Developing An Exit Strategy… Or Not

Years ago I read the following in an article on succession planning in a magazine called Financial Planning:

“Sitting on charitable boards is activity, but it is not necessarily work. Not all post-succession activities need to be aimed at generating a concrete result. But for many business-leading clients, results are all that matter. Having spent a lifetime in energetic pursuit of results, few business leaders will ever eagerly enter an existence that involves no productive labor. That’s why planning for a long-lived business requires planning for the leader to have some meaningful work to do after leaving the firm.”

What stands out to me is the last sentence. Read it again. In particular, the last four words of the last sentence are especially intriguing… “after leaving the firm.” The implication is there is an assumption that a business owner/leader is going to retire and leave the business at some point.  Considering the work I do with family owned companies as a succession planner, I believe this is one of the most difficult aspects of preparing for next generation leadership. Many business owners have the mind-set that “I will die slumped over my desk in my 90’s and they will carry me out on my shield.” Or, even worse, “I’m never going to die.” Just for the record, the mortality rate among human beings is high. Personally, I’ve struggled with understanding this and I’ve spent a great deal of time (probably too much time) studying it and thinking about it in an attempt to understand it so that I can be more effective in what I do. I believe that one of the most significant factors negatively impacting effective succession plans is business owners who do not leave.

Business founders have lived passionately creating an organization filled with employees that they have inspired and that inspire them. They are surrounded by people they have grown to love in an environment where it feels like their employees and the business are loving them back. The business has become the object of their love. Developing other people and watching them grow out of comfort zones and into business leaders themselves, can be very rewarding and create intense loyalty. Often the family members of these business leaders enter the business for a variety of reasons, one of those perhaps being an attempt to capture some of that love and loyalty, further entrenching the leader in an opportunity to be surrounded by those who care for them. Why would a business owner want to leave this? Why would a business owner willingly step aside and face the fear of whether people will remain loyal, appreciative, loving for all they’ve done? Who would voluntarily walk away from such a loving, caring environment?

It has been said with regard to retirement that “you need to retire to something…not from something.” Many business owners have poured 100% of themselves into their work, have become obsessed with it, and never developed any other occupation or avocation aside from their work. There is nothing competing for their time and energy. It’s what they know. They are good at it. They feel comfortable, confident, and large and in charge in it. It gets them up in the morning. It keeps them up at night. They look forward to it…and they have nothing else to look forward to. Obsessed by business, it becomes almost impossible to even hold out the baton of succession, much less let someone else grab it and ultimately let go of such power. Sharing the power is not appealing. Those who are successful in passing the baton usually have followed a very strategic process of creating leadership space and developing successors to fill that leadership void. And, perhaps, more importantly, over time have established something else to move toward in their lives.

So, a few questions for those business owners:

• Are you developing a loving, caring environment apart from your business?
• Are you creating leadership space and developing successors?
• Are you establishing other avocations and work with purpose apart from your business?

As a business owner, you have a stewardship responsibility to do this and prepare your business for continued success without you. Don’t allow a total absorption in your business to cause your legacy to vaporize.