Rutherglen grain grower Andrew ‘Russ’ Russell provides an insight into his succession experience and the lessons he has learnt along the way

Sue and Andrew ‘Russ’ Russell have been on both sides of the succession fence, as part of a team that took the reins of Sue’s family farm eight years ago and now looking at their own plans for moving on.

Although only in their mid-fifties and not expecting to “semi-exit” the business for another decade, Russ says it is important to start planning for succession – and talking about those plans – early.

This was a key lesson from his first succession experience, as the older generation stepped back and the management of the family’s dynamic Rutherglen cropping and seed production business was reduced from five parties to two.

“We are already talking about how we might enact the transfer or management to the next generation so that when the time comes and we are facilitating succession it is not a foreign conversation,” he says.

Early buy-in

Russ says he learnt much from the succession process with his in-laws around what worked well and what did not.

Sue’s parents, Geoff and Jude, had laid solid foundations for the longevity of the business, he says.

Thrilled to have their adult daughters back at the farm in the late 1990s, they employed some smart strategies that encouraged them to stay, such as paying them and their sons-in-laws like other workers and providing vendor finance to buy into the business.

“From a succession perspective, Geoff wanted to offer us buy-in early,” Russ says. “We were young, thirsty for knowledge and, with skin in the game and a healthy debt to service, we had impetus to drive the business.”

Right timing

What Geoff and Jude did not have  was a clear exit pathway for themselves  or any formal succession plan. Russ understands why his in-laws had not articulated a strategy for leaving the business. Like himself, Geoff never saw himself as ‘retiring’ from this industry that, to many, is more than just a job. “Farming is a lifestyle. It’s more than just one’s livelihood, it’s everything, so considering life outside of farming is hard to think about,” he says.

But because a clear succession strategy had not been a priority, Russ believes Geoff and Jude left their plans for retirement slightly late. “They’re in their late 70s now, and when they decided to retire, in their early 70s, they had unfortunately incurred minor ailments that hindered their ability to continue within the business,” he says. “So that’s a lesson we’ve really considered – to not make a similar mistake.”

Geoff did spend some good years in retirement working on-farm without having to worry about the business.

“He didn’t have to think about paying bills or generating money – he just turned up and did what he wanted to do, which was great,” Russ says.

It is critical that the retiring parties’ needs are central to any succession plan, he says. “And I can’t stress enough that the discussions need to happen sooner than later.”

Guided talks

Today, Russ and Sue run the farming business, with another of Sue’s sisters and her husband running the seed cleaning business. It is a scenario that now works for everyone, but the road to get there was not easy, says Russ.

The family’s first succession planning effort – with a retired barrister overseeing a jargon-heavy, impersonal process – was a disaster, Russ says. But it helped them understand what they did not need.

A more personal approach came from former Rabobank consultant Kim Lee, who helped them navigate the process. “She said that as a family – and with the help of a good facilitator – we needed to work out what our succession plan looked like and then consult with specialists (legal and accounting) afterwards,” he says. “It still resonates with me because it means the family is making the decisions but recognises that you absolutely need specialist guidance.”

The subsequent facilitated conversations the family had to clarify people’s needs and wants around succession were emotional and, at times, gut-wrenching, he says. But they were a necessary and healthy part of the process that landed them in a place they could all agree on.

“At the end of the day, we had to be candid and make sure everybody was happy so we could continue to have Christmas together,” he says. “That was the focus.”

Business transfer

Russ says the second breakthrough came via a consultant, Jim Benson, who advised them to view the succession process as a ‘business transition’. This pragmatic lens removes the emotion from the process along with the connotation that the farm is being ‘given’to someone, Russ says.

That was a pivotal point, and it really resonated with Geoff and Jude because it inspired them to think about installing a model that would overlay people’s wants and needs with roles and responsibilities that would help secure the future of the business.”

This led to an outcome that was fair and equitable, but not necessarily equal. “There’s a big difference between equal and equality. Equal is hard to achieve and often not practical.”

Russ says that most importantly, his in-laws were happy with the outcome that gave them ongoing security and purpose. “We put together a proposal that factored in cost of living, plenty of travel and health costs plus security for the future,” he says. “And once they articulated what they wanted and we had that, the rest came together really quickly.”

Pippa, Andrew, Sue and James Russell. Photo Nik Buttigieg Studio

Embracing change

As the days of the oldest son inheriting the farm from a deceased patriarch disappear, the succession landscape has become more complex. But more resources and experts in the field who can facilitate the succession process have also emerged.

As well as a couple of farm family facilitators, Russ and his extended family had a solicitor, an accountant and an experienced facilitator helping to put together their succession strategy.

Now, in developing his own plan with his children, he is also drawing on the experience and advice from his agribusiness support network AgEdge. AgEdge is an organisation where peers are held accountable to each other and provide advice on interpersonal and business issues. It has reinforced to Russ the importance of starting his own succession planning process now.

“We recognise that our plan is a guide, and it will change over time, but it is helpful to set up a strategy by thinking about where we want to be, how big we want to grow that business and how we facilitate what we want to do in our lives,” he says.

And so, the moral is that succession, or business transition, is a process. It’s a liquid document and it doesn’t happen in one fell swoop – it happens over time. And the way it rolls out will change because circumstances change, so you’ve got to have some flexibility and understanding around that.

Current plans look at Russ and Sue semi-exiting the business in their mid-60s, allowing maintained connection with the following generation for guidance but also allowing them to wind down their business commitments.

Success in the eyes of Russ and Sue is handing over an economically viable and stable business that offers opportunity for their children. Russ says: “A business plan that can support our retirement and offer  our kids ample opportunity will be seen a win for all.”