Just recently I asked an entrepreneur, approximately my age, about his plans for the future of his company. When did he plan to retire? He immediately answered that he was too busy thinking about this; his business was – after the recent crisis – rapidly growing and thinking about long-term issues was not on his list of priorities right now. His aim was to “rebuild” the company, increase the turnover and especially the margins, all of which were seriously damaged over the past few years. “Besides,” he said, “I am not that old yet, only 59, and my energy levels are as they were in my thirties.”
This is typical for family businesses nowadays. Businesses earned a lot of money in their early days, but since they had to dig into their reserves during the crisis, they are now trying to rebuild and make the company grow again. All of this takes so much time and attention, that management and owner(s) hardly take any time to think about the future further along.
Rethinking the future on a regular basis is always a necessity, though. The world changes, customers change, technologies change, politics change, people change. New challenges require new or at least adapted roadmaps for the future. New roadmaps require new and different actions, and perhaps new leadership, management and support.
And, indeed, leaders should think about their successors and about handing over the business in a couple of years. This is a process that takes time when done properly. A process that even in the short term might be necessary to revive the company. It requires an early start, and a CEO of 59 still sounds like a young guy, but he isn’t.
Determining an “exit strategy” starts with – again and again – evaluating possibilities, scenarios, options and alternatives. How and when? Is the answer simply to “sell it”? If so, to whom, when and how? If no, it starts with evaluating whether family members might be capable and willing to take the lead sooner or later – this requires a lot of honesty.
Or if not, and this might be a very emotional but nonetheless realistic scenario, who else? Do we have already somebody waiting in line? Or if not, when to start finding and attracting him or her? And then, what should their learning process look like? Should it take place inside the company, or (partially) elsewhere as well? What steps have to be taken in order to make the eventual handover happen? What are the financial, legal, fiscal, regulatory and other restrictions? How to involve employees? How to involve other stakeholders?
All these considerations require a sense of urgency and belief in the current leader, that there will be a moment in time where he has to hand over responsibility. Probably sooner than he might want to accept. Accepting this is not only a rational but very much also an emotional process. Letting his “baby” go and accepting that the future might be different with different leaders, different strategies and different challenges. The company is changing, because the world is changing. And that moment will come faster than expected! It might even already be here. Hopefully, it’s not already too late. Be aware, don’t start too late, be prepared and start acting. Good luck!