Planning for a future outside of work is something we’ll all need to do eventually, but the binary concept of moving from employed to retired is not as simple or straightforward for business owners.
Complicated by a number of factors, some financial, but many, emotional and social, a business owner leaves not just a role but a way of life, and many will need to separate their identity from the business they’ve built to make room for a transition.
There is much at stake through the process of transitioning leadership, including the value created from years of hard work and the future of stakeholders integral to the business’ success – your family, employees and customers. But less than 47 percent of family businesses have turned their mind to planning for a transition.
Primarily, many feel that they are not ready for retirement – there is no legislated or normalised age at which an entrepreneur should step aside. However, that’s the not the only reason family businesses fall behind in planning succession. Others include:
- a need to be able to feel secure in their own, and their family’s future
- a sense of losing control and not being able to manage their own destiny
- dealing with unfinished business.
Managing these feelings takes time, and many fail to develop the mindset necessary for the transition to occur. In order to secure the future of their business, owners need to deal with and react to change, and pivot accordingly – skills that are critical to entrepreneurship.
For business owners to best anticipate change and plan for transition, they should consider:
- Being an active participant. Treat change and transition not as something that happens to you but something that you can own and control. Being able to remain the key decision maker in the manner and means by which your own transition occurs increases confidence in the transition process.
- Becoming a gardener. At some point, what you’ve created has grown into something with its own life. How can you nurture new growth?
- Becoming a great coach. Accept that all players have to retire some time and many become better coaches than players. Experience accumulates with age, converting that experience to knowledge empowers family business leaders to become great coaches.
- Helping explain ‘why’. Assist in instilling a purpose for the organisation and, by implication, help future generations to carry on your legacy. Successful businesses run smoothly – everyone knows what the business does and how it does it. Family businesses that last for generations also know the why and being around to help emphasise what that means can be integral to future success.
- Being available but not visible. At some point, you need to have the presence to not be present. Any transition will inevitably have new people playing senior roles, and you’ll need to work out how to be there without being seen. Your successors will benefit in the confidence knowing you have moved on, yet are still around if needed.
By deliberately thinking about your, and your business’ future now, you can take the first steps towards transition.
Change might not be easy but being the change is easier than being changed.
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We investigate how Australian family businesses have navigated the past 2 years, and what challenges they face.
How Australian family businesses navigated the past 2 years and the challenges they face.