Why Can’t You Just Retire Already??
Some of us count down the days to retirement, some of us have our retirement perfectly planned out, but others especially family business owners tend to dread the idea of retirement. This can sometimes be difficult for family members and especially the next generation successors to understand, but there are several reasons why retirement is often a scary subject for many founders. First of all, there is the loss of identity. A founder’s identity is intensely tied to the business. Retiring for founders often feels like they are losing a part of themselves and this can be very difficult because they don’t know who they are without the business. There is also the fear that the founder’s retirement is being put at risk if the company is not properly managed. There is also the question of whether the founder will be able to sustain the same lifestyle and this is often a major cause of stress.
As a family business practitioner, I believe it is important to accommodate the definition of retirement as each founder sees it. Experience tells us that most founders don’t want to retire and the next generation needs to accommodate this in order to give comfort to the founder.
I have clients in their 90’s that still go to work on a regular basis, I am not 100% sure what they do all day, but the one thing that is certain is that they are highly appreciated by those around them. This can work as long as an arrangement has been made between the founder and the next generation successors.
Another common issue with respect to retirement is the loss of control. Founders are used to being in control. They have often controlled the business for 20 – 30 years and at the same time were often in control of the family. The fear resides in the idea of losing that control and how family, friends and the community will now perceive them. This loss of control also contributes to the fear of not being ready to retire and essentially leaving their retirement in the hands of someone else.
An elderly family business owner told me that his 2 children were not ready to own and manage the company until they were ready to open and close the shop everyday. I called his 2 children to inquire and they told me that they were more than willing to open and close the shop, but the issue was that there was only one key and their father refuses to duplicate the key or lend it to either of them. It became clear that even if the 2 children wanted too, they really couldn’t open or close the shop. It was obvious to me that there was something bothering the owner. All the fears I mentioned above, along with the uncertainties of the future of his business and his 2 children, were keeping him up at night and keeping a firm grasp on the key. Once all of his questions had been answered and the uncertainties and family emotions dealt with through a detailed succession plan, which focused on the family component and included Family Business Rules and Guiding Principles, he was finally able to let that key go.
Family business practitioners can help alleviate these fears and guide founders through the succession process by giving them the proper tools to make informed decisions. This process is often put aside because there are too many unanswered questions or because there are too many emotions involved.
In the world of family business it is often cited: “The final test of greatness for a family business owner is their ability to let go!”