause:
So when you say "everyone", Judy, that's all the kids and their other halves around the table, even though all those kids may not be involved in the farming hand-over, that is, passing the farming on to everyone.

Judy Wilkinson:
Yeah. So this doesn't mean that they have to be at every succession planning meeting, every meeting that you have around this issue. It is just valuable if they can get the information as it gets put on the table in the beginning so they have some idea of what's going on, because they too will make assumptions that this business is worth millions of dollars and everybody should be able to get something out of it where that may not be what's happening. They will have assumed by watching what's going on. So they can be part of that discussion. And I also think that exclusion is an incredibly powerful thing and can send long-lasting negative messages.

Mike Krause:
Messages such as, "Because I haven't been included, I'm not a part of the family process, so I'm on the outer."

Judy Wilkinson:
Yeah. So if you decide not to have them there, they'll think, "Oh, what are they trying to hide? Oh, is there something? Why can't I be part of this?" And often you'll get those partners at meetings and you'll say, "And what are you hoping for out of today?" And they'll say, "Oh, I'm just here to listen." And you think, "That's what they're thinking." And so often they contribute more than if they were just there to listen. But often they're important. They are people who are watching this family function and this business function and they're watching from the balcony so they can see the personalities and they can see the elephants in the room, as we often talk about.

Judy Wilkinson:
They can say, "Why are we doing it like this?" You know, they can raise those questions themselves. So I think it's really important to include them. Like I say, not perhaps in every meeting you have, but certainly at some point, because it just shows that you aren't trying to hide anything and you want to know. And also if you have doubts about in-laws or whatever, it's better to have them on the inside of the corral, not on the outside so you can be working on making sure that the personalities and the conversations are managed on occasions.

Mike Krause:
Do you ever find it hard getting mum and dad talking about this? Or is that not a problem?

Judy Wilkinson:
No, it can be difficult. It can be difficult. So often it's because they feel like they might be under attack or maybe they don't know what they want to do. Maybe they're not ready for it, but often these discussions and these meetings help them get there, so...

Mike Krause:
That's been my experience too, that mum and dad don't really know what the kids are thinking or wanting to do, and they actually get delighted and quite surprised when they hear what their kids' opinions of what should happen. I find that everyone has that fear, but sometimes that fear is false, it's not true.

Judy Wilkinson:
Yeah. I agree. And certainly if you had, you know, in my case, I have a conversation with each person in the room individually and people get to observe that conversation, and people said that it's a really empowering thing to watch. It's a really interesting thing to watch and to hear people have a conversation with somebody and hear things that they maybe wouldn't normally say or what they don't feel confident enough to say, so...
And also, as you'll know yourself, as a facilitator, you're there to encourage people to say what they want and if they get it wrong, like if it comes out wrong, mean or nasty or whatever, you as a facilitator to get the chance to turn it around, to make it sound okay.

Mike Krause:
Yeah, "Let's replay that last little bit. Did you really mean this? Didn't you mean that?"

Judy Wilkinson:
Yes. "I think you mean..." Yes. Yeah. And that's helpful, isn't it? I think.

Mike Krause:
Yeah. That is another thing - do you think it's important to have a lot of minutes or discussions written down, so that there's evidence of what was talked about, particularly the decisions that were made?

Judy Wilkinson:
Yes. Mostly the decisions. I don't think you have to have reams of documentation. It is very helpful to write down the things that we have decided are going to happen, like I usually give an action sheet, of what we've decided and who's going to do it and when it's going to be done by, and perhaps why we're doing it, because we all have very busy lives and we often forget what we've said yes to, or we say yes to it in the meeting and then get outside and say, "What was all that about?", so yes, it has to be, I'd have to say, Mike, it has to be in plain English. Not too complicated.
Not gushy. Just facts. Just stick to the facts in plain English. Yeah. I agree. We're all doing lots and lots of things and it's useful if we've got something to refer back to.

Mike Krause:
And I think that's really wise - five years ago we could have decided this and if it's not written down, then people's minds make up what actually happened and if everyone's agreed to those decisions, it's on paper, then it's sacrosanct. We can move on from that.

Judy Wilkinson:
Yeah. Or we can decide to go back and change it. "This is what we decided." "Oh, well that was because there were more of us or less of us or whatever, but now that we know how to do it, we'll do it again. We'll make another set. We'll do another."

Mike Krause:
Review that, yeah.

Judy Wilkinson:
And I think the practice is a really good thing. I always do one meeting and then another meeting in maybe six or eight months’ time. Sometimes I don't, sometimes I only do the one and send them off to speak to their accountant or their solicitor or whatever. But it's interesting that after having done a couple of meetings with families, I then hear people saying stuff I'd say, you know, like they use my question or my... So that's nice, isn't it? That they think about how they're going to frame their question or how they're going to respond. So that's all good practice, I think.

Mike Krause:
Yes, great practice. Now, Judy, one of the challenges that people have when they come to do this is, "What sort of facilitator should we get? Should that be a male or a female? Should that be a young person, an older person?" What are your thoughts on that?

Judy Wilkinson:
Yeah. I know, it must be a bit of a minefield and really, when you think about it, Mike, there aren't lots and lots of people out there who publicise that they do this and so lots of people try to do it. I know there are rural financial counselors who're all really good and accountants and lawyers and some people who are just close friends or perhaps in a position of power, or from the community background, might do it. And you know, anyone is probably good at it depending on the situation.

Judy Wilkinson:
What I'd say is choose a personality that suits your family. Sometimes you have to give it two goes, because again, I see as a facilitator, I'm not everybody's friend. Like I'll go in and ask questions that people don't want to answer or I'll raise issues that people don't want on the table so, you know, I can probably alienate people quite quickly, but yeah, choose somebody whose personality's inquisitive and not controlling and not wanting to... you know, you're not working for the person's pay as a facilitator, you're working for the good of the family.

Mike Krause:
So you don't want someone dominating and you don't want someone who's saying, "This is the answer. This is the solution." You want to get the solution out of the family so that they own the solution and that then can be put in action.

Judy Wilkinson:
Yeah. Because you sort of don't want... I mean, I'm always mindful of when I go in to do meetings now is how old I am, because I'm the age of most young people's parents or older. So, you know, maybe they want somebody young, so that's fine too. People have prejudices. But I would be looking for a personality that you can trust and who's honest and open and transparent. And I wouldn't say they have to be really well-experienced. You can use people who are just confident enough not to take sides, confident enough to stop conversation when it's...

Mike Krause:
Control conversation and facilitate good listening.

Judy Wilkinson:
Yeah. And so one of the things I noticed years ago when I first started doing it, that some facilitators don't like people crying. So the minute you get someone crying, you would see them... because I shadowed quite a number of people as I was learning, and they would shut the crying down, where I always think a good cry is really good for everyone, so out come the tissues.
And also another thing was when people got angry, they would stop everything and make everybody leave the room. You've got to find somebody who's prepared to sit through discontent and be uncomfortable and be a bit vulnerable with it all.

Mike Krause:
Yeah. And push through it, allow the listening to happen, get the healing started and then let's keep going.

Judy Wilkinson:
I think so. So how you find those people, is ask. Ask around because most of my work comes from recommendations of others and...

Mike Krause:
Exactly. Other people who you've worked with that pass on and say, "Look, give that person a ring."

Judy Wilkinson:
Yeah. And likewise, you'll be the same, I'm sure, because I'm often referring people to you.

Mike Krause:
No, that's right.
Judy, this has been really good information. Thank you so much for this.

Mike Krause:
To sum up this second podcast, the take-home messages are:
Firstly, have all the family involved, so be inclusive. Secondly, keep the discussions open. Thirdly, write down the action notes so they are recorded. Fourthly, revisit the family farm succession plan over time because things do change. And finally, allow emotions to be heard as well.