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Commentary: Addressing key man risk can mean awkward conversations

How would a farm survive the sudden departure of the main operator?
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Manager Jurgen Klopp has been key to the recent success of the Liverpool Football Club, but farms can learn lessons from how he and the team have handled his pending departure.

WESTERN PRODUCER — It was a shock recently to hear that Jurgen Klopp will be leaving Liverpool Football Club.

The most stunningly successful manager in decades for England’s most glorious team is leaving the building this summer, after realizing he was running out of the energy needed to operate at the top of his game.

In the nine years he’s been at the club, LFC has won more trophies than in the two decades before he arrived, when the once dominant club fell into a slough of underperformance, misfiring, dysfunction and disappointment.

How will Liverpool fill this enormous Klopp-shaped void?

That’s the sort of question every farm should ask itself — how would it survive the sudden departure of the main farm operator?

Most farms operate with one or two chief decision makers and operators who are absolutely critical to the operation and success of the business. What happens if that key operator is injured, dies, gets arrested or in some other way becomes suddenly unable to oversee the farm?

These are things most families, businesses and organizations find incredibly awkward to talk about. However, it is a core risk to any sort of a business that depends on a vital operator, such as a farm.

There’s a term for it: key man risk. It, as you might guess, refers to the risk that a key man becomes unable to continue leading an operation and their unique skills and abilities are lost. Is the business crippled by this single person loss?

It can be difficult to assess. You might have thought Apple, Amazon and Microsoft would have had trouble continuing to grow when their visionary leaders — Steve Jobs, Jeff Bezos and Bill Gates — stepped back (died, in Jobs’ case) from the companies they had driven forward for decades with incredible focus. That hasn’t happened. Those companies have reached a point where the key man isn’t so key any longer.

But what about Tesla, SpaceX and Elon Musk’s other companies? As Walter Isaacson’s recent biography of Musk lays bare, most of the success of Musk’s multiple long-odds, high-risk ventures comes from his relentless and violently imposed vision and will.

As with Apple, Amazon and Microsoft, none of these businesses — commercial industries, actually — would have come to be without him. What happens if he dies (he indulges in high-risk behaviours), gets arrested (with this loose cannon that’s always a possibility), loses his mind (he lives on the edge of sanity, it seems) or just quits and goes away?

Could any of these businesses survive? Unlike the revolutions unleashed by Jobs, Gates and Bezos, Musk’s ventures are far from mature entities. Without him, would they wither?

How about your farm? What happens if you or whoever the chief operator is suddenly disappears? Do you have a plan for that?

These can be awkward questions. “What if dad dies?” is a tough thing to discuss at the dinner table.

However, a sudden absence happens far too often on farms, sometimes leaving the business in crisis on top of the trauma being felt by the family.

When it comes to retirement, we endlessly talk about “succession planning” in farm newspapers and at conferences in terms of the eventual backing away of the aging operator and about how to set up assets for orderly dispersal in the event of an unexpected death.

We’re less good at preparing for the operational crisis that erupts when the only guy who oversees the main production and management functions of the farm can’t do that any longer.

Musk is not the kind of guy to plan for what happens if he suddenly isn’t there. He doesn’t seem to be able to envision his companies without him being the essential driving force. For the sake of his industries, employees and vision of a renewable energy and spacefaring future, let’s hope he’s around for a while.

A much better model for farmers is Klopp’s just-announced coming departure. He told the club about his plans back in November so that the club can figure out how to try to replace him this summer, and so that his dedicated staff can figure out what to do with their lives and careers. New managers tend to bring in their own key staff and replace the old key staff.

If a farm hasn’t thought through how it would function without the key man, it’s time to get thinking about that. You might not be as fortunate as Liverpool has been with the Klopp transition.

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