Develop ownership criteria before you need them. 

A desire to be part of the farm can quickly slide into an expectation of control. As you look at transitioning leadership and ownership of your farm to the next generation, be ready to tackle entitlement issues.

“If you are experiencing the phenomena of entitlement, you must acknowledge it and develop a plan for how you’re going to deal with it”, says Rena Striegel, President of Transition Point Business Advisors. “The longer you wait, the harder it’s going to be to get rid of it.”

What is entitlement? Essentially, she says, it is either the belief someone has the right to something or it is the belief one is deserving of privileges or special treatment.

It can happen on an individual level where a person believes something has been promised.

It can happen when a parent creates an environment when their children are treated differently than other people in the operation.

“In either case, the outcome can be a really big source of disagreement between spouses and families who might have different philosophies,” Striegel says.

Three Steps To Take

Your goal is to create a framework and tools for these tough conversations, Striegel says, so now one feels singled out or mistreated. First, create a family employment policy. Keep it simple, she advises.

Gather your family and agree on how family members will be hired, compensated, managed, and rewarded in terms of bonuses or other rewards, she says.

“Be sure to emphasize ownership and employment are two different issues – earning a check as an employee is very different than owning a piece of the farm business,” Striegel says.

Next, create ownership criteria. Detail the types of assets that can be owned and when by family members. (see checklist below) Be specific with duties and timelines.

“You want to use official language because this is an official document,” Striegel says.

Finally, make sure you have roles and accountability clearly defined for those involved in the farm. This can come in the form of job descriptions, organizational charts, or other farm structure documents.

Call Out The Spades

As you create these documents and framework, Striegel says you will need to lead your team and focus on the end goal.

“Working through these important issues takes leadership and the ability to call a spade a spade”, she says. “If you see a problem, call it out anad work through it. That’s how you’ll establish healthy boundaries and expectations with your team and with your family”.

Who, How, When and Why – Ownership Assessment Checklist

This checklist from Rena Striegel’s The DIRTT Project can be used as a guide to create ownership criteria for your operation. You can also use the tool to determine where potential owners might need coaching, mentoring, or leadership development. Use the following to help create your requirements. Feel free to add.

Learn more about The DIRTT Project

Article by Sara Schafer, Farm Journal