18 Apr Succession: When Should You Call it a Day?
“The final test of greatness in a CEO is how well he chooses a successor and whether he can step aside and let his successor run the company.” Those deceptively simple words are from Peter Drucker, the father of modern management, whose ideas continue to influence the way we think about business. His quote hints at a paradoxical aspect of family business: A leader’s most important work is to prepare for a time when they will no longer be leading.
A lot of succession advice seems to focus on assessing and developing the next generation. But senior leaders also need to have a plan for how and when they’ll move into a phase of life after the business. And since there’s no such thing as mandatory retirement from a business you own, the decision has to come from you and be initiated by you.
We close out this succession series with the most challenging question of all: When Should You Call it a Day? Here are three guidelines that might help you know when the time is right.
When You Want to Leave a Legacy
One of the best ways to put your stamp on the future and make a contribution to the next generation is to prepare them to lead. Ultimately, this means letting go and allowing successors to ride the two-wheeler on their own. Unfortunately, some leaders stay on too long, and instead of leaving a legacy, they end up hurting it. When the kids can keep the bike upright, even if they’re still a little wobbly, it might be time to call it a day.
When You’re Overshadowing Successors
It’s incredibly difficult to turn over the reins you’ve held for decades to other people. But the longer you keep yourself in the CEO seat, the harder it becomes for the next generation to develop the skills – or respect – necessary to lead the business. While your experience is valuable, your continued operational involvement can signal a lack of confidence in your successors. If you’re casting such a long shadow that the new shoots aren’t getting any sunshine, it might be time to call it a day.
When You Keep Moving the Goal Posts
It’s often been said that succession is a process, not an event. This is especially true of the aspect of succession that involves a leader’s decision to step away from the business. Develop a transition plan with milestones so that you move through a process of spending less time in the day-to-day of the business and more time creating a satisfying next phase of your life. If after you have a plan, you keep changing the goals or dates, then as tough as it is, it might be time to call it a day.
Many steps are necessary for a smooth transition to the future. In fact, we’ve talked about quite a few of them earlier in this series. Developing organizational systems to increase business value, preparing for your financial future, grooming next generation leaders, squaring away your estate plans – each of these elements are strategic and challenging in their own right. But none compares to the complex emotions that arise when you contemplate handing over your life’s work.