When Is It Time to Turn over the Reins?
Thinking ahead about retirement beyond succession planning
“Some people believe holding on and hanging in there are signs of great strength. However, there are times when it takes much more strength to know when to let go and then do it.” — Ann Landers
What does the future hold?
Much of management is focused on how we help a group of people, an organization — anticipate, prepare for, and shape the future. Looking into your sometimes cloudy crystal ball and making decisions on hiring, markets, competitors and investments which will pay off in the future are all part of your job. In addition, another part of moving forward also deals with your future role as owner or manager of your feed and grain business. All of us think about future scenarios in our role as managers and leaders, but one of the most personally challenging future scenarios is when is the right time for you to give the “keys to the kingdom” to someone else? How do you — can you — step away from something you have immersed your heart and soul into?
This is an extremely important decision — and a very personal one. This issue, we will delve into the timing, mind-set and strategies for helping to make a smooth management transition in your business.
Succession — it’s not just about finding your replacement
Many think that management transition is primarily about succession planning — finding the right person to replace you, grooming successors and making the changeover as smooth as possible. These are certainly important topics, and we have addressed this area in previous columns (“How to Train New Managers: Keep Employees Enthusiastic Today, Grow Tomorrow’s Management Team,” February/March 2013; “How to Recruit Tomorrow’s Managers,” October/November 2012; “Grooming the Next Generation of Management and Planning for Management Succession,” April/May, 2011; “Hiring a New Manager — Where Do You Go From Here,” August/September 1997).
However, we think there is a lot to be said for getting yourself into the right mind-set, and doing things that will not only help your replacement(s) but assist you as well as you approach this transition point in your professional and personal life. Think of this as retirement preparation — even if you aren’t ready to retire fully! Our focus in this column is not specifically on retiring gracefully, but there are some pointers we will pull from experts in that area. The focus here is around critical issues for you personally: How do you decide the right time for a transition, how do you manage this transition inside your business, and how do you prepare yourself mentally for the next phase in your career? All essential issues for you to address as you manage this business-changing and life-changing future scenario.
Why should stepping down or stepping back be considered?
There are lots of reasons why people don’t think about or make decisions about stepping down or stepping back. For some people, working at a less than powerful position keeps them from properly preparing for stepping back or stepping down and setting up their successors for true and lasting success. Others may not trust that the appropriate talent is in place to ensure the firm’s success. Still others may just love the work they do and are simply not ready to step away from something that they have been a part of for much of their life.
As a result they risk jeopardizing their long-term legacy because they don’t ensure the perpetuation of their organization without them. We feel — and the experts agree — that this topic is something which can and should be prepared for and discussed openly. It helps prepare you mentally, and it is comforting from a personal and professional standpoint for your employees to know that this thinking and planning is part of your management strategy and philosophy.
When is the right time?
One of the first questions you may have is when is the best time to pass on your position as owner/ manager for your grain elevator or feed manufacturing business? The answer is there is no perfect time. However, there are numerous things to consider as you make the decision that is best for you and your organization. We will touch on a few here.
What is the financial condition of your business? As good economists we can make the case for more stable or less stable being optimum in terms of timing for making a transition. If you are in a strong financial position and the business is at a place of relative stability, then your new manager may have an easier “go of it” as they begin their new role. If things are less stable financially, then perhaps both you and your new owner/ manager are taking a bigger risk, but there may potentially be more of a payoff for a new manager (in terms of both learning and financial payoff). Note that we are not just talking about being under financial pressure here. If your business is going through a time of dynamic growth, that too presents challenges to new management in a transition — and must be considered as a change in leadership is being evaluated.
Your age certainly comes into play while deciding when to pass on your position. You will need to address what other things you want to do in life. In addition, there is the retirement trade-off of age versus “money in the bank.” How much is enough? You also may want to wrestle with the kind of departure you want. Do you want a “clean break,” a “don’t call me” kind of transition? Or do you want to “ease” out of the business slowly, over time, with an ongoing/ hand-holding input role for you? These are some of the questions that you should think about, and discuss with some of your key confidants/advisers/family.
Of course, another key element of the decision is who will follow you and are they ready? As mentioned above, we have written on this topic before, and won’t repeat those articles here. But, a robust succession plan, that has prepared the next generation, or a clear definition of what you want in your next leader, goes a long way to helping you feel confident about the question of when to make the transition.
Stepping back from the owner/manager position — kind of like retirement
A recent article in USA Today highlights a couple of thoughts we want to delve into. In that article, the author writes (relative to retirement): “You have to establish a new identity, purpose and relationships.” One of the people the author interviewed indicated that “many people prepare a financial portfolio for retirement, but they don’t take stock of their psychological portfolios.”
In fact, Nancy Schlossberg a retired professor of counseling psychology from the University of Maryland, has written two books on this subject, titled: Revitalizing Retirement: Reshaping Your Identity, Relationships, and Purpose; and Retire Smart, Retire Happy. Even contemplating stepping down from a management position may create anxiety — maybe for most of us! You have an established life, an established routine, established relationships at work and established assumptions about yourself and the world — and in all likelihood you are very satisfied with all of the above or you would likely be doing something else already. When you leave that as an owner or manager (or retire as Schlossberg discusses), you “have to establish new routines, new relationships and a new way of seeing yourself and the world.”
Schlossberg recommends taking a good look at three areas, which we think will help with the min-set for management transition:
Your identity: This is what is on your business card and your email signature. Dr. Schlossberg found that one gentleman, who retired as CEO of a Fortune 100 company, had plenty of money for his “golden years,” but said his retirement felt “hollow” because he hadn’t thought about his new identity. Identity is important — it is how you see yourself. We would suggest that this is worth thinking about and grappling with, as it will assist both you and your feed and grain business. Do you really want to move completely into retirement? Will you maintain an advisory/board position in your firm? Will you look for opportunities to consult or find a different, perhaps part-time role? Are there organizations who could use your skills as a volunteer that you are ready to engage with? These are some of the options you should clarify as you work through this decision.
Your purpose/mission: Schlossberg indicates this is related to identity — “it’s what gets you going in the morning,” she says. It is the things you are passionate about. It may take some time for you to sort out, but how does this relate to becoming an “elder statesman” in your business? Think of the identity you want. How can you assist the “new generation” in the best way? Perhaps it is putting pencil to paper and outlining how you would like to be involved, stating the areas you feel you can be of most assistance. We liken this to serving on a board of directors. A board of directors for a firm does not typically get involved in the day-to-day running of a company. They look at things from the “100,000- or 300,000-foot level,” providing broad direction and goals. They help with strategic direction and “outside of the box” thinking. This could be part of your redefined purpose/mission for your business. Or, perhaps you want to maintain leadership in a part of the business, maybe a small but growing subsidiary, while turning over the majority to someone else. As mentioned earlier, perhaps you are just ready to give back as a volunteer and that becomes your passion and mission. Again, there are lots of options here.
Your relationships: When you leave your manager or owner position, you will lose touch with some of the people who were once part of your everyday life — so you will need to develop new relationships. Subordinates now have a new boss, and you have a new title when you communicate with others in the feed and grain industry. You will not be communicating with them as frequently as before, nor in the same capacity. Some of your current relationships are truly positional — they exist because you hold the position you do. Once you leave your position, there is a “new kid in town” and these positional relationships will quickly move to the new manager. You may find this both strange and awkward, but this is the “new normal,” and takes some time to adjust to. You can utilize this change to help reshape your relationships, perhaps by sharing your thoughts, but less frequently, and maybe in a “take it or leave it” sense (as for former employees — your word may not be the “final” one now). You should give some thought to how your relationships and associated engagements/schedule will change with your transition. Your phone may stop ringing for some reasons, and start ringing with new opportunities.
Your value, your time
As your time becomes more your own, there are opportunities you may want to seek out, which can benefit both you and your business. You really need to give this some thought. We talk with people all the time who say they are busier in retirement than they were before they retired. Is that what you and your family want? Giving some thought as to what you want to do, which opportunities you will pursue, and which opportunities you will pass on will help prepare you to set the course that YOU want to pursue.
If you want to engage in volunteer work related to business, we would suggest you consider a group called SCORE (Service Corps of Retired Executives — now known as “Counselors to America’s Small Business), which has over 320 chapters nationwide. This group provides free business mentoring services to firms in the U.S. and is a resource partner with the U.S. Small Business Administration. SCORE might benefit from your background and expertise, and you may find that providing such service may allow you to bring ideas and perspective back to your own business.
Another option some might find appealing is to start a business executives group for your local area. Some larger metropolitan areas have such groups, but many rural areas do not. The purpose of such a group is to provide a “vehicle” for local business executives to share thoughts, ideas and listen to management experts or other speakers on a somewhat regular basis (monthly or quarterly). The key to such a group is finding someone who has the time and interest to help manage and maintain the effort. This is the perfect opportunity for you as a retired executive. Once such groups are started, many business people find them an invaluable source of new thoughts, personal friendships and serve as a sounding board for ideas and solutions to challenges firms face.
Retire? Maybe. Stick Around? Maybe … Weigh Your Options
As we discuss previously, the issue of developing the right mind-set for “turning over the reins” is very personal but needs to be thought through strategically. As when dealing with many managerial activities, it involves both logic and emotion. Our suggestion is to think about the issue, talk to your spouse or a trusted associate about it, observe those whom you think have provided a good example, and then lay out an appropriate strategy to accomplish your transition, if you are at that point in your career. Like many issues, this one needs deliberate thought in a timely way. Putting off the thinking or the needed conversations will likely limit options and delay decisions that should have happened earlier. You have worked too hard and built too much to end your career that way. Make the time to think through and lay out a personal transition plan. You — and your team and family — will be very glad you did.