Does your version of retirement involve a gradual exit? What are you doing to engage the next generation of leaders?
The business landscape is constantly changing and something I am seeing at the moment is less of a willingness for business owners to sell up and have a traditional retirement.
My version of retirement is you are at a point where you can do whatever you want, whenever you want to do it. i.e. if you’re still in business it’s because you love it and wouldn’t have it any other way. What I’m seeing is a trend where owners want to hang on to their business, but scale back their hours. So why are business owners hanging around longer? I’ve seen the following among many others:
- Hard to find buyers
- Can’t be passed on through the family to the next generation
- Don’t want to walk away from what they have built
- Legacy – don’t want to see business suffer under someone else
- Love what they do
If you want to scale back your hours but retain your business, you’re going to need to identify, motivate and build up the next leader(s) – preferably someone who can take the business to a higher level. It’s not usually easy, but why should it be easy when the reward is so great? You will need to relinquish some control and if you really get this right, you might need to deal with your ego when your successor takes the business beyond where it is today.
Finding the right successor is becoming more difficult in a time when workers are more transient than ever before. Once you identify a potential successor you must ensure that your goals are aligned – taking your business through succession is a big exercise and not one that you want to be starting again in two years if you find that you’re not aligned. Once aligned, you can build the road map for a successful transition. In the early days of the succession, one of the most important things is to ensure that you are doing all you can to promote the right behaviours and outcomes from your successor – this is usually done through clear KPIs, effective bonus and share schemes.
Having your successor working at their absolute best is key to making this a success and that requires strong motivation. Your successor needs to feel that you are on their team and want them to succeed. They need to believe that if they hit their targets, the rewards will be triggered. They need to feel respected. They need to be not merely satisfied, but motivated to achieve. Any leader looking to get the best out of their successor should research the following:
- Victor Vroom’s expectancy theory;
- Abraham Maslow’s hierarchy of needs and;
- Frederick Herzberg’s motivation-hygiene theory.
There needs to be give and take to make this a success – it should be win-win. Among the other facets that need to be considered in order to achieve an effective succession are roles and responsibilities, expected outcomes, upskilling the successor, governance etc. It does take effort to get it right, but if the outcome is you get to do whatever you want whenever you want, doesn’t that make it all worthwhile?
If your Future of Choice involves keeping your business but working less, what are you doing to make it a reality?