25 Jan Succession – Are You Ready?
The old adage says that death and taxes are the only certainties in life. This is very much apparent for family businesses. The prospect of neither is pleasant – neither can be avoided.
It can be very uncomfortable to raise issues of aging and mortality with our loved ones, but it is a necessary conversation. This is one of the very themes I touch on in my new book, Texas Patriarch – A Legacy Lost. Planning for the future and laying the groundwork for the day when one is no longer around – this can be a very daunting exercise for successful entrepreneurs to engage in. Many leaders labor on into their older years under the illusion that they are immortal. The drive that fueled their rise can very often be their downfall, keeping them at the helm past the time of their peak leadership abilities. They simply can’t quit.
There is nothing inherently wrong with staying on in a leadership role into your advanced years – Warren Buffet, for one, is still definitely going strong. However, it is important to consider how age affects our leadership and our aspirations, as well as important to consider what is going to happen at the helm down the road. Very late in life, my father was still in charge and doing some big deals. He unwittingly put too much stress on himself. His priorities had simply changed. By the end, he had subtly but surely shifted his mindset from a wealth creator to a wealth distributor. He was more concerned about taking care of his family and friends – which is very commendable, don’t mistake me – than in growing a great business.
The very idea of asking someone to consider exit planning and whether he or she has reached the time to step aside is difficult. But this is a conversation that business owners are remiss not to take seriously. My advice: get some help from an outside neutral.
Helping guide older family members toward enriching challenges can help ease the strain associated with letting go of one’s role. Maintain an appreciation that for many entrepreneurs, their very sense of identity is inexorably linked to their role at work. Walking away from that can be very hard on the psyche. Many hard driving CEOs would be reluctant to hang up their spurs only to putter around the golf course.
A potential bright side of this challenge is that many of us have altered our perceptions of what retirement will be – and how we can stay fulfilled in our golden years. Americans increasingly want to continue to contribute and remain engaged even if they have transitioned away from traditional full-time employment. Consider exploring ways that older family members can remain engaged – serving in an advisory or counsel role can be a win-win for everyone. The business can continue to benefit from their hard earned wisdom and experience, while also bringing in fresh blood to provide new perspectives on challenges faced by the business.
What have your experiences been in helping older family members transition out of full-time employment?
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