August 9, 2024 • 17 mins
Is your farm business prepared for the future? Maria Marshall and Renee Wiatt join host Brady Brewer in this episode to discuss how the many generations of family engaged in a family business interact with one another. One of the challenges in a family business is understanding the differences in generational perspectives on the business and possible succession. This episode reviews results from a recent survey conducted across the Midwest which examines generational differences within farm families seeking to transition their businesses to the next generation. Tune in to gain insights and practical advice to help ensure a successful transfer of your farm to the next generation. This is the second episode in a series focused on succession preparedness.
Podcast provided by Purdue University's Center for Commercial Agriculture with guests from the Purdue Institute for Family Business and the North Central Regional Center for Rural Development. Slides and the transcript from the discussion can be found at https://purdue.ag/agcast171.
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Episode Transcript
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Brady Brewer (00:05):
Welcome to the Purdue Commercial AgCast,
the Purdue UniversityCenter for Commercial
Agriculture's podcastfeaturing farm management
news and information.
I'm your host, Brady Brewer,and I am a faculty member
here in the Departmentof Agricultural Economics
at Purdue University.
Joining me today is Dr.
Maria Marshall, Professor ofAgricultural Economics here
(00:26):
at Purdue and the Directorof the Purdue Institute
for Family Business andthe North Central Regional
Center for Rural Development.
Also joining me today isRenee Wiatt, who is a Family
Business Management Specialisthere in the Department of
Agricultural Economics andis also affiliated with the
Purdue Institute for FamilyBusiness and the North
Central Regional Centerfor Rural Development.
(00:48):
On today's episode, wewill be discussing farmer
retirement and preparedness.
Specifically, we're goingto be discussing a survey
that Renee and Mariadid that was conducted
on the topic of successionvalues in family members.
But before we get into that,I just want to remind all
the listeners, that you canfind more farm management
(01:09):
news and information atthe Center for Commercial
Agriculture's website atpurdue.edu/commercialag.
Or you can find us onTwitter with the handle
@PUCommercialAg and youcan find all the materials
that we are referencingin today's podcast at the
Purdue Institute for FamilyBusinesses website, which can
(01:31):
be found at purdue.ag/fambiz.
And that's F A M B I Z.
So Maria and Renee, welcome.
I want to turn first toMaria and I know we've done
several episodes on this now,we've done a whole series on
farm transitions and smallbusiness transitions from
one generation to the next.
(01:52):
So if you're interestedin that, please
go check that out.
We also recently have anotherpodcast thinking about
farmer preparedness, but Iwant to just revisit this.
Why is it important tokeep studying and getting
new materials on farmersuccession and preparedness?
Maria Marshall (02:08):
Well, passing on the family
business is important.
And farmers are no differentfrom any other family or small
business, not that farmersmay be small businesses, but
you know, family businessesor farm family businesses
are 98 percent of all farms.
If you think about thesilver tsunami of the baby
boomers uh,, they own 2.
3 million businesses.
(02:31):
So beyond farming, if you'rethinking of your rural
small business, your cafe,your diner, that may be a
linchpin to your communitythat's owned by baby boomers.
They also need to thinkof successors as well.
And farmers and familybusinesses are no
different in terms of that.
And so it's important to studybecause they are, it's an
(02:51):
important generational changethat is about to hit us in
the next five to ten years.
Brady Brewer (02:57):
Yes, and you called that
the Silver Tsunami.
I don't think I'veheard that before.
So Renee, you did thisstudy on farmer preparedness.
Tell us a little bit aboutwhat this study was, who you
surveyed, and what it covered.
Renee Wiatt (03:08):
Sure.
This is basically phase twoof a bigger study that we did.
So first we did an onlinesurvey just to see what
succession looked likein different farms in
the north central region.
And then we tookit a step further.
So this is called Q methods.
Basically what we're tryingto ask farmers to do is
take these 29 statementsthat we have in relation to
(03:29):
succession and rank them.
From most what they agreeto least what they agree.
So we had a velcro boardbasically with these laminated
stickies that they couldrank these statements and
tell us what they valueand what they don't value
in the succession process.
And so in order to qualify forthe survey we had to make sure
that they were in Indiana.
(03:49):
They had two generationsworking in the farm and
that we could survey twogenerations at the same time.
We wanted them to completethe survey so we can compare.
We wanted to see what theyvalue and what it looks like.
Brady Brewer (04:01):
Yeah, so you surveyed different generations
of this transition.
process.
What were the, what are thethree categories that people
fall into in this study?
Renee Wiatt (04:10):
Sure.
So if you last listened topast episodes, you've probably
heard us say incumbent.
So that's the seniorgeneration, the owning
generation who's making mostof the decisions on the farm.
We have the sandwichgeneration, that's kind
of stuck in between thesuccessor and the incumbent.
They act more like asuccessor, but they can
be more of the age of anincumbent, so they're kind
of stuck in the middle there.
(04:31):
And then we have thesuccessors who are the junior
generation in the farm.
Brady Brewer (04:36):
So you have the incumbents, the sandwich
generation, and then thesuccessors that were in
this study, and you askedthem all to rank these 29
statements on how importantthey are in this transition
process to them, right?
So I'm going to go ahead andjump the gun a little bit
and just assume that someof these statements, maybe
the incumbent generation,the generation that owns the
(04:58):
current farm business and thesuccessors, the ones who may
take it over, may not agreeon some of these statements.
Maria, why might we see thesedifferent generations of
people, uh, the incumbentsor the successors or
the sandwich generation?
all want the same goal, right?
To pass on the farm, make itas profitable as possible.
(05:18):
But why might we see somebig differences or not in, in
some of, uh, these statements?
Maria Marshall (05:24):
Well, usually you will see that
the incumbent will be lessapt to take risks, will
be more risk averse, um,versus the successor, which
is thinking more future andmore willing to take risks.
Now you could think aboutlike, the successor might have
less to risk, and the, uh,owner, the incumbent has spent
(05:44):
maybe 20, 30 years buildingsomething, so they're less
apt to be, want to take risks.
Um, so they tend tobe, also the incumbent,
um, more looking towardwhat's worked in the past.
Sometimes we say backwardlooking, not that they're
backward, but more thinkabout this has worked
for us in the past.
And the successor's thinkingabout all the new things
that might affect thebusiness for the future.
(06:06):
So one's more past looking,one's more future looking.
Right, so if you're alreadystarting to think about goals
and objectives and risks andwhere you want to invest,
you have these differentvalues that you're, you're
trying to, to kind of managebetween the two generations.
Brady Brewer (06:23):
Yeah, I think that's a key point here.
Because on the surface,when I was looking, uh, at
some of the results fromthis study, I'm like, well,
maybe we should try to geteveryone on the same page.
And I think that just dueto the different, where
people are, in theirlives and other stuff.
I don't think that's probablya worthy goal to have.
We have to be able towork around some of these
(06:43):
goal differences or valuedifferences, I should
say, between the differentgenerations rather than try
to get everyone on the samepage, because I don't think
that's going to happen.
I don't think it's realistic.
Maria Marshall (06:53):
No, that's, that's correct.
Brady Brewer (06:56):
So Renee, we'll get into some of the
areas here in just a secondof where the two different
generations agreed and wherethey disagree, but I want
to start with where theydid agree that I think is
probably pretty important.
And that's who do, whodo all these generations
want as the successor?
Renee Wiatt (07:12):
Yeah.
So basically allgenerations agree that
they want it in the family.
They want that successorto be a family member.
Um, probably not shockingto anyone listening, but
farms want to keep thebusiness in the family.
Brady Brewer (07:23):
Yeah, it sounds like that's an overarching
goal by everyone involvedin these farm transitions.
They want to keepit in the family.
They want the newgeneration, the heirs.
You made a keydistinction between an
heir and a successor.
They want the heirsto be the successors.
Now, what that looks like, uh,may be a little bit different
and, and how they're involved.
And that's, if you want toget into that, I would advise
(07:44):
people to go listen to someof the other podcasts we've
done on farm transition.
So that may differ a littlebit, but overarching goal,
everyone's surveyed wantsit to keep it in the family.
Renee Wiatt (07:54):
Yeah.
Brady Brewer (07:55):
Okay.
So.
Thinking about some ofthe areas where these
generations, let's startwith the agree, and then
we'll move to the disagree.
So what were some key areashere where all the generations
or at least some of thegenerations, uh, agree, they
want to keep it in the family.
What are some other stuffthat they agreed on?
Renee Wiatt (08:13):
Yeah, so, um, another area where some of
them agreed on were, um, theywere satisfied basically with
the ability of their familymembers to solve conflicts on
the farm when they arrived.
So they think that they'reconflict managers, they can
work through those issues.
So that was somethingthey agreed on.
Brady Brewer (08:29):
Now the skeptical person in me,
uh, says maybe thesepeople haven't gone
through a transition yet.
Um, you know, justbased off some work
that you two have done.
And then also anecdotally,you know, me just talking
with farmers, um, thinkingabout personal experiences,
these conflicts are realconflicts that can drive
wedges between family members.
(08:49):
So I like the fact that.
People are very confidentthat they will overcome
it, uh, but I do, you know,not to be the bearer of bad
news, I am, I am skepticalof the overall optimism that
all parties will be ableto, to, uh, overcome this.
Maria Marshall (09:05):
Well, if you think, you know, conflict
is what drives us forwardand what grows, so we might,
a conflict could be wheredo we go to lunch, right?
So, right, that isan indeed, right?
And we have to compromiseand figure out how to deal
with all these things.
I think it.
There's a degree ofdifferent conflicts that make
things easier and harder.
(09:26):
And so thinking about,you know, and sometimes
anecdotally from whatwe've seen, um, not talking
about it doesn't meanyou don't have conflict.
And sometimes when weask, oh, how often do
you talk about this?
They're like, onlywhen we need to.
Well, that in and of itselfis not resolving the conflict.
So I, I agree with you, butthere are, it's great that
(09:46):
I think they are saying wecan deal with disagreements
and conflicts as they go on,but then there's this level
of emotion, depending on whatit is, that suddenly drives
the succession as somethingthat's just a little bit
harder to, to deal with.
Brady Brewer (10:01):
No, that's excellent.
So I, I think what I'm hearingis, is don't view conflict
maybe as a truly negativeassociation here, right?
Conflict, well, it may not begood, but it's necessary to
maybe get those opinions outthere so you can determine
what is important to peopleand you can work around it.
Maria Marshall (10:19):
Right.
Renee Wiatt (10:20):
Yeah, if you can resolve the conflict,
then you can move forward.
But it's that unresolvedconflict that causes problems.
Brady Brewer (10:27):
I like that.
What else did, uh,uh, the different
generations agree on?
Renee Wiatt (10:33):
Yeah, so successors and incumbents,
um, both agreed that membersof the farm business are
supportive of each otherduring difficult times.
I would assume a lot offarm businesses, you know,
they work together, theyhave family events together,
they're in the same community.
So I would assume thatthey would have some
of these overlappingdifficult times, right?
If something happens in thefamily, they all feel it.
If something happensin the business or the
(10:53):
community, they all feel it.
So it's, It's good toknow that those two
generations feel like theycan be supportive of each
other and work throughthose difficult times.
Brady Brewer (11:00):
Now let's get to the disagreements.
So what were some areas,Renee, that the different
generations, the successors,the incumbents, the
sandwich generation,where did we see some
disagreements in the survey?
Renee Wiatt (11:11):
Yeah, so successors ranked
this statement prettyhigh - maintaining family
relationships is moreimportant than transferring
the business to the nextgeneration, which was
kind of eye opening to me.
They're the ones who wouldmost likely be receiving
that business, right?
Whether they buy it, whetherit's passed down to them.
And it was shockingto me that maintaining
family relationships wasmore important than the
(11:33):
business transferring.
Brady Brewer (11:35):
Yeah.
That's so, so just to clarifythe people receiving that
or could potentially receivethe business are saying, Hey,
it's, it's more importantwe maintain a family rather
than, uh, you know, so it,in the previous episode, we
talked a lot about familygoals versus business goals.
This tells me the successors,the family goals are
more important than thebusiness goals for, for
a lot of the successors.
Renee Wiatt (11:56):
Yeah.
And we have seen that some inthe field, we've seen some,
um, successors who are tryingto enter the family business
and, or, you know, tryingto enter the farm business,
trying to be part of thatmanagement and decision making
part and really when it comesdown to it, they have decided
to exit and get a careerelsewhere to maintain family
(12:16):
harmony and the businessto the next generation.
Even if it doesn'tinclude them.
So we have seenthat in some cases.
Brady Brewer (12:22):
Yeah.
So key distinction there fora lot of successors, family
goals are more importantthan the business goals.
Maria Marshall (12:28):
So we've seen in past research that when
we've asked people that havehad a transition, we've asked
them, so did you think thetransition was successful?
Forty percent said no,and that was because they
weren't speaking to familymembers or they had lost
contact with family membersbecause of the transition.
So maybe we have a generationthat's seen some of these
(12:51):
bad successions and say,I rather, I prefer to have
my brother or sister oryou know cousins then have
a piece of the business.
Renee Wiatt (13:01):
Yeah, and when we redid that that same question
in a recent survey, similarstatistics, so, you know, they
got the business but they didnot feel it was successful,
a successful transfer.
And when we asked why, theybasically said the process
was not at all what theythought, or there were
family relationships thatwere damaged in the process.
Brady Brewer (13:20):
Yeah, so the family relationships here
and the family goals aresuper important in this, so
please do not discount them.
Renee Wiatt (13:26):
Yeah.
Brady Brewer (13:27):
Uh, anything else where the
three generations yousurveyed did not agree?
Renee Wiatt (13:33):
Yeah, so for the sandwich generation,
they were the only generationthat ranked the statement,
um, that the successionprocess has been uncertain
for my farm business.
They were the onlygeneration that chose that,
and I think that speaksto where they are, right?
They're kind of in limbo.
They have this generationahead of them, which
is the incumbent.
You know, they're themain owners, probably
(13:53):
mainly doing most of themanagement decisions.
And then they also havethese successors pushing
behind them, right?
So they're trying to almostpush those incumbents out so
they can finally make thosemanagement decisions, but
they also have to considerthe successors that are
probably about 20 years, onaverage, younger than them.
So they're stuck in thisgap with the people who
are about 20 years ahead ofthem, 20 years behind them.
(14:14):
And they're in the middle.
Brady Brewer (14:15):
Yeah.
Understandably.
That's probably nota good feeling to
be in that position.
Renee Wiatt (14:20):
Right.
I mean, we've talked tosome farmers who are 50
or 60 and they're saying,you know, when am I going
to get to make decisions?
When am I going to getto manage the farm?
You know, when really, inother people's minds, they're
closer to retirement age.
So it's this kind of pull,and they're kind of stuck
in that middle generation.
Maria Marshall (14:35):
So if we wonder why are farmers on
average, you know, 65, um,and still in the stay and
grow stage, if we talk aboutthe quadrant from our last
episode, that would be why alot of sandwich generations.
Brady Brewer (14:48):
Yeah, because they they get a hold of the
farm and they should really bethinking about transitioning
themselves, but but theyjust took over themselves.
Renee Wiatt (14:57):
Right.
And then lastly if we look atincumbents, the one statement
that they ranked No othergeneration ranked was that
they themselves are mentallyprepared to pass the business
to the next generation.
So they may feel they'rementally prepared, but
no other generationsfeel that way.
Brady Brewer (15:16):
So, so the generation that is currently
in charge of the farm businesssays, Hey, I'm ready to do it.
No one agrees.
Renee Wiatt (15:22):
No one agrees.
Brady Brewer (15:24):
Any, any thoughts on or, or reasonings
why they may feel they'reready, but no one else does.
Do you think it's becausethe transition is going
slower than maybe the nextto the sandwich and the,
the successors want it tohappen or why, why this big
disconnect from the incumbentsto the other two generations?
Maria Marshall (15:43):
Yeah.
I mean, I think it goesback to that goal that
everyone agrees on, right.
They want to pass or sell thebusiness or give the business
to the next generationof family successors.
I mean, I think any farmerthat you ask basically
says that's what they want.
And they truly do want that.
They want that generation,that farm to pass on
to the next generation.
Now, mentally letting thatfarm go is a different thing.
(16:04):
So those two, those twostatements could kind of
be mixing up in their mind.
Because they do want it togo to the next generation.
They just can't yet.
Brady Brewer (16:11):
Yeah.
If, if I'm an incumbent,uh, listening to this
particular episode, I,I'm thinking, wait, do my
successors think I'm notmentally ready to do this?
I mean, uh, cause your surveywould say highly likely
that is, that is the case.
Renee Wiatt (16:27):
Mm hmm.
Yeah.
Maria Marshall (16:28):
So we would ask them, do you have a
roadmap to how your successorsare going to take over and
you're going to let go?
I think that goes tothat uncertainty that the
success, that the sandwichgeneration is talking about.
So there might be a lotof, uh, discussion and talk
about the process, but nota lot of actual determining
(16:50):
when things are going tobe transitioning, from
little things to big things.
And I think that leadsto the uncertainty of the
sandwich generation and theyounger generations thinking
you're not ready even thoughyou think you're ready.
Brady Brewer (17:06):
Yeah, so some key differences there between
the different generations.
If you would like to readmore about this study or,
or find other materialsto help your farm business
transition, please go to thePurdue Institute for Family
Businesses website, whichis at purdue.ag/fambiz.
(17:26):
For more farm management newsand information, please go
to the Center for CommercialAgriculture's website at
purdue.edu/commercialag.
On behalf of the Center forCommercial Agriculture, I
would like to thank you forlistening to this episode.
Welcome to the Purdue Commercial AgCast,
the Purdue UniversityCenter for Commercial
Agriculture's podcastfeaturing farm management
news and information.
I'm your host, Brady Brewer,and I am a faculty member
here in the Departmentof Agricultural Economics
at Purdue University.
Joining me today is Dr.
Maria Marshall, Professor ofAgricultural Economics here
(00:26):
at Purdue and the Directorof the Purdue Institute
for Family Business andthe North Central Regional
Center for Rural Development.
Also joining me today isRenee Wiatt, who is a Family
Business Management Specialisthere in the Department of
Agricultural Economics andis also affiliated with the
Purdue Institute for FamilyBusiness and the North
Central Regional Centerfor Rural Development.
(00:48):
On today's episode, wewill be discussing farmer
retirement and preparedness.
Specifically, we're goingto be discussing a survey
that Renee and Mariadid that was conducted
on the topic of successionvalues in family members.
But before we get into that,I just want to remind all
the listeners, that you canfind more farm management
(01:09):
news and information atthe Center for Commercial
Agriculture's website atpurdue.edu/commercialag.
Or you can find us onTwitter with the handle
@PUCommercialAg and youcan find all the materials
that we are referencingin today's podcast at the
Purdue Institute for FamilyBusinesses website, which can
(01:31):
be found at purdue.ag/fambiz.
And that's F A M B I Z.
So Maria and Renee, welcome.
I want to turn first toMaria and I know we've done
several episodes on this now,we've done a whole series on
farm transitions and smallbusiness transitions from
one generation to the next.
(01:52):
So if you're interestedin that, please
go check that out.
We also recently have anotherpodcast thinking about
farmer preparedness, but Iwant to just revisit this.
Why is it important tokeep studying and getting
new materials on farmersuccession and preparedness?
Maria Marshall (02:08):
Well, passing on the family
business is important.
And farmers are no differentfrom any other family or small
business, not that farmersmay be small businesses, but
you know, family businessesor farm family businesses
are 98 percent of all farms.
If you think about thesilver tsunami of the baby
boomers uh,, they own 2.
3 million businesses.
(02:31):
So beyond farming, if you'rethinking of your rural
small business, your cafe,your diner, that may be a
linchpin to your communitythat's owned by baby boomers.
They also need to thinkof successors as well.
And farmers and familybusinesses are no
different in terms of that.
And so it's important to studybecause they are, it's an
(02:51):
important generational changethat is about to hit us in
the next five to ten years.
Brady Brewer (02:57):
Yes, and you called that
the Silver Tsunami.
I don't think I'veheard that before.
So Renee, you did thisstudy on farmer preparedness.
Tell us a little bit aboutwhat this study was, who you
surveyed, and what it covered.
Renee Wiatt (03:08):
Sure.
This is basically phase twoof a bigger study that we did.
So first we did an onlinesurvey just to see what
succession looked likein different farms in
the north central region.
And then we tookit a step further.
So this is called Q methods.
Basically what we're tryingto ask farmers to do is
take these 29 statementsthat we have in relation to
(03:29):
succession and rank them.
From most what they agreeto least what they agree.
So we had a velcro boardbasically with these laminated
stickies that they couldrank these statements and
tell us what they valueand what they don't value
in the succession process.
And so in order to qualify forthe survey we had to make sure
that they were in Indiana.
(03:49):
They had two generationsworking in the farm and
that we could survey twogenerations at the same time.
We wanted them to completethe survey so we can compare.
We wanted to see what theyvalue and what it looks like.
Brady Brewer (04:01):
Yeah, so you surveyed different generations
of this transition.
process.
What were the, what are thethree categories that people
fall into in this study?
Renee Wiatt (04:10):
Sure.
So if you last listened topast episodes, you've probably
heard us say incumbent.
So that's the seniorgeneration, the owning
generation who's making mostof the decisions on the farm.
We have the sandwichgeneration, that's kind
of stuck in between thesuccessor and the incumbent.
They act more like asuccessor, but they can
be more of the age of anincumbent, so they're kind
of stuck in the middle there.
(04:31):
And then we have thesuccessors who are the junior
generation in the farm.
Brady Brewer (04:36):
So you have the incumbents, the sandwich
generation, and then thesuccessors that were in
this study, and you askedthem all to rank these 29
statements on how importantthey are in this transition
process to them, right?
So I'm going to go ahead andjump the gun a little bit
and just assume that someof these statements, maybe
the incumbent generation,the generation that owns the
(04:58):
current farm business and thesuccessors, the ones who may
take it over, may not agreeon some of these statements.
Maria, why might we see thesedifferent generations of
people, uh, the incumbentsor the successors or
the sandwich generation?
all want the same goal, right?
To pass on the farm, make itas profitable as possible.
(05:18):
But why might we see somebig differences or not in, in
some of, uh, these statements?
Maria Marshall (05:24):
Well, usually you will see that
the incumbent will be lessapt to take risks, will
be more risk averse, um,versus the successor, which
is thinking more future andmore willing to take risks.
Now you could think aboutlike, the successor might have
less to risk, and the, uh,owner, the incumbent has spent
(05:44):
maybe 20, 30 years buildingsomething, so they're less
apt to be, want to take risks.
Um, so they tend tobe, also the incumbent,
um, more looking towardwhat's worked in the past.
Sometimes we say backwardlooking, not that they're
backward, but more thinkabout this has worked
for us in the past.
And the successor's thinkingabout all the new things
that might affect thebusiness for the future.
(06:06):
So one's more past looking,one's more future looking.
Right, so if you're alreadystarting to think about goals
and objectives and risks andwhere you want to invest,
you have these differentvalues that you're, you're
trying to, to kind of managebetween the two generations.
Brady Brewer (06:23):
Yeah, I think that's a key point here.
Because on the surface,when I was looking, uh, at
some of the results fromthis study, I'm like, well,
maybe we should try to geteveryone on the same page.
And I think that just dueto the different, where
people are, in theirlives and other stuff.
I don't think that's probablya worthy goal to have.
We have to be able towork around some of these
(06:43):
goal differences or valuedifferences, I should
say, between the differentgenerations rather than try
to get everyone on the samepage, because I don't think
that's going to happen.
I don't think it's realistic.
Maria Marshall (06:53):
No, that's, that's correct.
Brady Brewer (06:56):
So Renee, we'll get into some of the
areas here in just a secondof where the two different
generations agreed and wherethey disagree, but I want
to start with where theydid agree that I think is
probably pretty important.
And that's who do, whodo all these generations
want as the successor?
Renee Wiatt (07:12):
Yeah.
So basically allgenerations agree that
they want it in the family.
They want that successorto be a family member.
Um, probably not shockingto anyone listening, but
farms want to keep thebusiness in the family.
Brady Brewer (07:23):
Yeah, it sounds like that's an overarching
goal by everyone involvedin these farm transitions.
They want to keepit in the family.
They want the newgeneration, the heirs.
You made a keydistinction between an
heir and a successor.
They want the heirsto be the successors.
Now, what that looks like, uh,may be a little bit different
and, and how they're involved.
And that's, if you want toget into that, I would advise
(07:44):
people to go listen to someof the other podcasts we've
done on farm transition.
So that may differ a littlebit, but overarching goal,
everyone's surveyed wantsit to keep it in the family.
Renee Wiatt (07:54):
Yeah.
Brady Brewer (07:55):
Okay.
So.
Thinking about some ofthe areas where these
generations, let's startwith the agree, and then
we'll move to the disagree.
So what were some key areashere where all the generations
or at least some of thegenerations, uh, agree, they
want to keep it in the family.
What are some other stuffthat they agreed on?
Renee Wiatt (08:13):
Yeah, so, um, another area where some of
them agreed on were, um, theywere satisfied basically with
the ability of their familymembers to solve conflicts on
the farm when they arrived.
So they think that they'reconflict managers, they can
work through those issues.
So that was somethingthey agreed on.
Brady Brewer (08:29):
Now the skeptical person in me,
uh, says maybe thesepeople haven't gone
through a transition yet.
Um, you know, justbased off some work
that you two have done.
And then also anecdotally,you know, me just talking
with farmers, um, thinkingabout personal experiences,
these conflicts are realconflicts that can drive
wedges between family members.
(08:49):
So I like the fact that.
People are very confidentthat they will overcome
it, uh, but I do, you know,not to be the bearer of bad
news, I am, I am skepticalof the overall optimism that
all parties will be ableto, to, uh, overcome this.
Maria Marshall (09:05):
Well, if you think, you know, conflict
is what drives us forwardand what grows, so we might,
a conflict could be wheredo we go to lunch, right?
So, right, that isan indeed, right?
And we have to compromiseand figure out how to deal
with all these things.
I think it.
There's a degree ofdifferent conflicts that make
things easier and harder.
(09:26):
And so thinking about,you know, and sometimes
anecdotally from whatwe've seen, um, not talking
about it doesn't meanyou don't have conflict.
And sometimes when weask, oh, how often do
you talk about this?
They're like, onlywhen we need to.
Well, that in and of itselfis not resolving the conflict.
So I, I agree with you, butthere are, it's great that
(09:46):
I think they are saying wecan deal with disagreements
and conflicts as they go on,but then there's this level
of emotion, depending on whatit is, that suddenly drives
the succession as somethingthat's just a little bit
harder to, to deal with.
Brady Brewer (10:01):
No, that's excellent.
So I, I think what I'm hearingis, is don't view conflict
maybe as a truly negativeassociation here, right?
Conflict, well, it may not begood, but it's necessary to
maybe get those opinions outthere so you can determine
what is important to peopleand you can work around it.
Maria Marshall (10:19):
Right.
Renee Wiatt (10:20):
Yeah, if you can resolve the conflict,
then you can move forward.
But it's that unresolvedconflict that causes problems.
Brady Brewer (10:27):
I like that.
What else did, uh,uh, the different
generations agree on?
Renee Wiatt (10:33):
Yeah, so successors and incumbents,
um, both agreed that membersof the farm business are
supportive of each otherduring difficult times.
I would assume a lot offarm businesses, you know,
they work together, theyhave family events together,
they're in the same community.
So I would assume thatthey would have some
of these overlappingdifficult times, right?
If something happens in thefamily, they all feel it.
If something happensin the business or the
(10:53):
community, they all feel it.
So it's, It's good toknow that those two
generations feel like theycan be supportive of each
other and work throughthose difficult times.
Brady Brewer (11:00):
Now let's get to the disagreements.
So what were some areas,Renee, that the different
generations, the successors,the incumbents, the
sandwich generation,where did we see some
disagreements in the survey?
Renee Wiatt (11:11):
Yeah, so successors ranked
this statement prettyhigh - maintaining family
relationships is moreimportant than transferring
the business to the nextgeneration, which was
kind of eye opening to me.
They're the ones who wouldmost likely be receiving
that business, right?
Whether they buy it, whetherit's passed down to them.
And it was shockingto me that maintaining
family relationships wasmore important than the
(11:33):
business transferring.
Brady Brewer (11:35):
Yeah.
That's so, so just to clarifythe people receiving that
or could potentially receivethe business are saying, Hey,
it's, it's more importantwe maintain a family rather
than, uh, you know, so it,in the previous episode, we
talked a lot about familygoals versus business goals.
This tells me the successors,the family goals are
more important than thebusiness goals for, for
a lot of the successors.
Renee Wiatt (11:56):
Yeah.
And we have seen that some inthe field, we've seen some,
um, successors who are tryingto enter the family business
and, or, you know, tryingto enter the farm business,
trying to be part of thatmanagement and decision making
part and really when it comesdown to it, they have decided
to exit and get a careerelsewhere to maintain family
(12:16):
harmony and the businessto the next generation.
Even if it doesn'tinclude them.
So we have seenthat in some cases.
Brady Brewer (12:22):
Yeah.
So key distinction there fora lot of successors, family
goals are more importantthan the business goals.
Maria Marshall (12:28):
So we've seen in past research that when
we've asked people that havehad a transition, we've asked
them, so did you think thetransition was successful?
Forty percent said no,and that was because they
weren't speaking to familymembers or they had lost
contact with family membersbecause of the transition.
So maybe we have a generationthat's seen some of these
(12:51):
bad successions and say,I rather, I prefer to have
my brother or sister oryou know cousins then have
a piece of the business.
Renee Wiatt (13:01):
Yeah, and when we redid that that same question
in a recent survey, similarstatistics, so, you know, they
got the business but they didnot feel it was successful,
a successful transfer.
And when we asked why, theybasically said the process
was not at all what theythought, or there were
family relationships thatwere damaged in the process.
Brady Brewer (13:20):
Yeah, so the family relationships here
and the family goals aresuper important in this, so
please do not discount them.
Renee Wiatt (13:26):
Yeah.
Brady Brewer (13:27):
Uh, anything else where the
three generations yousurveyed did not agree?
Renee Wiatt (13:33):
Yeah, so for the sandwich generation,
they were the only generationthat ranked the statement,
um, that the successionprocess has been uncertain
for my farm business.
They were the onlygeneration that chose that,
and I think that speaksto where they are, right?
They're kind of in limbo.
They have this generationahead of them, which
is the incumbent.
You know, they're themain owners, probably
(13:53):
mainly doing most of themanagement decisions.
And then they also havethese successors pushing
behind them, right?
So they're trying to almostpush those incumbents out so
they can finally make thosemanagement decisions, but
they also have to considerthe successors that are
probably about 20 years, onaverage, younger than them.
So they're stuck in thisgap with the people who
are about 20 years ahead ofthem, 20 years behind them.
(14:14):
And they're in the middle.
Brady Brewer (14:15):
Yeah.
Understandably.
That's probably nota good feeling to
be in that position.
Renee Wiatt (14:20):
Right.
I mean, we've talked tosome farmers who are 50
or 60 and they're saying,you know, when am I going
to get to make decisions?
When am I going to getto manage the farm?
You know, when really, inother people's minds, they're
closer to retirement age.
So it's this kind of pull,and they're kind of stuck
in that middle generation.
Maria Marshall (14:35):
So if we wonder why are farmers on
average, you know, 65, um,and still in the stay and
grow stage, if we talk aboutthe quadrant from our last
episode, that would be why alot of sandwich generations.
Brady Brewer (14:48):
Yeah, because they they get a hold of the
farm and they should really bethinking about transitioning
themselves, but but theyjust took over themselves.
Renee Wiatt (14:57):
Right.
And then lastly if we look atincumbents, the one statement
that they ranked No othergeneration ranked was that
they themselves are mentallyprepared to pass the business
to the next generation.
So they may feel they'rementally prepared, but
no other generationsfeel that way.
Brady Brewer (15:16):
So, so the generation that is currently
in charge of the farm businesssays, Hey, I'm ready to do it.
No one agrees.
Renee Wiatt (15:22):
No one agrees.
Brady Brewer (15:24):
Any, any thoughts on or, or reasonings
why they may feel they'reready, but no one else does.
Do you think it's becausethe transition is going
slower than maybe the nextto the sandwich and the,
the successors want it tohappen or why, why this big
disconnect from the incumbentsto the other two generations?
Maria Marshall (15:43):
Yeah.
I mean, I think it goesback to that goal that
everyone agrees on, right.
They want to pass or sell thebusiness or give the business
to the next generationof family successors.
I mean, I think any farmerthat you ask basically
says that's what they want.
And they truly do want that.
They want that generation,that farm to pass on
to the next generation.
Now, mentally letting thatfarm go is a different thing.
(16:04):
So those two, those twostatements could kind of
be mixing up in their mind.
Because they do want it togo to the next generation.
They just can't yet.
Brady Brewer (16:11):
Yeah.
If, if I'm an incumbent,uh, listening to this
particular episode, I,I'm thinking, wait, do my
successors think I'm notmentally ready to do this?
I mean, uh, cause your surveywould say highly likely
that is, that is the case.
Renee Wiatt (16:27):
Mm hmm.
Yeah.
Maria Marshall (16:28):
So we would ask them, do you have a
roadmap to how your successorsare going to take over and
you're going to let go?
I think that goes tothat uncertainty that the
success, that the sandwichgeneration is talking about.
So there might be a lotof, uh, discussion and talk
about the process, but nota lot of actual determining
(16:50):
when things are going tobe transitioning, from
little things to big things.
And I think that leadsto the uncertainty of the
sandwich generation and theyounger generations thinking
you're not ready even thoughyou think you're ready.
Brady Brewer (17:06):
Yeah, so some key differences there between
the different generations.
If you would like to readmore about this study or,
or find other materialsto help your farm business
transition, please go to thePurdue Institute for Family
Businesses website, whichis at purdue.ag/fambiz.
(17:26):
For more farm management newsand information, please go
to the Center for CommercialAgriculture's website at
purdue.edu/commercialag.
On behalf of the Center forCommercial Agriculture, I
would like to thank you forlistening to this episode.
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