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Working with change, instead of fearing it

Non-farm family businesses are in the throes of succession planning too. With the help of Chris Clarke, here’s how they’re elevating their team skills for superior succession planning — and why it’s driving their business performance as well

“The formality of it encourages every member at the table to feel equally respected,” Chris Clarke emphasizes.

By now, every farmer has encountered more than a few articles on succession planning, and maybe the thought of even one more doesn’t seem all that appealing. Indeed, you’ve probably read the first few paragraphs of quite a few of these stories and paused, wondering if you’ll learn anything new.

Well, this article is a little different.

That is, there’s a good chance you’ll feel fired up by the philosophies and suggested practices presented by Chris Clarke — and in the process, you’ll come to appreciate the “torch” of your family farm business in new ways, to the benefit of it and your family for generations to come.

Clarke is an author and chartered professional accountant who holds many other qualifications earned during her 30 years as CEO and co-owner of First Affiliated Holdings, a family business in Collingwood, Ont. Her ideas are organized into a specific technique she calls the “Family Treasury Process” that helps families improve succession planning and the management of the family business/finances by first strengthening individual capacities and family relationships.

In short, Clarke wants you to learn how, individually and collectively, to get inspired about your future, and how you can share that excitement in a way that fits with your business personality. Done well, this will continue to light the way for a family legacy of success, at the group and individual level, that would never have been achieved without it.

So, if your family has started on succession discussions and it’s going well, or it’s not going well, or you haven’t really started yet, or you just want to improve the management of your farm business, read on.

The basics

One of Clarke’s main ideas is that stronger, more united and more successful families — financially and otherwise — are created by every member developing stronger self-awareness and emotional maturity, as well as skills in communication (team building and conflict resolution).

The more all this is developed, the higher will be everyone’s success and life satisfaction, the better will be family business decisions (in this case, the family farm business), and the better a family can leverage its true “wealth.”

These concepts are explained in detail in Clarke’s book (see ‘For more’ at bottom), but let’s go through the basics of the process. Off the top, we must assume:

  • You and your family members are ready to start the process of improving self-awareness, maturity, communication and more, because of the benefits this will provide.
  • You all understand this is a long-term process, involving regular family roundtable meetings.
  • You are all ready to do your part to build the family as a team.
  • You understand this process will not be easy.

The first step is to find a facilitator. “They create a safer space because their presence alone promotes civility,” says Clarke. “But more importantly, a good facilitator will teach you team-building and communication skills through various group and individual exercises, tools and coaching.”

One source of facilitators that farmers may not typically check is the national pool of “Family Enterprise Advisors” offered through an organization based in Oakville, Ont., called Family Enterprise Exchange.

Clarke herself has developed a suite of practices for building self-awareness and communication skills that facilitators can use, including meditative (mindfulness) practices. If you get squeamish at the idea, think instead of the benefits.

Doing these practices puts people in a space of responsiveness instead of reactivity, which is critical for good communication. Individuals need to focus on compassion and calm, Clarke explains. Control of yourself, she says, is key to being able to absorb others’ ideas and to effectively express your own.

The roundtable concept

Learning about these concepts and putting them into practice will begin at the first formal family gathering/meeting that Clarke calls the roundtable. For that first meeting, choose a neutral place and a neutral theme, include young adult family members, and find ways to make the overall experience enjoyable for all.

“It should be held away from everyone’s homes,” Clarke notes. “The formality of it encourages every member at the table to feel equally respected regardless of age or family position. But it also has to be fun. I recommend combining the meeting with a family celebration or even a short getaway where everyone can enjoy themselves.”

Crucially, at the inaugural meetings that she facilitates, Clarke makes a point of describing the “Family Treasury Process” to the family in order to build “buy-in” for future meetings.

As more meetings are held and everyone’s maturity and communication skills grow (and your family’s rate of progress will depend on how often you have meetings), your family will begin the Family Treasury Process. This will create a culture founded in a unified vision that supports all family members to thrive.

Specifically, the process first involves the creation of a collective mission. In a farming family, the mission might include stewardship for the land, community service and ensuring all family members are educated to the level they desire.

After that comes the creation of a family charter, a governance model for the family business. “Along with other aspects, each family member identifies as wanting or not wanting a position in the business, what that position should be at this time, what responsibilities are involved and what the compensation for that should be,” Clarke explains. “It also includes a framework for decision-making that clearly delineates ownership from employment. A collective responsibility for decision-making develops in that there is a realization that family business decisions impact everyone.”

Sore point solution

A common source of conflict in farming families (and actually, in any family with a business) is the generational struggle for operational power, in which the younger generation wants to make changes, often involving technology, while the older generation resists.

Clarke explains that an important part of the Family Treasury Process is the empowerment of younger family members to take measured risks while at the same time assets are protected. “Slowly, the older generation will allow the next generation to take over, but along with other factors, the older generation needs to feel financially secure now and for the future,” she says.

“Maybe it’s a buyout or guaranteed income that has to be agreed on. There is a lot more willingness to let the younger generation try new things if the older generation is financially secure. You’ll be digging into your family farm finances and creating a strategic financial plan, along with your strategic business plan, as part of the Family Treasury Process, and the possibilities for financial security of the older generation can then be explored.”

Some parts of the process are not easy, and that’s precisely why the roundtable meetings are so necessary. “These conversations need to be had, and a facilitator is very important,” Clarke says. “And start now. The sooner the skills and mindset can be developed, the better. You are really working to ingrain them in the next generation.”

Although it can be difficult, she believes the process is very rewarding. Through your hard work, your family will be united, mature and strong, and as Clarke says, the best decisions — financially and otherwise — “are made by this sort of family.”

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