Succession with Judy Wilkinson

Family in Business and Business in Family Who is involved in a Family Business YES NO

Take Home from today Know where you are going (VISION) Understand how you will make it happen (PLAN) Talk about it (COMMUNICATE) Be realistic, flexible and recognise trigger points (CAPABILITY)

Driven by events Death Divorce - Departure Disaster - Drought

Driven by decisions Triple bottom line EnvironmentFinancialHuman resource Business like approach Human resource –Front end or back end

Who do we need Accountant – Business Structure and transfer information Lawyer – legal process for asset transfer/ wills/ power of attorney Financial Planner – goal setting, current position Ag Consultant – Close to family and business, can drive the plan Facilitator – independent, objective, control No one person has all the answers for a family

Movement of assets and continuation of a business Top Down – left to the will Bottom up – driven by the family

Events Front end – people joining the business Back end – people leaving the business

Business like approach Make it look like a business Treat it like a business Have a business like approach SEPARATE BUSINESS AND FAMILY A BALANCING ACT

Business vs Family Decisions Majority of decisions are Business only Family

Negative Family Impacts Divorce and potential loss of equity Family disputes Wills challenged Decreased profit Poor communication Lack of commitment Loss of family members and family life

Family vs Business Decisions Majority of decision are Family only Family

Business Impacts Decrease in equity People employed for wrong reasons Impact on working arrangements Impact on management decisions Jeopardizes Business like approach

Balance Key to balance Clarity Expectations Communication

Clarity Clear Communication Strategies Business time and Social/family time Keep Business out of the bedroom and bedroom out of business Regular Breaks

Expectations We all have expectations that we are Aware of and communicate (contract and agreement) Aware of and have not communicated (message since a child that the farm will belong to the boys) Not aware of and therefore not communicated (not aware that getting the farm included supporting parents in old age – often played out in the older generation but not talked about)

Influences on Expectations Family History Ordinal Position Environment Situation Values

How Many Generations has your family been in business?

Family History Genogram Family History Family of origin New members – own family of origin ACTION: Fill in your Family Tree ……………

Communication Strategy Scheduled operational meetings Process for dealing with conflict Process of dealing with triangles Dealing with generational difference

Key Communication Stages Marriage and or partnership Communication between generations Communication approach to including new members into the business and the family Be clear about the two different roles of family member/partner vs business partner

Business Time and Social Time Agreed boundaries –(no work talk at the Kitchen table ) Time allocated to non business activities –Social, sporting, children’s activities Ensure one relationship does not contaminate the other

Regular Breaks Holidays Time away Assist in maintaining a balance

Planning FRONT END or at the BACK END

Front End

Front End - Negotiate Money Time Housing Communication

Money What is it worth How often reviewed What is included : car, fuel, insurance etc Do we have the capability to pay – if not how well we measure and manage the difference

Housing What is included ? (phone, electricity, gas) Where ? Who pays for improvements? Who pays to maintain? Rent?

Time How many: Hours in a day (keep accurate records) Days in a week Weeks in a Year

Communication Decision making process Conflict resolution process Information exchange (meetings) What is discussed ie finances, workloads

Back End

Back End - Negotiate Family History Self Esteem Communication Patterns

Family History What happened in the previous generation? Think about history of communication Succession management and asset transfer How people were treated

Self Esteem Doing Being Doing Healthy Self Esteem Typical Self Esteem

Self Esteem One way to develop healthy Self-esteem is to focus on the skills we have that enable us to do something rather than what we do!

Communication

Develop a Communication Strategy How will Decisions be made Conflict resolved Discontent managed Change managed New entrant be negotiated Exits be managed Success celebrated Communication occur strategically and operationally

Communication Regular operational meetings A pause - set aside time How often What time of day Who will chair Will it be recorded How will those tasks be rotated

Regular Meetings - Agenda Affirmation (things that have worked well) Minutes – issues from last meeting Issues that have arisen since the last meeting Finance Day to day management Time management Gripe session (No right of reply) Triangles Ideas (no right of reply – can build upon)

Strategic Meetings These meetings set overall direction Entry and exits Change of ownership or management Change in direction of business Change in business size or operation Other events or problems not solved in operational meetings

Triggers for a Strategic Meeting Why or what (event) Things you can and can’t talk about Discontent or disagreement Stakes are high Emotions are involved Need consensus

Manage a Strategic Meeting Difficult conversation Difficult to manage yourselves Everyone will want to be able to contribute and have something at stake Find a facilitator

Where to from here Is there something that you can put in place in your family business How will you do it? Give yourself a Time frame it will occur in? What will happen if things don’t occur as planned?

Get it right Getting it RIGHT If you (all) know (COMMUNICATE) where your going (VISION) know how you will get there (PLAN) know if you can do it (CAPABILITY)

Thank you for your participation today