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February 02
​The Next Generation is Back. Now What?

By Barb Dartt, DMV, MS

I met Karen for coffee to chat about her family’s business. Karen’s son, Brett, had been back working for the operation for two years. Prior to that, he’d completed college and had three successful years at a construction company. Her husband, John, had been really excited when Brett agreed to return. Brett and John had always seemed destined to work together. They had complimentary skills. They respected and enjoyed each other.

These days, though, Brett seemed increasingly frustrated. More and more often, he came to his Mom to complain about John. The topics ranged from:

  • Petty annoyances: He STILL doesn’t have his spray logs turned in! How am I supposed to take my weekend off AND hit the deadline for turning them into the state?

  • Old habits: He told me that during the winter, Ray reports to me since I’m running the shop. But in the last two weeks, he’s taken Ray four times to work on clearing fence lines without checking to see what I had planned.

  • Long-term, serious topics: We are talking about purchasing the Anderson ground. I’ve been here two years and I’m not an owner yet. We’re not even talking about ownership. It’s hard to get excited about growth. If you and Dad expand, it just feels like more that I’ll have to turn around and buy from you.

 “Is this normal?” Karen asked. 

“Absolutely!” I replied.

Tension between the generations is normal and healthy. The next generation (next gen) almost always wants to proceed at a faster pace than the senior generation. The infusion of their energy, excitement and innovation is an important source of renewal for family businesses. In fact, if they weren’t “nipping at your heels” a bit, you might be concerned about their ability to take on future business management and ownership.

So you have the next gen back in the business. What should you do to set the stage for their eventual business leadership and ownership?

Before we talk about what to do next, I’m going to set the stage with a couple assumptions. First, I will assume that your next gen were invited to return because the business needs their valuable skills (and not just their labor). Second, I am assuming that the business is either big enough to accommodate the next gen’s compensation OR the next gen came along with a growth plan to which the business is committed.

Assuming you next gens are working in your business upon your invitation, their skills bring value to the business and your operation is big enough (or soon will be) to support their compensation, here’s how to set them (and you!) up for success. In my experience, transition works best if you follow these steps in order.

Clearly assign responsibility so your next gen(s) can be become a high performing employee.

  • Create a clear role for your new family employee. Let them know what they are responsible for and what expected performance looks like. Talk about things like work hours, weekend duty, pay and how they get a raise, as well as behaviors like how they are expected to treat other employees – both family and non-family.
  • Some folks recommend a job description at this point. I wouldn’t disagree with this approach. Typical job descriptions don’t include quite enough detail (e.g. pay expectations) and don’t substitute for actually having the conversation with your next gen.
  • If your next gen had a highly responsible off-farm job before returning, they may bypass time spent within this role. Even if that’s the case, the need to create and communicate expectations around a clear business role still exists – that role might just start at a higher level.
​After the next gen has proven that they are a high performer in an area, give them some control over a portion of the business.

  • It might be as broad as control of a full enterprise or as narrow as a seasonal project.
  • Often this step requires two things from one or more senior generation folks
  • You must give up some control to make space for the next gen to learn and grow.
  • You must watch someone with much less experience make poorer decisions more slowly than you would. It takes patience and a deep commitment to continuity of the business to be patient and coach the next gen through this period.

This control should include lots of clarity around which decisions are theirs and which are joint. For example, if the next gen takes over the cropping enterprise so you (as the senior generation member) can focus on the livestock side, do they get to make the call on variety selection? Rotation? Number of part-time truck drivers during harvest? Nothing discourages next gens faster than thinking they have the authority to make a decision – and then having their call trumped by Dad (or Uncle. Or Mom.).

Finally, after a next gen has proven themselves to be a high-performing employee and that they can grow into leadership and control of a portion of the business, they have earned the right to be an owner.

Karen, John and Brett were following this progressive approach. Brett was a valued member of the business who’d been invited back. He’d had a chance to perform as an employee and was recently “promoted” to a position that included authority over the sow herd. And yet, he and his Dad (and he and his boss!) had occasional conflict. Brett wanted things to come faster. John, at 56, had lots more wisdom and work to provide. 

Some tension between the generations is a normal part of family business. But if you are today’s senior generation and want your family business to continue, you have both the authority and the responsibility to create a process within which the next gen has a chance to be successful. As I have said before in this column, it may be the hardest AND the most rewarding work you do on your business.

Barb is a consultant with the Family Business Consulting Group, working with families and management teams to help them keep their business healthy and the people happy. Barb can be reached at 269-382-0539 or dartt@thefbcg.com. 


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