Strive for Business Independence
Whether retirement is just around the corner or on the horizon, you have dreams for how it will be spent. Maybe you want to gradually reduce hours in the office or work full time right up to retirement age and then have little to do with the business. Either way, you must be prepared to hand over the reins at some point.
While no one likes to think about it, sometimes the transfer of power isn’t a choice. An injury, longterm illness, or family emergency happens without warning so it’s never too early to select and prepare your successor.
Regardless of the reason for transition, you must complete some preparatory work before you can become independent. Much of the work you have done to improve the business also serves to free you from it. As you have developed systemized processes and gathered a motivated staff, the daily business operations have increasingly become less stressful and more predictable. The business is well managed, production is efficient and reliable, and employees know what is expected of them. If you are out of the office for a few days, you are confident that everything is in control.
Will this best-of-all-worlds scenario remain when you step out of the office for weeks or begin retirement? Before you can step away from the business, you must be sure that its success can be sustained. Much of this will depend on the leadership selected to replace you. The leadership will need your same level of commitment, common sense, vision, people skills, etc. This doesn’t mean the leadership should be an exact clone of you, but the leadership should reflect the skills and personality you brought to the business.
Once you have the right leadership team, will they hire the best managers? Will they know how to increase the client base? Will they know how and when to expand the business? How will you know when it is safe to put the business on “autopilot” and take some time for yourself? There are ways to be out of the office and still remain active in the decision process. In fact, it is best that you practice handing over the controls to your leadership team before you retire. As you gradually relinquish leadership responsibilities, you can determine how well the leadership will eventually assume full duties.
Let the Management Team Manage
The typical owner has a split personality as related to work—part visionary, part manager, and part production operator. Most likely, the owner was good at producing something, managed the details, and then saw the opportunity to begin a business. This can make letting go of the business three times as hard. Each part of the personality has to relinquish control. The speed at which you break free is up to you, but with a good management team in place it will be easy for you to begin to gradually give up control. And do it from a distance - like the Bahamas, Arizona, or the local golf course.
You will want to turn your management responsibilities over to a small core team of your most trusted managers, including one who you have identified as your successor. Not every manager should be a part of this team unless the size of your business dictates it. The management team’s job is to develop and guide the management strategy, not the rest of the managers.
Key items for the team’s consideration are:
- Company vision
- Company strategies
- Operations policies
- Pricing changes
- Major financial and procedural decisions
- Long-term plans and budgets
- Management-level hiring decisions
Until you choose to step down, you are the owner, CEO, and team leader. As such, you have the final word in the team’s decision process. Even though you hand-select the team that most represents your goals and vision, there can be power struggles.
Establish ground rules from the team’s inception to nip problems in the bud. For instance, get a complete buy-in from each member so that everyone participates to the fullest. Maximize a member’s skills. If a member is the most knowledgeable about operations, make sure this person leads any project involving operations.
Be open and honest with each other, but require confidentiality outside the meeting room. Many notions the team shares never turn into reality, yet employees are quick to run with rumors. This could easily disrupt business and destroy morale.
The management team should follow the Leadership Life Cycle to create, develop, and implement strategies. An active life cycle will help keep the business in tune with the market and economy. In other words, it will stay alive and well.
At Holt Marketing and Management Consulting, we teach the skills necessary to reaching a degree of independence. First, you will learn how to stay focused on the strategic vision through the twists and turns of your business. Second, you will find out how to improve your successor’s leadership skills while improving your own. Third, the value of loyal customers will be recognized as a key element in your strategic vision. Fourth, the specifics of the autopilot mode will be explored, including how to measure your company’s ability to fly solo. And, saving the best for last, you will set your personal time/retirement goals into motion.
Once you have established the ground rules, you will want to foster team spirit, learn more about Team Building Here.
If you have any questions or comments, please feel free to contact us here. What our your thoughts on the Leadership Life Cycle? Does your Organization have an Exit Strategy in place? We welcome your answers and any comments in the section below.
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