Farmers Don’t Retire: The Conversations That Never Happen

Dad was practically on his deathbed and the physio asked him, Oh, when did you retire, Mr McCormick? And he said, Farmers don't retire. Welcome to My Shout, the podcast where we have candid conversations about family business transitions. Today's guest is Kate Burke, agri- strategist and communicator, and the author of two books, the latest of which is called Succession: Future- Proofing Your Family Farm. Kate's been helping farming families for over 35 years to think better, stress less, and prosper more. In this episode, I'll be chatting to Kate about what happens when it comes time to succeed the family farm and what that does for the family and their relationships.

Alright, Kate, thanks for being on the show, mate. Cheers. Cheers, Shane. I might have started earlier. Thanks for - having me. - No worries. I was trying to think about, how do I bring some context to the conversation. And I was reflecting on, I was up, you know, but a bit like you get - around a bit, right? - Yep. - I was up in North Queensland, actually, going to a footy game in Townsville, and I'm at the pub across from the footy field and just catching up with some old work friends and the usual, you know, What are you doing now?

And whatever. - Going to see the Cowboys? - Yeah. Well I was gonna see the Bunnies play the Cowboys. Yeah. And, having a yarn, some old work friends and someone says, What do you do? And I mention I'm working with, you know, family businesses, and there's this old bloke at the other end of the bar, not part of the conversation, and just pops up outta nowhere. And he goes, Families are fucked. Outta nowhere. And not exactly the conversation you are thinking is gonna happen. And I'm like, Oh, hang on.

I'm like, I gotta hear this story. So I go down there and the Reader's Digest version is he grows up the youngest of four, the other three take off as you do in the Burdekin. You go to Townsville, then you go to Brisbane, and then you disappear somewhere in the world. And he stays on the farm, gets married, has kids, had no interest in going to uni. He just wanted to drive a tractor. Gets to, I think he's in his sixties. His old man and old girl, you know, gotta move to Townsville to go into retirement home 'cause he can't look after 'em anymore.

He, him, his missus can't. And the old bloke goes, You know what, we need to sell up so that we can afford to move to the retirement home. So we're splitting it five ways. Your mother and I are taking 20% and each of you is getting 20% each. And he's - never, - He's had 40 years, has he? 40 years working odd, on the farm. And I don't think the old man was necessarily being nefarious or the devil in this conversation, right? But I'm just curious, have you ever met this family?

I've met a few hundred of those families. To be honest, it's a pretty common story. I've just come off a week actually of running workshops, trying to help people get a bit of clarity. I call it pre-succession training, so a bit like pre-season footy training. And we had about 90 through the doors over three days. And I heard stories like that, all different versions of that story. And thankfully a lot of them hadn't got to that point, but they'd been that sort of story in previous generations that then scar them and block them from either, scar 'em, block them from trying to do a good job on their own succession, or motivate them to do a better job.

So it's - pretty common. - Yeah. Right. And so, I mean, read a little bit about your background. Obviously you grew up on the farm as well, the youngest of several. - Yep. - Does - that - Youngest of six. Yeah. So are you the one that went off and had the career while somebody else stayed and ran the farm? What's your story there? Yeah, so I'm the youngest of six and there's a fairly big age gap. So in our family there's four boys, two girls, and the other five kids were all born within about seven years.

And then there's a five-year gap, five or six-year gap. And then me. So the farmers ended up being my eldest brother. And then the second eldest brother. My sister went off and, as you did in the seventies, went and studied teaching. And most girls were studied teaching or nursing, if you're from the country. My next two brothers would've liked to have been farmers, I think. But there was, you know, it was deemed there was no room for them. And really by the time I came along, I'd been conditioned from when I was about 10 that I'd have some sort of an academic career.

And farming itself was never an option. But it never really occurred to me until 20 years later that I sort of never had the opportunity to go home on the farm. And I guess, my answer to that eventually was to buy a bit of land of my own once I was able to. So you consulted to farming families about how to farm and then what, 20 years later became a farmer? Yeah. Yeah. Yeah. That's exactly right. Yeah. So had to put my money where my mouth was.

So you've done your journey of being the child who doesn't hang around the farm and goes off and does your own thing, comes back. And, you know, hopping back to this fellow's story, he's done the opposite. He's been the one on the farm. And if I think about this is, I mean, you have a better idea on this than I do. I think about the, you know, productivity on a farm. It's increasing 1% year on year. The land is probably getting more value than the business is.

And meanwhile, the siblings are all off. They're building lives, building careers, building equity, building families and whatever. And the time comes and we go, We're gonna split it five ways. It must be absolutely devastating for the, and based on the bloke's face at the bar, it sounds like it was. Yeah, it would've been for a number of reasons. Essentially, particularly if he, there'd been no clarity about ownership. So effectively his parents' wealth was increasing through his hard work, was most of the, about 80% of the capital investment in farming's in the land.

And so it's very high capital, intensive business. At the same time, you know, the growth in land is phenomenal, on a worldwide basis, over 200 years, agricultural land's the most successful investment in the US and Australia. And people don't see that because all we hear about is all the bad times on farms, but they're actually sitting on a pretty solid investment, which does give people choice. But if there's no thought about how that investment then gets handled or those assets get passed on, or whether how wealth is distributed, yeah, it ends, it can end pretty badly.

And what we see, Shane, is we see a flip-flop. So one generation that will happen, it'll get split five ways. Then if someone does survive the farming journey, then the next generation, they'll say, No, we're gonna leave it all to the chosen sibling. And then that person might say, Oh, that caused a lot of grief with my siblings. I want to be more fair to my kids. So you get this flip-flop that goes on and on and on. And I guess a lot of the work I do is just try to get, think people to work out what's the best solution for them regardless of their previous generation's story.

Yeah. I was listening to a podcast you did a while ago, and you were describing that often the problem that you get brought in the room to solve is not the problem that needs to be solved. And it almost sounds like in this fellow's story, the problem needed to be solved was a conversation that was never had - about expectation. - Yes. Yes. That's right. And let's face it, we're, and particularly men of a certain era and a certain age aren't great at having those conversations anyway.

And we are very good at just existing and doing without acknowledging the unresolved tension. And often the result that you saw in the pub in Townsville is a result of that. Absolutely. And I guess what I'm trying to do now is make it safer for people to have those conversations and so that, 'cause it's, I don't know, what value do you put on the relationships with your family and then there's the money, monetary value that, you know, could have been done with a little bit of thought they would've been able to provide for those expenses going forward for the older generation to have an independent aged care experience and at the same time for the farm to keep going if that's what they wanted it to do.

Yeah, I think so. What's the story with, is it Elmore farm you - grew up on? - Yeah. - Yep. - Is that still running? Yes. Yes. So it, and I guess, yeah, I'm quite proud of the fact that, you know, it hasn't been easy and it wasn't easy for my father, deciding what to do and, but that farm's been going on my father's father's side. That farm's been going since 1870. And on my grandmother's side, they've been, they were farming in the district even earlier than that.

So we must be doing something right, that we've got through five generations and you know, and we still, we still, as siblings, we still all communicate and you know, big family, wide range of interests and there's always going to be some enjoy each other's company more than others. And that's just because you've got genetic diversity and diversity of experiences. But I think that, you know, I think Mum and Dad have obviously done something right that we all respect family and respect the decisions that have been made and we are still talking to each - other. - Yeah, I was thinking about the difference between say farming families and a regular family business.

It's difficult enough separating as the distinction from a non-family business, right? The difficult enough for the typical family business to go let's separate work and home life and trying to work out the intricacies of that. Then you add in that the biggest capital asset that we have and the family home and the business all live and breathe in the same place. That must be an amount, a massive amount of complexity and mental strain for some - folks. - Oh, it's so enmeshed. And often these are the conversations that are missed when they're getting business advice from business advisers.

Just that appreciation of what it's like to grow up in a family home where the office is the kitchen table, the conversations are at smoko and lunch. So you are sitting there listening to these conversations since knee- high. You know, some of my first memories of being in the ute with Mum and Dad going off to hand feed sheep and, you know, Mum used to take this old cane basket and turn it upside down and we'd play the drums and we'd play Knick-Knack Paddy Whack as we're going off to feed the sheep.

And you know, I remember actually steering the truck for Dad when I would've been younger than seven. Well, Dad sort of would get the truck in gear and you are holding onto the steering wheel and then he jumps over the back and starts feeding sheep. So you're intimately involved in the business, the actual action of the business from a really young age. And it can be quite a challenge for those that I call gen connected that grew up like this and then all of a sudden you're sort of separated from the business.

And when decisions are made, you know, it's saying that you are excluded from those decisions, because you're potentially seen as a threat, 'cause, you know, from the example you just gave before. And it's, you know, it's quite difficult for people because for the first 20 years of their life they're intimately involved and, you know, quite a few early career people take annual leave to go home and do farm jobs and then all of a sudden, it's more, Oh, we can't talk about that. So it's quite - interesting. - Yeah.

So you, obviously your experience was to leave and go and have the life outside the farm and then come back. What have you learned from that experience and having to, like, now, I guess, come back and have the conversation with Dad and the siblings around how we're gonna run the farm going forward that helps in your work? Yeah, so I suppose just to be clear, I haven't had a, the farm work, the farm that I own now is separate to the family farm. So that's something I went and purchased later on in life.

And when I was coming home to the family home when Mum and Dad were still alive, to have, you know, the sort of relationship you want to have when you're in your thirties and forties and your parents are getting older and you just wanna spend time with them 'cause, you know, you're, they're not gonna be there forever. It's challenging to stay in your lane, because you do wanna poke your two bob's worth in, particularly when it's your profession. And it's challenging to have just a family relationship.

So come home for the Sunday roast when the farming conversations are still going on. And, you know, when you pick up on the tensions, and it was interesting, there was one particular day where we'd had our Sunday roast and some of the farm crew, I can't remember who it was, went off to get some sheep in, which means going to the paddock, driving the sheep back past the house and to the sheep yards, 'cause they would've been getting collected the next day to go to market. And the sheep decided, sheep got a mind of their own and they decided they wanted to come wandering through the garden.

So I've gone out to help shift the sheep and get them back to where they were supposed to be going. And sheep work's one of those things where, you know, you're dealing with animals and there's dust and there's dogs and there's noise and motorbikes. And so it's sort of one of those things that always brings the worst out in people. And there was, I can't remember, somebody snapped at me, I think it might have been Dad. And I was really cross. I've gone inside to Mum, I said, Oh, this is just rubbish the way this all works.

And 'cause at that stage I hadn't sorted the succession stuff out. And so I'm going, This is ridiculous. And I'm having a two-year-old tantrum about the world and very opinionated. And Mum said to me, You can't control other people's lives. And very wise of my mother. And I've re, said, Oh, that's rubbish. Anyway, it turns out she was right. And that's one of the big messages that I have for people now. And you'd have it in your work too, when every generation judges the other generation and not even we're quite judgy in family, so we always think that we could do it better, we.

And you know, ultimately sometimes the hardest thing is to just sit back, understand your boundaries and let it play out. Yeah. Wise words from Mum. What's her, what's underneath that? What's she getting at? What Mum was getting at back then was, and I guess she'd learnt that over the years, she would've been in her seventies then. Mum's, it'll be Mum's anniversary in a few weeks. It'll be 15 years since she passed away at 81 from pancreatic cancer. She was trying to get me to be less upset about things I couldn't control.

So I was being, I was upset about, you know, the family dynamic and how it was difficult just to come and spend precious time with my parents because the farm dramas were always interrupting the family conversations. And it's, and it goes back to your point about family businesses that where you live on site and farms are particularly like that and there are no boundaries. And even some family businesses and hospitality's a bit similar, those family businesses that are very entrenched or there's quite more than just one or two working in the business.

There's very, and the business is what you've got in common. So it's all you hear about, all you talk about. And Mum was encouraging me to say, Well, yep, it's, that stuff's actually not your concern anymore. You can't control that. So don't get so stressed about - it. - That old circle of influence, - circle of - Yes, exactly. Yep, yep, - yep. - Yeah. So there's obviously two sides of that equation. There's the kids who aren't part of the active business and if they're taking Mum's advice, they're not getting involved in it.

And there's the ones who are actively in it. When the time comes to have that, Dad, we have to have this conversation. We can't keep putting it off. How do you start that? Yeah, it's a good question. And it's difficult. There's, and the best advice is to start earlier than later. And most advisers would suggest all the tough decisions are made by someone at the time someone's 70 and you end up having, end up having, yeah, I guess a more seamless transition. The reality is a lot of those conversations happen later.

And in terms of how you start them, my approach would be as a family member, if I go back and even think about as the observer, some of the gentle conversations I had with Dad trying to sort of get him to think about things. My approach was you don't do it in front of other people. And you get, and you meet them in an environment where they're comfortable. So one of the most fruitful conversations Dad and I ever had were up in the barn shovelling sheep poo from underneath the grate to put it in bags for me to take home and put in my garden.

So, you know, we're both dirty, dusty, we're not trying to sit at a table staring each other out. And I just said, Oh, you know, What are you thinking? You are gonna have to make some decisions sooner or later. And at that stage, 'cause I was younger than the others, I didn't even know if I was on Dad's will. Turned out I was. But I was more concerned about, you know, what was, what decisions he was gonna make for my brothers' sake rather than mine. And Dad, in that conversation, Dad revealed what he was stuck on and then I was able to sort of go back to Mum and say, Look, this is what's keeping, making Dad stuck.

And then they were able to move on from there. The sorts of language that I think people can use are things like, so say if you are the older person wanting to understand the expectations of both farming kids and non-farming kids, it's something like, We've been thinking about succession, thinking about our future and your future. Really love to know if you have any expectations. I suppose that goes both ways up and - down, right? - Yep. Yep, yep, that's right. And you're not coming from a point of entitlement, you're just going from a point of curiosity.

It's interesting you said you pulled your dad aside and had that conversation in a, I guess an environment that's not formal, so to speak. One of the other things I read that you said one time was, You gotta be careful about maybe not having the first conversation with the person you need to have it with. And I'm paraphrasing, it was not the right term, but it was along the lines of you can't unsay something. Yes, yes. There is an assumption that the way to deal with this is just to have a family meeting.

So we all get in the room and we start the conversation and we see what happens and the intention, you know, we don't know what we dunno. And so the intention is really good. But if someone says something that's on their mind that then offends someone else or inadvertently, you know, it can just put you back years in terms of getting progress. So I tend to prefer, as a facilitator, my approach is trying to understand the family and the clients and make a judgement of whether it's safe for everybody to be in the room together.

And if what I'm hearing in the private conversations is a lot of blame and a lot of toxicity, I would work with the family for a while before we all end up in the same room. Yeah. And I'm guessing at some point your family had to have that conversation. Was that hindered or helped by the fact that that was your profession? Oh, our, the conversations for our family were fairly typical of the era. And there really wasn't any conversations until there was a trigger, which in this case was like this, brother number two was getting married and effectively they were going to be the main farmers.

So Mum and Dad had to do some stuff then. And the only conversations I really had were just privately with Mum and Dad to try and help Mum and Dad make some decisions. And then they, yeah, and then they worked with their solicitor and yeah, with my two brothers and my brother's wife to sort of set out a roadmap and yeah, the other, no, the others that weren't involved in the farm weren't really included from my memory. I might have that wrong. And again, you know, if I had my time over again, I knew enough to be dangerous, but, you know, there's probably some things that I suggested that in hindsight might've been able to do differently.

And I think when it is your profession and you get involved in a family, there's always the risk that you get blamed by other members of the family when if they feel like they've been hardly done by. So, yeah. Interesting. What percentage of these conversations you reckon go smoothly versus the ones that don't? - Well, - I'm wondering how, if it's the common, if it's common, like my mate at the pub, that more common than not, that someone feels like they've been hard done by. Yeah, I'll give you some statistics and you can make a judgement, 'cause I don't have the exact stat for that, but I do know that probably 10% or less have legally binding communicated arrangements.

And about 30% have some sort of a succession plan, but that's been communicated that may or may not. Yeah. That isn't legally binding. And then roughly around 50% have done something or are doing something and there's about 50% where it's unresolved. So I think the answer to your question is your mate's probably a pretty common - story. - Yeah. It's unfortunate, isn't it? Yeah. Well, from during the week, you know, there's some good stories too. And I guess one of the issues, so we often focus on the differences between generational expectations, but one of the big stumbling blocks is the, and it's usually the male and the female, the older generation who have to make the decisions.

They can't agree on the best way to approach it. So someone wants to split it four ways. The other person thinks that's not right, we need to do it differently. So they sit at an impasse. And there was one lady in one of the workshops during the week where they, her and her husband, and they weren't your typical generational farm, they were actually professionals who had then bought farmland when the kids were still relatively young. And so the kids were very emotionally attached to it. But these guys had made their money in other professional pursuits.

And then of course the land that they bought and the house they'd bought, you know, spent a lot of incredible capital growth and they just couldn't work out how to best work it out. You know, they, for 10 years, the husband and wife had been arguing or not talking about how to do it. And we just had a bit of a chat in one of the breaks and I sort of proposed a bit of a model that I've seen work before that I thought might work for them and said, you know, you really need to go and get professional advice about this, but someone who has seen all your figures, I was just talking conceptually and at the, by the end of the sessions, 'cause I re, all I do in these sessions is essentially get them to answer 60 questions about themselves over the course of a day.

And as she was leaving, she goes, Oh, I think we're unstuck. I think we're sorted now. Thanks. And they'd been stuck for 10 years. So that's pretty - cool. - Yeah. There's a couple of things that have come to mind on that. One was that the conundrum around this expectation of legacy, typically patriarchal, you know, we want the sons to take it over and then their sons to take it over or whatever that looks like, but for that to happen, the sons need to find a partner who is now, you know, Well, we've gotta be careful.

So we've gotta set, structure this so that they can't steal it off us. But equally we want them who are, have a heavy influence over the kids who are gonna be the successors to put us, stand us up in a good light. And the juxtaposition that creates between trying to, you know, I guess maintain the family legacy and the family wealth, but equally include people who are highly influential in that journey. Is that familiar territory? Yeah, it's pretty archaic, isn't it, when you think about it? Like, it's very institutional and I suppose it goes back to our cultural roots of an Anglo-Saxon society, and that's how things were done in the past.

Thankfully, there is, there's been a real shift, I think in the last 15 years that women are considered successors as well. And that certainly wasn't the case 30 or 40 years ago. There's a lot of pressure on the in-law, whether it's the son-in-law or the daughter-in-law, and again, often the son and the daughter-in-law, perceived as the problem. But often they're just articulating what's said behind closed door by the child who isn't, doesn't have the courage or doesn't feel safe to say those things out loud. So they're often, they're just the messenger.

It's, yeah, it's a challenge. And that whole expectation that this must go on regardless. Do you think the historical, the eldest takes it over is not necessarily true now we're seeing that not just the shift towards the females having more of a standing, but potentially second, the second or the third child is more capable and therefore, is that changing as well? Yeah, it's an interesting one. 'Cause like in our family, neither my grandfather or my father were the eldest. So quite often it's circumstantial. But there is certainly in some businesses it's the eldest.

There was also, and I'm not sure whether this is still the case or not, but there's been periods and attitudes in certain families where those that were more academically gifted were encouraged to go off and get a profession. And the more practical person was the one that stayed home on the farm or they left school early 'cause they didn't fit into the academic system. I think that's changed a bit, you know, farming's a lot more complicated now. And you know, you need to have capacity in all sorts of areas to farm.

There are shifts, but ultimately it's still a very tricky conservative approach, I suppose. The other thing that came to mind when you were speaking earlier was around the tension between expectations from, let's say the patriarch, the matriarch, and you talked about them not being able to get unstuck necessarily, or make a decision. I was reading some research that was saying that there's an expectation that there's gonna be a whole bunch of wealth that doesn't necessarily transfer directly to the kids over the next decade, but it goes sideways to, you know, the matriarch first, just by definition women live longer, that sort of thing.

And therefore, an assumption that some of the decisions that we made about how that wealth gets managed, distributed, run, and what the expectations of the family look like will be quite different. Do you see that in your work? Yeah. Yeah. It's really interesting. And I guess this is something that people don't consider and why, I'll sort of go back to the importance of using legal instruments and not being afraid to spend money on professional services, is that often the people think they've done a succession, they've had the conversation, and there's been decisions that have been made.

And there's, you know, a will written, for example, and as you say, then one partner dies and it goes to the other partner in the first instance, and then on that partner's death, the rest of it is executed and there can be changes in the middle, or there can be some unresolved issues going back from the early conversations that the next generation have a very different view 20 years down the track to when these things were written up. I think the lesson in it that it needs to be evolving and it needs, we just need to remember that over time people's recollections differ.

And the intent. It's very difficult to put the intent in a will. And so a will's a very blunt instrument where binding agreements are probably a more useful legal instrument for a succession plan. Right. And is that because that document's describing intent versus action? Yeah. Yeah. It describes both, I guess, but it's not just about, because the will is essentially just distribution of assets after someone dies, and it's very difficult to put anything else in that. Caveat being that I'm not an estate planning lawyer, so apologies out there to all the people that specialises in this thing, if I've butchered that definition.

One of the things that's getting a lot of noise at the moment is changes to discretionary trusts, this sort of all the mechanics around how farming families or families in general set up their finances. What does that mean for, and what are you seeing and what are you hear, what are you hearing? Yeah, it's a really good question and it's sparked a lot of interest and a lot of focus. 'Cause the moment someone mentions succession, we're, as human doers, we like to go straight to solutions. So people often think all succession is about, is the mechanics.

So it's about, you know, What are the business structures? How can we avoid capital gains tax, manage capital gains tax? But, you know, let's face it, tax minimisation is probably the most popular Australian sport before cricket. And so people think if they've got the structures right, they've got the wills drawn up and they've got a tax plan that succession's done. Yet we know all our conversation up to now has been about dynamics, not about technical issues. This, these changes in legislation changing the proposed changes for how discretionary trusts are taxed and the changes to how capital gains tax is calculated and administered.

The good thing I think is 'cause I'm always glass half full person, it's creating the opportunity for the conversations that haven't been had. It's a bit like when the GST came in and all of a sudden we had to get better at our record keeping and you know, the shoebox actually became a little more organised. I think there's a great chance in the next three years effectively for a lot of people to have the succession conversations as they're trying to understand what the specific taxation changes mean to them.

And I think the reason why we had sold out workshops this week was people were actually coming to learn about that. And we did talk about some of those changes, but more importantly, they became clearer about everything they needed to do to have a better outcome and became more aware of the implications of not having the conversations. So it's not only we have to have a con, an uncomfortable conversation about what your expectations are and how things are gonna work out, what that looks like. But there's an implication if we don't.

So it's a really good opportunity to use it as the time to get their stuff in order. Almost the catalyst for the - conversation. - Yes, yes, - yes. - Seems to me that the challenge with some of this stuff is not that we are incapable of having a conversation. It's almost like I am looking into an uncertain future and maybe I'm not ready to see what's behind the curtain. Is that a fair assessment of why these things just don't start? It's one of the reasons. Absolutely.

So they're high stakes, which is one of the other reasons, you know, family and money. They're, it is really uncertain. 'Cause I mean, how long are you gonna live for, Shane? Yeah, tomorrow. We don't know. We don't know how long we're going to live for. We don't know, you know, you don't know what your kids are going to be doing in 10 years' time. What sort of adults are gonna turn into, whether they're gonna be interested in taking over the family business. There's so much unknown. We don't know what the government's going to do to us.

We feel like stuff is done to us. So there's all these things that, you know, and you just, what uncertainty does and all this noise, it just creates a bigger, bigger, I guess brain fog and brain noise and uncertainty. Then it either freezes our brain, it either wants us to run away or it wants us to fight. And that's what, so when we, so we all don't have the conversation, we get stuck and we're totally confused or we get cranky, and if we do have the conversation, it's not pleasant.

And I think that's one of the reasons, particularly now with the changes in tax and whatnot, it's a trigger to get something done. And I guess the importance of people like yourself and myself in guiding businesses through this is we're one step removed so we can engage our rational brain, encourage them to provide us with the data, you know, the finances and the other bits and pieces about their business so we can help them have the conversation and help them see the facts and look at various scenarios and then narrow it down to what's most useful for them.

So it's just putting a bit of calm in the farm, I guess. It's good, good term for a conversation about farming families. The assumption of, I guess that's been running through the whole conversation has probably that this is going to be a, this is gonna be a difficult conversation, it's gonna turn out badly, or if you do nothing, it's gonna turn out badly. But I imagine you wouldn't have a job if things weren't also good on the other side of this. Can you share a story where this has gone well?

Oh, absolutely. Look, there's some, it's quite an exciting time, you know, when people are working together for a common goal as a family and they enjoy being in business together and we set goals and like, it's clunky, but you get to achieve them and then, you know, and they set her, set themselves to doing that. And lo and behold, five years down the track they've achieved what they set out to do. And so then we set new goals and do it all again. And when you watch that happen, you know, that's what brings a smile on my face.

And it's really rewarding to help people do that. So is that the conversation around growing the business or the conversation around succeeding it or both? It was, in the case I'm thinking of it was both. So often what happens is you got a new generation's coming home and so we might need to be supporting two families or three families instead of one family. So what size business does this need to be to be able to do that? And that's the conversation that then becomes a growth conversation as well as a transition conversation.

You know, there's another example where in working out their wants and needs, the common agreement was that the next generation would be able to be operating independently by the time they were 30, because that's what the opportunity the parents had been given by their families. And so it was about, Okay, we had 10 years to get busy and we needed to grow the business to create that wealth for each unit. And they made some pretty courageous decisions along the way to do that. And, yeah, being part of that growth and looking at them now, it's really - cool. - I'm interested in somewhat related to your story, but the typical story of the, you know, some of the siblings go away and they, others stay at the farm, and then you talked about the couple of families come back and we have to have a family that's operating.

How does that work out when someone goes to the big smoke and gets tied up in a, you know, philosophical conversation about how the world should be and wants to come back and change the world on the farm and the people who have still been working there the whole time are saying, What would, you know, you haven't been around? How do you, how does that all play out? Yeah, that can be a really interesting one. And it comes down to, I guess, values and, you know, that your personal operating system is basically a combination of original genetics, the way you've been brought up, and then the experiences you have along the way.

So if somebody comes back and decides that they, you know, wanna run a vegan chook farm, which I'm not sure how that would work, but you know, it's good to say something ridiculous. It can be challenging, it can be really challenging. And often, and some people are good at compromising and respecting those shifts. Others, it works out that, Look, we'll go and do our thing over here. And you go and do your thing over there. And probably what's more common is the older generation, when the younger generation does come in and, 'cause there's always generational differences, isn't there?

So when a different value system enters the farm and the farm business, the older generation thinking, Well, the, We do it like this 'cause it works. And the new generation going, Well, we don't wanna work on Sundays, we wanna take our kids to sport and dah, dah dah. So you get those clashes. And reminds me of I heard Justin Langer talking about his first appraisal of Steve Smith as a batsman and after working with him in the nets, he's gone back to Ricky Ponting and said, That bloke will never play Test cricket.

And how wrong was he? And the reason was Steve Smith had an unorthodox action and it was different to Justin Langer's action. So Justin Langer's definition of a good cricketer was someone who was like him. And he said that was the biggest coaching lesson that he learnt. And that's probably the biggest coaching lesson I have to teach farming farmers, farming mothers and fathers, is that the way they do things doesn't necessarily need to be the way the next generation does things. And the next generation can still be incredibly successful if they do the basics right, which is be profit-focused, good with people, and technically good at whatever they do and get things done on time and be strategic.

But you can do that in a thousand different ways. Yeah, that makes sense. It's interesting, when I was in Tassie recently, we went to visit a potato farm and you've got, you know, three kids, eldest son, he's picked up the potato farming. So you've got two daughters, what are they gonna do? Oh, well, one's gonna run the potato packing business and deal with the likes of Coles and Woollies and all that sort of stuff. Third daughter goes, Well, I wanna be, I wanna do something different. I'm interested in sustainability and a bunch of other things.

So they let her, they start a distillery. You know what, we've got a bunch of spuds, we got, we've got no use for. Happy days. It was funny you said that because straight away I was thinking, Oh, - vodka. - Yeah, a hundred percent. Yeah. So yeah, Hellfire story in Tassie, and there - you - go. - Yeah. Ah, good little setup. But interesting that in that instance it was not your, you are telling me how to run the farm differently. Their approach was to go, Actually we can give you all an entirely different role in the business and you could chase your pa, your passion.

If you were after, all about sustainability. Well, we've got a tonne of spuds that Coles won't take that there's nothing wrong with. What can we do with - those? - I think that's the trick to incorporating family members into the business is passion. They need to be passionate. The one often where is a less than successful outcome is if they've come home because they've got their eye on the size of the asset and that value. And so they're driven more by the money rather than being passionate about the business. 'Cause farming's not an easy ride.

It's hard work. You've gotta be responsive, you gotta be flexible. There's a lot of things out of your control. But if you love it, you can do really, really well out of it. And, you know, in, is an incredible wealth story there. If you're only half passionate about it, you know, you might be better off doing something else if that, if you're passionate about, you know, sports administration or something, you gonna have a much happier life than being on a farm just because it's worth a lot and yet you don't enjoy what you do.

I suppose that could also equally be the tension, which is I want nothing to do with the farm, but I wouldn't mind some of that liquidity. Thanks very much. Yeah, exactly. Exactly. Yeah, it's tricky. What if I asked you a question? Alright. So, Shane, I'm usually the one asking questions, so I am gonna turn the tables here. We have those conversations a lot. One of the things that's not clear in farming families is roles and responsibilities because they've just grown organically and as the older partners are trying to step away or want to step away, but then can't, dunno how to step away.

And there's often this tension between whose job is it and you know, who reports to who and who does the bank manager talk to? Do they, you know, they're always going to talk to Shane 'cause they've talked to Shane for 25 years and then James is getting grumpy because nobody rings him. My question to you is, I fa, even when I've given them systems or suggested on ways to systematise their business, if it's always been organic, how do you change into a more systematised business? Yeah. Short answer is it's not easy.

And the extended version of that is, and it's different for every business. So I've seen some interesting stuff. And this isn't necessarily a farming business. This is in a manufacturing context. The decision making always seems to land in one person's bucket. And you can speak to that person and say, Everything's coming through you. You're a bottleneck, this is so, I mean, if we can't solve for this, it's a problem, and they can't see it. Yes. No, I've delegated that. Like, you know, as you said, James does that and Shane does that and such and such.

That's all handled and you go, That's interesting 'cause in the time I've been sitting here, James and Shane and somebody else have all walked in here and asked you a question. How many of those questions could they have answered themselves? And it sort of sets 'em back a bit. That's a good question. Or they can't see it. So what we did as an experiment, 'cause I'm a bit of a techie and I run a podcast, is to get a little microphone that's a recording one. - Oh wow. - And I stuck it on his lapel and said, Just wear that for the day.

And then we got the AI to transcribe it all down there and said, Right. How many times was this bloke asked a question and what were the questions? We listed 'em all down and said, Right. We sat there the next day and said, Do you remember being asked all these things? Yep. Okay. Now how many of those were you, should you have been answering yesterday? None of them. Right. But it didn't occur to you that you'd even done it and it didn't occur to them that they shouldn't.

What can we do about that? Like, so that was, I mean it's a little, it's a little experiment, but it was pretty clear in an eye-opener to go, If everybody around here that you think you've delegated to isn't acting that they've been delegated to, or in such a way that they feel like they're empowered to have that, what can we do about it? And then depending on the business and who the folks are, that becomes a different decision. Because it might be, for example, every time a client, a customer rings up and has a complaint, no, sorry, wants to extend their payment terms or they want something, then we go to Dad.

Right. That tells me that the finance team don't have the right tools to be able to manage this themselves or whoever's running the books isn't empowered to do that. That might not be a system problem. It might be just a relationship and a people problem, but it's - probably both. - Yeah. Delegations of authority. It reminds me of the framework that I take people through, which is effectively the first step's awareness. So what do we need to be aware of that we are not aware of? And often it is the founder or the older generation who isn't aware of how they're operating and how that impacts on other people.

And then the next part of that is accepting that that's the case. And the third bit is, 'cause we are not operating in isolation. So how do we agree on, I guess the whole conversation about Mum and the control story are really around a story around acceptance. And then the third bit, which is often the trickiest bit, is actually how do we agree on what we need to address and then how do we agree on how to address it? And then the last bit is the actual action so that something happens and we keep moving.

And I imagine that's what you are taking your clients through that same - process. - I mean, similarly, yeah. I mean, that whole conversation was just about making 'em aware that. And it's pretty hard to refute the evidence when it's, you know, your own voice sitting in front of you. Yeah. That's the beauty, that, that's, I might have to try - that trick. - Yeah, that's good fun. You were talking about systems. One thing you can't systematise is someone's identity. Yeah, that's a good point. Yeah. The whole I, what do I do after?

Yeah, exactly. It's a real stumbling block for farmers. Like, my dad was practically on his deathbed and a physio asks him, Oh, when did you retire, Mr McCormick? And he said, Farmers don't retire. Do you see that in the businesses that you work with, that they're attached to their, their self-worth is attached to their success? Yeah. A lot of them is, their identity is part of the business. And so that, I think you hear it, typically hear it from the next gens. Yeah. They won't let go.

And you, when you start to pick that apart, why, it's like, Well, 'cause he doesn't know what else to do afterwards. Right? Yeah. Yeah. And I'm not sure how you deal with that question, but the, what I do is I ask people to list down what they do and then I'll list, get them to list down who they, who they are or who they'd like, how they'd like people to talk about them. You know, what's gonna be on their gravestone or what's their eulogy gonna be like.

Are people gonna say He's a good farmer, or they're gonna say He is a loving father, blah, blah, blah, blah, blah. And often they wanna be known as a good farmer 'cause it's the ultimate compliment in farming. But they'll say things like, Oh, I hope I've been a good role model for my kids. I hope I've been a good dad, you know, good husband, blah, blah, blah. And I said, Yeah, so you're a good human, so you are a good human and you farm for a living.

And it's quite the distinction. Yeah. The mental break between I'm a farmer versus I farm. There, it help, It gets 'em thinking. And often people who, it's about finding meaning and you know, I'm nearly 60, I've got 18 months to go. And you find yourself starting to think, Well, how do you live a meaningful life that's not associated with the achievements in your career? We are conditioned to achieve from the moment we, you know, or from the moment we're born, every time we grow. Oh, they're tall, or they're this, they're that.

Then we start school, you know, Oh, they've said their first word, or they've taken their first step, get to school and Oh, they've done this or they've done that. And so we're just conditioned to achieve all the way through and then all of a sudden everyone's telling us to stop achieving. So yeah. It's a challenge. My aunt learnt to water paint at age 89, so, you know, she kept achieving. Yeah. She can say she's a painter. Well, she wasn't a farmer, she was actually a travel agent in the bank back in the fifties.

But I think her lifelong, she had a lifelong passion for learning and that gave her meaning. I reckon the question is that we, how we help our clients is just helping them determine how they find meaning. And they might still be popping out to the farm and doing stuff, and it's just that we don't, we need them to know that we don't think any less of them if they're not the major decision maker. Mm. Okay. I reckon we're out of time and we have to finish our beers, so thanks for coming on the show.

It's been good fun. Hope you've enjoyed it. I - certainly have. - Oh, I've had a ball, Shane. Thanks. I've learned as much from you as I hope your audience learns from my story and my perspective, and let's hope that we end up with more families stressing less and - prospering more. - A hundred percent. Thanks for sharing your - family story too. - Yeah. Thank you. Cheers. Today's shout was a Irish Nitro Stout from the Devilbend Farm Beer Company down in Mornington, Victoria. It's a business owned by a couple of brothers called Mike and Owen Shaw, who are fourth generation farming family from the Mornington area, whose family traditionally farmed beef, dairy, and poultry.

And the boys are circa 2022, bought a old, abandoned apple orchard called Ned's Corner. And they're all about regenerative farming so they can produce the stock that goes into the beer and they have a brew house and you can get home delivery. So, cheers. Thanks for listening to My Shout. It's been amazing having you on board. If you like the show, I'd love for you to share it with your friends. Join us on the socials, hit the follow button, and let everyone know about these great family business transition stories.

Thanks for listening.