The topic of succession within agribusiness is increasingly more difficult to navigate in comparison to what it used to be.

Succession within agribusiness is becoming increasingly complex compared to what it once was.

So, in a world where there is more discussion and greater proactivity around succession planning, why is it still so difficult to navigate?

The biggest challenge all families face is communication.

Communication is often the key factor that determines the success or downfall of a family’s succession.

At SproutAg, one of the most common things we see when working with farming families is that communication doesn’t evolve as the family grows. A family unit of mum and dad (the owning generation) plus three children can quickly become mum and dad, three children, their spouses and their children — and they are only the family stakeholders. You also need to consider the external stakeholders involved in the business: the agronomist, accountant, stock and station agent, solicitor and others.

Suddenly, the owning generation has moved from managing relationships with three children and a handful of advisers to navigating communication across multiple generations and a larger advisory network. However, their communication approach often hasn’t grown alongside the family.

As families expand and welcome new members, dynamics and goals can change. How will two generations work together over the next two decades? Does the owning generation plan to step back or spend more time travelling? Perhaps the incoming generation wants to take on more responsibility, debt and growth plans.

While communication within the business must evolve, the leadership of the business also needs to evolve.

Succession planning today looks very different to what it did two decades ago. We are increasingly seeing up to four generations still alive, compared to three in the past. At the same time, asset values have risen significantly, and more recently, higher living costs have impacted the retiring generation and non-working family members, as there is often less free cash flow available.

These factors alone can shift family dynamics and influence how succession conversations should be approached. This is why both leadership and communication within the family business must evolve.

At SproutAg, we believe there is real value in hearing from each family member, understanding what they want and working towards balance across the family. While the owning generation will often have the final say, giving everyone the opportunity to share their perspective helps ensure people feel heard, whether they are part of the owning generation, working in the business, or involved as non-working family members.

This process allows the owning generation to develop a balanced view and understand the different perspectives across the family. From these conversations, they can establish clear guardrails for the business, taking a “nose in, hands out” leadership approach.

Establishing and communicating clear guardrails sets expectations within the family, particularly in situations where what is fair is not always equal. These guardrails can also create an opportunity for the owning generation to step back from day-to-day operations and move into a more strategic leadership role as the business and its assets continue to grow.

So how do you move succession forward in a large family?

Through strong leadership, regular communication and clear guidelines.

Another critical step in the succession process is ensuring the right people are involved. In addition to hearing from all family members, it is important to have one aligned team of professional advisers. Accountants and solicitors both play key roles in this process. Accountants help establish the right business structures, whether that be partnerships, companies or trusts, while solicitors ensure the arrangements are properly documented in line with the owning generation’s wishes.

Families who navigate succession successfully often have three things in common:

1. They start the process early.

The owning generation takes the initiative, sets clear expectations and begins the conversation early with family members.

1. They focus on clarity and avoid a “set and forget” approach.

They continue to review the structure of the business and recognise that circumstances change over time, whether through family growth, health considerations or business opportunities.

1. They prioritise clear communication.

Roles, responsibilities and expectations are clearly defined and regularly discussed.

By starting early and putting the right structures in place, these families are better positioned to successfully transition their businesses across generations.