Open Air Business January 2017

INDUSTRY TALK
Succession
Planning
The sensitive process of handing the reins of a family business
over to the next generation, with advice from Michael Mack
WHY DO WE do what we do? This
is one of those big philosophical
questions that we all ask ourselves
from time to time. But when it’s
time to consider passing a family
business to the next generation
then it’s critical to answer it.
Many farming and outdoorbased
businesses have
taken generations to create,
yielding business and personal
opportunities for families. These
businesses also result in the
creation of people. For many,
their land-based enterprise will
have shaped their lives; providing
structure for education, work
opportunities and friendships. So
the idea of leaving the business is
scary.
“WOODS ARE
DESCRIBED AS
HAVING A HIGH
‘CARRYING
CAPACITY’;
THAT IS, THEY
HAVE AN
ABILITY TO
ABSORB
LOTS OF
PEOPLE AND
ACTIVITIES”
For the younger generation to
step up to the table and lead a
business onto greater things is
also a daunting prospect. Can I live
up to my parents’ expectations?
These two views make it easier
to ignore succession planning,
leaving it to chance or in many
cases until parents sadly pass
away. Is it so bad to leave the
process? Having spent time with
farming and rural businesses
before, after and during succession
planning, I have reached the
conclusion that poor or no
succession planning is not an
option, that is to the business or
family’s benefit.
Every business goes through
a standard business cycle; an
early period of growth, learning
and growth, plateauing and then,
as the leaders’ attitude to risk
changes and as the sector moves
on, a period of decline. It is the
need for the business vigour
generated by fresh ideas that
drives businesses of every size to
look at the succession planning
of the management team. If a
family fail to address succession
planning, the business can
undergo a significant reduction in
economic growth, a problem when
new generations are looking to
derive an income from its assets.
It is the family viewpoint that
is the most important reason for
positively dealing with succession.
We have all heard of farming
families that have been pulled
apart as a result of poor succession
planning. Siblings not talking,
destruction of family assets, and
in some cases legal action, which
destroys all strands of what makes
a family. You only have to Google
‘Cowshed Cinderella’ for a good
example of poor planning.
Coming back to my opening
question, why do we do what
we do? If we as a family fail to
understand why we manage a
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