With nearly 10,000 baby boomers reaching retirement age every day from now until 2030, countless business owners and CEOs are leaving their businesses and considering how to transition to the next generation.
These leaders have achieved successful careers filled with many professional achievements and awards. However, these individuals are not interested in closing their company’s doors just because they choose to move on. Instead, they each have one more heroic deed before they leave.
It is the responsibility of every business leader to look to the future and ensure the success of their companies. So how do you do that when you can’t be the leader until then? Check out the following six critical steps to guide your journey to embracing retirement and transitioning your business to the next generation.
Tell your friends and family: Don’t make this harder on yourself than it already is. Talk to friends and family about your retirement goals—especially if you run a family business—so they can share their thoughts with you and help you through the process.
Talk to your board and other key stakeholders: Many of them won’t approach you about personal invasions, so be proactive and approach them. Talk to your board, other shareholders and especially your senior management about your plans for the future of the business and invite them to shape the future with you.
Assemble a Multi-Disciplinary Team of Exit Planning Experts: From attorneys to accountants to financial planners to leadership coaches and perhaps even family counselors, there are many specialists you may want on your side to help facilitate your transition. Identify them now so that they are ready for you and contribute to the process.
Clearly define your primary leadership responsibilities: With this foundation in place, it’s time to review your current job responsibilities and develop a transition plan for someone else to carry out your duties in the future. To completely transition from the business, someone else, for example, manages each customer relationship, assumes your check writing authority, plans new go-to-market strategies, etc.
Identify and Groom Your Successor(s): Once you have what you’re doing, you need to decide who will be best suited to do the job moving forward. Depending on the size of your business, you may have more than one successor. When identifying potential successor(s), talk to them about their future aspirations and create an individual development plan with targeted training, mentoring and coaching to address potential performance gaps.
Find your motivation going forward: As you complete the transition, you’ll need to identify your own personal passions. What motivates you? Are you writing your notes? Teaching or volunteering? You may be surprised that “work” isn’t the only thing you want to do for the rest of your life, so be clear about what comes next!
Obviously, this is not a complete playbook for managing your entire transition. But it does provide an initial roadmap to guide your journey. Depending on where each step takes you, you’ll need to take several more steps along the way.
Even if your retirement seems a long way off—perhaps even several years away—you’ll want to start taking these critical steps today to prepare yourself, your family, and your organization for a bright and prosperous tomorrow. Don’t wait to get started. The longer it goes on, the more options you have now.
By its nature, succession planning is a process that takes time – a long time – and cannot be completed overnight. Most organizations, however, tend to be more proactive than proactive in these strategic leadership transitions. This leaves very little time to complete the process smoothly and successfully. Instead, it only prepares a person to hold onto his power and hold it as much as he can.
In conclusion, remember that this will be an emotional and possibly confusing time for everyone. Be open to calling a “transition timeout” any time the train seems to be derailing, and give permission to the rest of your family and team to do the same.
Jeremy S. Lure is a member of the Family Business Consulting Group in Chicago and has over 25 years of experience supporting leadership and management functions, working with family-owned businesses looking to create a more sustainable future and transition the business into the next generation. It excels in supporting baby boomers transitioning into retirement and supporting their successors to take on additional business responsibilities related to management and operations. The Executive Desk is a guest column that provides advice, feedback or information about resources available to the business community in New Mexico. To submit a column for consideration, email gporter@abqjournal.com.
If you go
Jeremy S. Lure will share more information about succession planning and exit strategies at the James M. Parker Family Business Dinner on September 8 at Sandia Golf Club. Tickets are $125 per person. For more information or to register, visit birdease.com/17495/register.
