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Facing the Fears of Retirement
"The day you retire, you're finished - you're dead." This simple, widely believed statement was uttered often by a 77-year-old business founder even before he came out of retirement and took back control of the firm from his son. For many, retirement from the business they built seems a matter of life and death. No wonder so few have the courage or the inclination to face it. This fear of retirement often shows up early in unwillingness or inability to engage in succession planning. We find three prevalent beliefs held by those who cannot conclude - or even begin - succession planning:
" "Retirement scares me."
" "We could lose it all."
" "This business is who I am."
Retirement is frightening. It is a new, uncertain journey - at a time when peace in life is treasured. Personal financial security is a powerful motivator to keep control of the business. The inability to "let go" is even more difficult for those who founded their businesses at a time of unemployment or family poverty.
For many who build successful enterprises, their business is their identity. It is said of one woman business owner, still in control in her 90s, that "work is her oxygen." Some entrepreneurs started their businesses at least in part to prove themselves to former bosses who had rejected or doubted them. We find that they cling to their creations more strongly than most.
For these reasons and others, too many business founders refuse to retire. They insist that only they are capable of running the business. Jealousy or insecurities relating to declining power generate interpersonal conflicts that spoil succession planning or even the performance of potential successors.
If an executive has not quite achieved what he had hoped, he often wants the opportunity to stay in the game. Rather than a graceful transition, the succession process can become a war. The parties to such a combat, however, should remember Winston Churchill's warning to the House of Commons: "If we open a quarrel between the past and the present, we shall find that we have lost the future."
Fortunately, many business owners manage to face succession planning - courageously, openly, and early. And because entrepreneurial succession is perhaps the most critical issue for family-business continuity, we're keenly interested in the makeup and background of those who do.
Our conclusion: It's all a matter of outlook or attitude. Business owners who can plan succession and who can let go don't come necessarily from larger or smaller businesses. They don't come from businesses that are more or less fragile or that require more or less hands-on involvement. They don't necessarily even have more or less qualified successors to whom they can turn over their creations. They just have a different outlook or attitude toward the subject. For them, the glass is half full, not half empty.
?Here are some attitudes about retirement that can help the process:
"There's life after succession." Many business owners have personally observed the unhappy experience of someone else who "died in the saddle." They had a partner or a friend who died young and never had a chance to retire. Or they succeeded parents who couldn't let go, and now they can't imagine imposing that oppression on another generation. These business owners see retirement as a stage in life they don't want to miss.
? "I've got so much I want to do!" We find those who plan succession properly are already eager to do more and different things at a relatively young age - 50 or 55. They are already active in new interests (for example, teaching, politics, another venture, or philanthropy) and are pushing the preparation of their successors so they have more time - full time - for these other activities. They don't retire from their previous work but rather move up to new opportunities.
"There was a business here before me." In our experience, business owners who purchased their firms as part of a management buyout face succession planning more readily than business founders. It seems they recognize that presidents change but the business goes on. As one leader says, "I wasn't hanging on because I was indispensable to the business but because the business was indispensable to me." With that understanding, he found other ways to build meaning into his life and moved on.
Unfortunately, our culture does not provide acclaim for those who make the hard decision to do succession planning, even though so much is at stake. We worship founders, builders, chiefs - but rarely do we read about or cheer those who gracefully and successfully turn their jobs over to their successors. That seems to be an even rarer talent and accomplishment.
Perhaps that is the reason management authority Peter Drucker refers to succession planning as a leader's "final test of greatness." And having passed that test, the leader goes on to new challenges and satisfactions.
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