With nearly 10,000 baby boomers across the U.S. reaching retirement age every day from now until 2030, countless business owners and CEOs are now considering how best to exit their businesses and transition them to the next generation.
These leaders have had successful careers filled with many professional accomplishments and accolades. Yet these individuals are not interested in closing the doors on their companies simply because they are choosing to move on. Instead, they each have one more heroic act in them before they walk away.
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 aren’t going to be the one leading by then? Consider the following six critical actions to guide your journey for embracing your retirement and transitioning your business to the next generation.
Confide in your friends and family: Don’t make this any harder on yourself than it already is. Talk with your friends and family about your goals for retirement — especially if you run a family business — so they can share their thoughts with you and support you through the process.
Speak with your board and other key stakeholders: Most won’t approach you about what might be perceived as personally invasive, so be proactive and go to them. Speak with your board, other shareholders and especially your senior leadership about your plans for the future of the business and invite them to help shape that future with you.
Assemble your multi-disciplinary team of exit planning experts: From attorneys to accountants to financial planners to leadership coaches, and quite possibly family advisors, there are several specialists you may need by your side to facilitate your transition. Identify them now so they’re ready for you and can contribute to the process.
Clearly define your primary leadership responsibilities: With this foundation in place, it’s time to review your current work responsibilities and develop a transition plan so that someone else can perform your tasks in the future. For you to transition completely out of the business, someone else must, for example, manage every customer relationship, assume your check-writing authorities, envision new go-to-market strategies, etc.
Identify and groom your successor(s): Once you inventory what you do, you then need to determine who is best suited to perform that work moving forward. You may have more than one successor depending on the size of your business. As you identify your potential successor(s), talk to them about their future aspirations and create individual development plans with targeted training, mentoring and coaching to address any performance gaps that might exist.
Find your go-forward inspiration: As you complete the transition, you need to identify your own personal intentions too. What inspires you? Writing your memoirs? Teaching or volunteering? You may be surprised that “work” is not all you want to do for the rest of your life, so be clear about what comes next for you!
This clearly isn’t a complete playbook for managing your entire transition. It does, however, present a preliminary roadmap to guide your journey. Depending on where each step takes you, you will likely need to take several more steps along the way.
While it may feel like your retirement is well off in the distance — maybe even several years away — you’ll want to start these critical activities today to prepare yourself, your family, and your organization for a bright and prosperous future tomorrow. Don’t wait to get started. The longer you do, the more options available to you now will likely disappear.
By its very nature, succession planning is a process that takes time — a long time — and cannot be completed overnight. Most organizations though still tend to be very reactive rather than proactive with these strategic leadership transitions. That leaves very little time to complete the process in a smooth and successful manner. Instead, it sets someone up just to grab the reins and hold on as best they can.
In closing, remember this is going to be an emotional and perhaps confusing time for everybody. Remain open to calling a “Transition Timeout” at any time it feels like the train is coming off the track and give others in your family and on your team permission to do the same.
Jeremy S. Lurey is a member of The Family Business Consulting Group based in Chicago and brings over 25 years of experience of supporting leadership and governance practices required to create more sustainable future and working with family-owned businesses wishing to transfer the business to the next generation. He excels at supporting baby boomers transitioning into retirement and their successors accepting increased business responsibilities relating to areas of management and operation. The Executive’s Desk is a guest column providing advice, commentary or information about resources available to the business community in New Mexico. To submit a column for consideration, email email@example.com.
If you go
Jeremy S. Lurey will share more information on succession planning and exit strategies at the James M. Parker Family Business dinner Sept. 8 at Sandia Golf Club. Tickets are $125 per person. Visit birdease.com/17495/register for more information or to register.