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Groom daughters as CEOs
By Mark Andrew Junkin
Many fathers would harshly criticize anyone at the coffee shop who said their daughters couldn’t farm. Too often, what they say and do are completely different!
In families with multiple siblings, CEO succession isn’t based on merit; it’s based on anatomy. The issue of estate planning is completely separate from the issue of farm management and leadership. Many farms are splitting equity equally among siblings, but rarely do you see a farm corporation where the daughter is being groomed to be CEO.
On too many farms, the daughter becomes CEO only if there aren’t any male heirs. In fact, the daughter isn’t included in strategic conversations as a partner. Dad calls the shots to his grave and never grooms her to manage. She may work 100 hours a week on the farm, but she’s never treated as a full partner by her father. When he dies, she’s left overwhelmed in Dad’s shoes.
Any fool can teach his son or daughter how to drive a tractor straight up and down the field. Any fool can leave his kids with an estate where a brand-new tractor and a full line of equipment are sitting in the yard. Very few parents are successful in teaching their kids to manage so that the next time they trade in that equipment, the kids can afford to buy new (twice the horsepower) and afford three vehicles from the cash flow of the previous one.
A farmer’s daughter too often does all of the work in the final years, but Dad goes into the machinery dealership or the bank alone to negotiate a tractor purchase. These soft skills aren’t taught to the daughter, but they are taught to most sons.
I had a client with two delinquent sons and one stellar daughter. The farm was one of the largest in the county. The 63-year-old father had terminal cancer, and he asked me out to the farm to set up his succession strategy.
One son was a hard worker but also had a drug problem. The other son had a hard time getting out of bed and was the first to head home. Both were farmers – not out of passion, but because it was easy to stay home instead of venturing into the world. The daughter had multiple job offers after finishing top of her college class, but she had a deep desire to farm with her dad.
The daughter did all of the work. After she returned home, she turned around the production both within the cow herd and the calf barn. The calf death rate went from more than 30% when the lazy brother was doing it to 4% with the daughter. Due to improved feeding, milking protocols, and herd health, production spiked 20%. She worked 70-plus-hour weeks consistently and was meticulous about everything she did.
She represented everything that was right, yet everything was wrong. She was drop-dead gorgeous. She had several dairy farmers vying for her heart. She didn’t want to move to another farm to become a farmer’s wife; she wanted to be a farmer. “He can move to our farm and work for me,” she said. Her father laughed, thinking it was foolish. He said she’d be married and living on her husband’s farm in five years.
Dad invited me to meet with his sons about succession planning. The daughter would get some assets, but she wasn’t considered for succession. It was all about the boys, and Dad was beside himself not knowing what to do. He felt neither son was competent enough to take over the management of the dairy, and he worried the farm would be sold within 10 years if he gave it to the sons.
The father had tried to groom his sons to be managers, but they didn’t take the initiative. To them, the farm was simply a job. The father commented that his daughter put his sons to shame, and said, “It’s too bad she wasn’t a boy.”
I made him realize his daughter was competent to be CEO of the dairy, and she could best manage her brothers to be good employees. If they didn’t listen to her, she could fire them, but they could retain equity in the corporation as absentee owners. Together, the three kids could take on the world. He was skeptical at first, but after a few days, he was on board.
I’ve also had a client family where the daughter was 68 and the two delinquent younger brothers were in their mid-60s. Back in 1981, their father died suddenly, leaving the estate in shambles. It was her leadership that kept the sizeable farm together. Because the father never named her as CEO, however, it was two decades of daily bickering and lost opportunities.
It’s not a parent’s fault. It’s a cultural norm that will take generations to change. Even farm moms, who advocate for women, fall into this trap.
The way to fix this issue on your farm today is to change the decision culture. Family decision-making has to evolve to be a group process where daughters are included as equal partners. You have got to start holding monthly meetings with all of the key family members where business issues are discussed openly. No more Dad discussing strategies one-on-one with sons and the daughter being last to know.
If you are a female and serious about being a farmer, you need to be at the table when decisions are made. You need to be integrated into the business as a decision maker – not just as a shareholder.
By doing so, over the long term, you’ll be regarded as a real decision maker and a partner – not a princess.