This article originally appeared in the January 2019 issue of Soy Perspectives a publication of the Illinois Soybean Association.
Succession success — have those two words become an oxymoron like jumbo shrimp or small crowd? What stands between farmers and a smooth transition of ownership from parents to children? The list of possible answers is long, but experts often point to differing generational mindsets as one of the most significant obstacles to a successful plan.
The Pew Research Center defines millennials as those born between 1981 and 1996. Since the oldest millennials are now well into their thirties, the time is now to start addressing generational mindset gaps. Failure to account for the unique perspectives and life goals of millennials could put owner-parents at a distinct disadvantage when putting together a plan that will ultimately benefit everyone in the family.
WHAT ARE MILLENNIALS THINKING?
While generalizing about millennials — or any other generation — brings inherent risks, understanding unique mindsets can make it easier to map a seamless transition.
“Millennials are motivated in general terms less by a desire to build up assets and a balance sheet than previous generations. Material things simply aren’t as important to them, at least not in the same ways,” says Mark Shiller, succession planning expert, Certus Legal Group in Milwaukee.
At the same time, Shiller cautions, “It’s important not to characterize millennials as lacking an entrepreneurial spirit. There are plenty of hard-working, entrepreneurial-minded millennials.”
The way each generation views the business of farming may also be shifting. “Agriculture has always been a handshake culture. The younger generation tends to view it as more of a business that just so happens to be a farming business. For them, contracts must be written like in any other business, says Cari Rincker, Illinois attorney specializing in agricultural estate planning.
As field sensors, imagery and other sophisticated tools continue to make inroads on farms, Rincker also sees a greater comfort among millennials with all forms of technology.
“In the last five to 10 years, there has been an uptick in young farmers wanting to get involved in the family farm. I think farming is becoming cool again. Consumers are feeling more connected and aware of where food comes from. A lot of young farmers are wanting to get involved in social media and really tell their stories to consumers,” says Rincker.
Erin Herbold-Swalwell, succession planning expert with Brick Gentry LLC in Des Moines, echoes this sentiment.
“The tech-savviness of millennials can create a generational gap since available technology resources have changed drastically, even in the last five to 10 years,” she says.
In addition, Herbold-Swalwell observes millennials can be more risk-averse than their parents and may require coaching to help them understand how to weather the ups and downs of the farm economy. She recommends Iowa State University’s Ag Decision Maker website as a valuable resource to help risk-averse millennials understand what farm ownership might entail.
“In farming, we know there will be times when you need to take significant risks. Now that we are going through a downturn in the farm economy, it’s interesting to consider that many millennials are now experiencing for the first time what the older generation lived through in the 1980s. I think that’s something the older generation doesn’t always consider,” she says.
“WE’LL TALK AFTER HARVEST”
What proactive succession planning steps should families take to work through potential differences in motivation and long-term life goals or to align perspectives on technology and risk? How can they bridge generational gaps and smooth the entire process?
The first step is both deceptively simple and extremely difficult:
Read the full article in the January 2019 issue here.