Saying goodbye to old friends is tough. Saying goodbye to a business you founded, nurtured and led to success is just as hard.
So, how does one do it? Not very well, I’m afraid.
Letting go is against our human nature of hanging on to anything that has given pleasure and fulfillment. So, when it’s time to retire and hand over the reins of control to a successor there is a tendency to find excuses to hang around to see how everything works out. Maybe we should recruit and hire our own successor so that we can be sure the job is going to be done right. Bad idea.
Why shouldn’t we handpick the one who will take over our job? Several reasons are worthy of consideration. In the first place, we are likely to search for someone just like us. After all, we did such a superlative job that filling our slot with another us just makes good sense. Thus the company is deprived of fresh new ideas that could take it in a new, more profitable direction. Plus, the outgoing leader is just too close to the situation to make an objective judgement about what is needed. Better to let the board of directors, or a search committee, select the new person without too much input from the retiring person.
Many of us also have a tendency to feel threatened by our successor. After all, what’s to say he or she won’t tarnish our reputation or change some of the policies we so carefully crafted? What if the new person is smarter than we are and the employees like him better? Leaving our legacy intact begs that we retain some degree of control over what happens after we are gone. Though hanging on may reassure some departing executives, it undermines the successor’s authority and ability to lead.
At the minimum our successor will need to know our view of how things should be done and how to handle situations that might arise. There is merit to this idea, but keep the orientation speech to under 30 minutes and then move on. It would help everyone concerned if you set a goal to transition out in record time and give the new person a chance to take over and do the job.
A large number of Mississippi businesses are owned or managed by older executives who will be retiring over the next few years. Some will try to hand off the business to a family member, a treacherous and difficult undertaking. Others will sell the business outside the family. In either case, the business’ future will depend on the new CEO quickly and efficiently taking hold of the throttle. Employees must change the way they do their jobs to mesh with the new manager’s vision and expectations. This transition will be easier if they can devote all their energies to retooling their systems and processes to cater to new leadership.
Handing off the business to family members is particularly difficult. Because of the influence of the founder as both company leader and parental figure, the tendency is for the successor to try to anticipate what the predecessor would have done rather than what needs to be done. Risk taking becomes even riskier since a bad decision is not only a business disaster, but a personal failure as well. The success rate for second and third generation succession is dismal.
Transitioning from one leader to another is difficult under the best of circumstances. The new person deserves the opportunity to take control quickly, earn the confidence of the workforce and, inevitably, make mistakes without being under the watchful eye of his or her predecessor.
The best thing we can do for our companies is to set the vision and work hard to achieve the objectives we have set for ourselves. Carefully plan when we wish to retire and adopt a strategy for wrapping up loose ends before our successor arrives and then exit as quickly as reasonably possible. This approach provides the greatest likelihood that the business will survive the transition in good form.
Thought for the Moment — Wear your learning like a pocket watch and keep it hidden. Do not pull it out to count the hours, but give the time when you are asked. — statesman Philip Dormer Stanhope (1694-1773)
Joe D. Jones, CPA, is publisher of the Mississippi Business Journal. Contact him at firstname.lastname@example.org.