Honored Advisor
Posts: 8,881
Registered: ‎07-18-2011

Succession planning.

I wrote on this subject several years ago...... a foolish endeavor but I was young in the old guy category at the time. In an entity I advise, the heirs were in good careers outside of farming and we chose to try to attract youthful management to the entity with a share of production ownership. A concept I had failed with at least twice before.
I want to blame myself for poor character assesments and settling when the chosen didn’t materialize. But the lineup of potentials choices was “the usual suspects” and contrary to my expectations, people don’t always rise to Be “equal to the opportunity.

This week, in another enterprise, the heirs are involved in day to day management and the subject of succession planning is scheduled for a new meeting.
One aspect that works this time over that time is stress motivation.
IMO, this subject is best approached in low profit stress times. When assets are not overvalued and not much cash is on the table, expectations and goals become realistic and results have a better chance of success. We need to work on the future most when it looks like there might not be one.
There are some accounting reasons that support this theory. It is much easier to pass potential and future success than yesterday’s success.