John and Megan Hay’s own experiences with succession planning back in the early 2000s have been the catalyst for prioritising their own dairy business path some 25 years later.
The couple have eight children ranging in age from eight to 20 and they want to ensure if or when the time comes for succession, there is a clear path forward for everyone.
Megan said by having these conversations early and doing everything they could to prepare, hopefully the transition for the next generation would be less traumatic and far more productive.
“I’m under no illusion that it will be easy — change is never simple, but it doesn’t have to be contentious.
“I also want to ensure that, if we one day welcome sons- or daughters-in-law into the family farming business, they don’t have to experience the uncertainty and challenges that I faced,” Megan said.
John was the fourth child of six, and all the siblings were promised the farm would be theirs one day.
“At the time I came on the scene they mostly lived at home and the farm owned and paid for everything. There was minimal individual agency and honestly it was working for them,” Megan said.
“John and I just wanted something different as we started our own family.
“Above all we wanted to know what our role was so we could decide if we wanted to stay or go. It was a mess that took a decade to sort out.”
Megan said John’s siblings were all great but that had more to do with good fortune than good management.
In light of this experience, the couple decided to structure their own business to avoid history repeating itself.
Within the business there is an organisational hierarchy where people have defined roles and people can move in and out and change roles relatively easily.
Megan said the first year of operating the company was a bit rough and their ratios were a bit harsh but they are continuing to iron that out and they are hoping they will soon have the basis for a workable plan for the next generation.
Open and honest communication has been the key to this process.
“We had a pretty tough experience and I hear horror stories of families and relationship impacted by succession planning all the time and we didn’t want that to be us in the future,” Megan said.
“We have been clear and transparent right though so the next generation won’t have to beg or take because the opportunity will be there for them if they want it — in theory any one of the kids could come along without much equity and take over the dairy business.”
The family business is expecting to milk 800 cows by the end of the year.
They recently built a 400-cow compost barn and are hoping to build another sometime in the future.
They have invested in land rather than water because rain is free and they are hoping to set up a sustainable and enduring business for the future.
More detail on this story is in the next Dairy News Australia.