I have previously written about farm owners moving away from a
managerial and operational mind set to one of a strategic investor
The original idea came from an article by Tim Habbershon and
Joseph Pistrui, Enterprising Families Domain: Family-Influenced
Ownership Groups in Pursuit of Transgenerational Wealth, which
hypothesized that wealth creation across generations required a
shift in mind set from traditional family business thinking toward
the "enterprising families domain."
The enterprising families domain could be defined as one that
"favours growth and leads organizations to investigate
opportunities when expansion is neither pressing nor particularly
Clearly, it can be difficult to apply this thinking to farm
families where the farm is the primary legacy asset and may not be
However, I think there is merit in applying some of this
thinking to help farm families overcome the challenges of
Michael McGrann from Saint Joseph's University in
Philadelphia, along with Habbershon and Pestrui, also developed the
idea of six dimensions of enterprising families.
Many farm families may struggle to embrace the concepts of the
enterprising families domain, but they could still benefit from
applying these six dimensions to their own situations: leadership,
relationship, performance, vision, strategy and governance.
Leadership: Farm families often spend little or
no time developing the next generation of leaders. Most rely on
gender and birth order to decide who will manage the business in
the future. This is a poor way to select a successor, especially if
the current owners are relying on the farm's performance to
fund their retirement. Developing leadership skills through
internal and external coaching is critical, regardless of who is
Relationship: Many farm families fail to
develop good communication and decisionmaking processes, which can
lead to long-term stress within the family. A family-owned business
requires "relationship capital" if it is to progress.
Relationship capital is the sum of all relationships of people
within an organization. Those linkages have value, making the whole
greater than the individuals. Good communication processes are
needed to develop relationship capital.
Performance: Is the farm business performing at
the highest level? Can it tap into the competitive advantage that a
strong family has to offer? This is a key component to any
farm's future success.
Vision: Does your family have a unifying vision
of the future? This is often a strange concept for farm families to
grasp, but it is a vital one that can hold the family and business
together so that there is a combined understanding of the
overarching goals to be achieved. A vision also helps create
Strategy: Does the business know where it is
going? Does it have a plan that is aligned with the longterm goals
of its owners and the family? Many farms do not have a strategic
plan, which inhibits much of its growth potential.
Governance: Does the family and the business
have the organizational structures in place to effectively
function? This is often not a priority when the founding generation
is still in control but becomes one as siblings or other family
members enter the business or non-family members become involved.
Good governance gives everyone a voice and offers transparency in
the decision-making process. It may take time to develop and may
require outside help to implement.
These concepts are not applicable to every farm. Many farm
families will remain comfortable with traditional approaches to
their business management and succession planning.
However, entering the "enterprising farm families
domain" might work for those who seek an alternative option
that embraces the concept of transgenerational wealth creation for
the whole family.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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