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3 Open Minutes with Mark Junkin, Farm consultant and mediator

Published on 30 May 2014
Farming with Family Ain’t Always Easy

Canadian farm consultant and mediator Mark Andrew Junkin recently released a new book about how ag families deal with transition and changes in their business.

Mark JunkinJunkin started consulting with dairy farmers in Ontario, Canada. He now has clients across the globe, from the U.S. to Australia.

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Progressive Dairyman Editor Walt Cooley recently spoke with Junkin about his first-ever book, “Farming with Family Ain’t Always Easy!”

Q. Why did you want to write this book?

JUNKIN: Last year, a farmer called me on a Sunday morning at 11 o’clock. He was suicidal.

I had to go out and physically take the firearm out of his hands. At that point, I decided that the way we do succession planning has got to change.

Q. What do you think is wrong with succession planning in the dairy business?

JUNKIN: The problem with farm succession is that everybody’s focused on that 10 minutes when you actually transfer the farm from one generation to the next.

At that moment, everybody’s focused on avoiding taxes. But nobody ever thinks about the 10 years before that moment, when a father and son are working together.

The dysfunctional way that families make decisions together during that decade creates both dysfunctional businesses and dysfunctional families. And too often it builds up to the point that families or the business fall apart.

When family joins the business, it becomes a completely different game with different rules. It’s like switching from playing golf to playing football.

Unfortunately, a lot of patriarchs have problems making that switch. And in a lot of cases they act like Neanderthals – he who is the loudest is the one who makes the decisions.

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Instead, it should be a process of transition – from one person making the decisions to the family decision-making together for several years and eventually to the father becoming an adviser with his successors making the decisions.

Q. How is your approach to succession planning different from what’s out there already?

JUNKIN: Every succession-planning book that I have read until now focuses 90 percent of its content on the transfer of assets.

In reality, the transfer of assets is less than 10 percent of all succession issues, and 90 percent of the problems a family will have in succession is in the transfer of decision-making to the next generation.

Q. If a farmer read just one chapter of your book, which one would you recommend?

JUNKIN: I would say Chapter 3 – “The third-generation curse.” It takes one generation to start the farm, the second to really grow it into an empire and then the third generation to run it into the ground.

In agriculture, we talk about that, but we never really examine why. In that chapter, I explore the psychology of what drives a man to get out of bed in the morning.

For example, if a son is born with a silver spoon in his mouth, how does his dad make sure that when he takes over an operation he makes decisions based on bottom-line results, not vanity?

The chapter goes into Maslow’s hierarchy of needs and how each farm generation has different perspectives based on their upbringing.

I do believe that you can overcome the third-generation curse. You just need to figure out how you’re going to cheat the system.

And it’s a matter of creating the right constraints on the new generation who will be taking over your multi-million dollar dynasty, so that they succeed and don’t drive the operation downhill.

Q. Tease our readers a bit more about that chapter. What is one thing you recommend to overcome the third-generation curse?

JUNKIN: The senior generation needs to recognize the need for self-actualization, Maslow’s highest level of need, in the younger generation.

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The two generations have different psychological needs. For example, in order to get those third-generation kids out of bed in the morning, they will need the motivation to squeeze more profit out of the business so they can donate more money to the local hockey club or have more time for their church or to become whatever they aspire to be.

Q. Since you’re a Canadian consultant, give us your opinion: Are family business transitions just as challenging in Canada as in the U.S.?

JUNKIN: The thing that surprises me the most is how similar the problems are. I’m starting to do work in Australia, and what surprises me is how similar their problems are to ours.

Q. Of all the topics you write and speak about, which one does your audiences seem to enjoy the most?

JUNKIN: The senior generation definitely finds the third-generation curse interesting. I would say the junior generation is interested in the science of decision-making.

What the junior generation is interested in is how to take ownership of the family farm without stepping on Dad’s toes. For example, it’s one thing for a farmer’s son to read in a textbook in college about having family business meetings, but it’s another thing to actually have them on the farm with your family.

Q. Do these challenges you’ve explained so far apply to dairies of all sizes?

JUNKIN: My system’s approach and techniques have been developed for dairy operations, but they just happen to work for everybody else. Whether you’re a 20-cow, 200-cow or a 2,000-cow operation, the constraints are very similar.

Q. How would you hope that a farm family would use your book?

JUNKIN: First of all, it’s a book and an audiobook. In my experience working with farmers, one person will read a book and bring it in for everyone else to review.

Five people on the farm will look at it and read the first 10 pages, but they won’t finish it. So this book has been designed with an audiobook feature so that you can go out to your dad’s truck or your son’s truck, plop it in and say,

“Listen to this on the way into town.” Getting everybody on the farm to listen to it is the first step. The second thing I hope is that the family starts talking about decision-making so that they always brainstorm new ways to make a profit or better manage their risk.

Q. What is one thing that generally gets a farm family in trouble in succession planning?

JUNKIN: I would say one of the biggest problems is the integration of new ideas. Quite often a young lad comes home from college to the family farm, the one his parents have spent their entire lives building up, and the parents hand the kid the farm on a silver platter.

Then the son will suggest a new idea or two, and it seems like criticism to the elder generation, like he’s trampling on that silver platter instead of saying thank you.

But the farm needs new ideas, ideas that are different from your own, otherwise the farm isn’t going to stay current and may be unsuitable to manage 15 years from now.

So the first thing I suggest is you have a monthly family business meeting. One of the items on that agenda is for everybody to come to the table with one new idea.

I suggest family members keep the cost of these ideas under $15,000 or 1 percent of the net profits of the family operation. At that first meeting, focus on little changes in order to get everybody used to the process of coming to the table with new ideas.

If the family comes to the table with new ideas, evaluates them as a team and then makes a decision together as a family, they will get better at following through on them.

It’s great to have good ideas, but the only idea that makes money is the one actually implemented. That’s where I see a lot of families fail.  PD

“Farming with Family Ain’t Always Easy!” is available at Amazon.com

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