Retiring can be particularly challenging for successful family business leaders. Handing over your company is a transition that impacts your spouse, children and extended family as well as other owners, your successor and the enterprise itself. The process can touch everything from your marital balance and the prospects of your children to the family’s financial security and your continued opportunities for meaningful roles. And yet, often, succession planning overlooks the exiting leader’s personal plans for the future.
“We talk a lot about letting go as a challenge but letting go to do what?” says Dr. Stephanie Brun de Pontet, Ph.D, Senior Consultant of The Family Business Consulting Group and author of “Transitioning from the Top.” What does the model look like and what are some of the factors that contribute to this being a challenge?”
Understanding the transition and how it impacts the retiree personally should be a part of the continuity planning. The individual considering retirement is facing significant losses and may be resisting this change. Family business leaders are at greater risk of clinging to a place where they know they can have an impact on the business, their family and the community. Thinking through the actual losses and having a plan for continuing purpose is critical. A successful individual’s professional role is central to his or her personal identity, even more so for family business leaders who view it as part of their family history and legacy.
“Stepping away can be perceived as an existential threat,” says Brun de Pontet. “Recognizing that that is a risk, being proactive about it and setting boundaries is really important.”
Business leaders are particularly goal driven and need purpose to be relevant. They often thrive being competitive and keeping a “score card,” which can be difficult to replicate outside a leadership role. Finding opportunities for purpose that can develop into future roles is an important variable to keep in mind as you plan for the next stage in life. “You have to find things that you have a passion for and where you can make an impact,” says Brun de Pontet. “Serving on other boards is a great path to continue to have an impact and really be able to provide some insight and experience for other businesses.”
Get involved early
Too often, retirees don’t plan and get blindsided. The more time you spend planning for your future the better. Adequate time enables smooth succession and lets CEOs find purpose in other pursuits. Invest in the networks you have and be proactive about this process when you reach the senior management level, long before you begin to transition away from the day-to-day job. You might seek opportunities that can carry over post-retirement, such as serving on the executive committee of a trade association or on a company board for a term limit in order to obtain a variety of different experiences without being overloaded.
“Folks who have experience serving on boards outside of their own family company board gain that credibility and experience that is valuable while they are leading their enterprise,” says Brun de Pontet. “That makes it an easier springboard for them to have those doors open to them as a path for purposeful engagement.”
Become a mentor
Take the wisdom and experience that you have developed over the years and share that with developing professionals. “Being a mentor means that you are supporting them in their own career path,” says Brun de Pontet. “You have to accept that if you provide suggestions and advice it may not get taken.” Serving as a mentor in the family business requires setting additional boundaries and tempering your advice so as to avoid unintentionally minimizing the authority of your successor.
Understand all the losses
Retirement comes with significant losses — loss of title, position, power, routine, support, et cetera. Take the time to understand the potential losses and how they might impact you and your family. “It is very easy to lose sight of how much of your day job intersects with all of your daily routines,” says Brun de Pontet. A practical issue often overlooked is the need for administrative support to pay bills or plan travel logistics as well as a workspace at your house or office. Setting up an office at the family business can cause some confusion around leadership if you don’t set adequate boundaries.
Take planning seriously
Retirement impacts the entire family system. Many families struggle with how to address how it will affect the dynamic within a marriage. “If you’ve been very involved working to develop the enterprise, you and your spouse have developed other spheres,” says Brun de Pontet. “You haven’t had a lot of bandwidth to spend together because you’ve both been busy in other worlds.”
It’s important to have a conversation about your vision for the next stage of life whether that includes more travel or time at home together. Many couples are uncomfortable with this conversation and the strain that it puts on the status quo in their relationship. “People spend more time planning their wedding than they spend planning their retirement,” says Brun de Pontet. “Your retirement is hopefully 20-plus years of great opportunities that are part of this new phase of being an active contributor and thinking about where and how to best make contributions in your community.”
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