Current Progressive Dairy digital edition
Advertisement

Keys to a powerful family or non-family partnership

Robert A. Milligan Published on 03 February 2011

Most family businesses – farms, local agribusinesses, restaurants, etc. – are started by an individual owner. As they grow, the businesses (farms) often transition to multiple owners. The new owners (partners) are often, but not always, family members.

This change, like all business transitions, is crucial to farm business success. The decision to enter into a partnership should be made with great care and planning.

The implementation of the change should involve strategic and tactical planning to ensure the partnership succeeds. The goal of the partnership should be financial, business and personal synergy (one plus one is much greater than two).

Successful partnerships do not just happen. In the excellent book (details follow ) Power of 2 the authors conclude: “Being a great partner is hard work.”

advertisement

advertisement

They further comment in referring to partnerships: “Collaborating well demands a degree of accommodating and humility rarely needed elsewhere.” Even more effort – probably many times more – is required to develop leadership relationships and structure than to establish the legal structure of the partnership. Investing this time is a challenge, as it is not as obvious or urgent as is the legal structure.

Great partnerships require a unique mix of unity and diversity. The partners must be unified in the vision but complementary strengths and diverse backgrounds, knowledge, experiences and perspectives improve the partnership. This article details this unique mix to assist you in selecting partners and improving your partnership.

The “big rock” – really a boulder – in selecting a partner and determining the success of the partnership is the unity of vision. The required unity extends beyond the vision to include values and business focus.

These three – vision, values, business focus – are crucial because they provide the “frame” for decision-making. With no unity in these three, each partner is using different criteria and a different focus to make decisions. It is no surprise then that they reach different conclusions and decision-making becomes difficult to impossible.

Let’s look at each:

advertisement

• Vision: Jesse Stoner Zemel, co-author (with Ken Blanchard) of Full Steam Ahead , states: “A vision is a clearly articulated, results-oriented picture of a future you intend to create. It is a dream with direction.”

A vision is the focal point of the journey to the future. It is crucial to establishing the strategy for the dairy farm. If the partners are on different journeys, it is unlikely they can reach consensus on major or minor decisions. I have always said that without a common vision, every decision becomes a battle.

• Values: In contrast to the vision, which is big picture, values provide the guidelines for daily operation and decision-making. Each of us and each partner has values – honesty, integrity, excellence, quality, privacy, etc. Values are very personal and very important to each of us.

The values of the farm business are a product of the farm’s history and traditions and the values of the partners. The farm’s values should be identified and lived every day. Each partner need not have values identical to those of the farm, but each partner’s values must be in line with those of the farm.

Real or perceived differences in personal and farm business values will usually lead to deterioration in relationships between partners and tension in the farm business.

• Business focus: The incredible changes in the business environment facing agriculture in recent decades and the transition over the last 50 years of farm owners from laborers to managers to chief executives, has resulted in farm owners with very different business focuses.

advertisement

0311pd_milligan_fg_1

Certainly different business perspectives and strengths are a plus for partners; however, a large difference in business focus is not conducive to the discussion, debate and collaboration necessary for a successful partnership. Figure 1 is my description of two very different ways of looking at the farm that I have found in my work with farms.

Neither is right or wrong or good or bad; they are different. Some degree of consensus is necessary to be successful partners.

Agreement on the vision, values and business focus is the “big rock.” Given this unity, you can then work to consummate and/or improve the partnership. The following are some “smaller rocks” that can help:

• Strengths and weaknesses: Just as a football team with 11 quarterbacks will not win many games, a successful partnership requires complementary strengths.

Each partner must contribute strengths to the farm business and be respectful of and help compensate for the weaknesses of other partners. This is one of the greatest potential sources of partnership synergy.

• Proactive communication: “The most dangerous trap of collaboration is the convenient availability of someone else to blame for failure.” To avoid this trap, outlined in “Power of 2,” each partner must continuously work to maintain and improve the relationship with partners.

A key to maintaining excellent relationships is to proactively address issues that arise – because they will arise. Crop and animal productivity is maintained by proactively and aggressively anticipating and solving any problems that arise. The same is true for relationships between partners.

• Collaboration and decision-making: Synergy and great decision-making come from discussion and debate. Partners must be willing and eager to express and discuss their ideas and perspectives; silence is not golden in a partnership.

If you have not had a debate leading to a great decision with your potential partner, you should carefully consider why you have not been able to engage in discussion and debate. Discussion and debate must lead to decisions all parties can support.

Beginning and growing a farm partnership is hard work with the potential for great personal and business success and rewards. This success, however, does require great effort to achieve. Partners must have unity of vision, values and business focus and must create synergy through complementary strengths, proactive communication and collaboration. PD

0311pd_milligan_1

Power of 2

Note: Power of 2 by Rodd Wagner and Gale Muller is a terrific resource based on Gallop Foundation research of highly productive partnership. It’s recommended reading for dairy producers.

Robert A. Milligan

LATEST BLOG

LATEST NEWS