OPINION COLUMN
By Sebastián Valdés Lutz
"El Campo" Magazine, "El Mercurio" Newspaper
May 24, 2021
Generational succession is one of the hardest obstacles to overcome in companies and especially in agricultural partnerships, where there is a larger concentration of family businesses. To snatch the reins from an experienced driver, traveler of long distances, over bumpy roads and plains, that over time has learned to find his course based on the signs than only frequency can teach, is a bold action that endangers the wagon, especially if those reins are given to unexperienced hands. But unequivocally the energy and skills of the driver will decline with time, until his replacement ceases to be a choice but an imposition.
The transfer of the administration is a project that is usually on the agenda of the owners of agricultural enterprises at some point. Professionalization of the administration, partnerships or family succession, are processes in which the owner must embark and disembark more than once during their rule. Seduced by the rationalization of giving and transferring the experience and knowhow of their enterprise, they will usually then abandon the process of confirming that the results were not as expected, or at least that´s the story that leaves them in peace.
The intergenerational succession´s administration whether by independent professionals, or a new generation in the family, is a process that has more emotional rather than rational challenges, and those are exactly the ones that make this transfer fail.
For an entrepreneur, his company is his source of realization overall, which includes transcendence, proof of what he has achieved, and what it is, making it common to see entrepreneurs abandoning everything for their companies, friendships and family included. Power attracts casual friendships, and resources, places and encounters with family, but the heart and mind of the entrepreneur is always wondering within his business. Sometimes it´s excessive responsibility, or just an inner passion, but without doubt there is personal realization in it.
Rationally, the entrepreneur will consider that the administration transfer to an independent professional, or a new generation, as the logical step in the organization’s maturity, which needs to rejuvenate ideas, concepts, vision and energy. But he will seldom stop to think about the emotional and personal loss he will endure. He will idealize his professional retirement, with an active social and family agenda. He imagines himself dusting off old hobbies and sports, those which his body will still allow him to enjoy. Hi is excited to embark on those travels that were so often planned with his wife, but then postponed for the business. However, in reality nothing is as he imagines, or lasts too little as a life project. Tedium overwhelms him, he has lost all the social privileges that come with being the leader of an organization, and most of all, there is nothing that realizes him as a person. This is when the succession boycott begins.
The succession boycott is rarely clear on its real causes. The entrepreneur doesn´t recognize everything the company gives him emotionally. He normally will support his decision on secondary arguments, like the new manager’s incapacity or differences in the decisions taken under this new administration. He will also support his decisions on conflicts he deliberately provokes, so as to have to come back as the “savior” of the company. Appointing certain sons in positions for which they are ill prepared, or appointing managements that overlap between brothers, are just some examples of “succession entrapments”. In the end, the result is the same: The entrepreneur is back.
The key to a successful succession process is that the outgoing businessman has a plan B as attractive as the one he is leaving. If he doesn´t have one, the first step is to create one. This plan B could be the creation of a foundation, an investment family office, the creation of a good corporative management, a political or union project, or any alternative project that allures him, where he will feel as realized as he was with his company. The second step is to create a new administration with the needed skills, whether within or out of the family, and understanding that as successful as the outgoing businessman´s management might have been, the new administration will have its own and particular management and leadership, in accordance to its own personality. Finally, there must be some space for error, because there will be some. No driver learns the singularities of the roads by maps, as many side notes they may have. They will need to drive in them, observe them, fall in the holes, and learn to dodge the obstacles.
It´s the driving school of life.