MORE THAN JUST 'YOUR FINANCIAL FUTURE'

Pacific Life Insurance, the one with the whales in its TV commercials, asks the question “Are you prepared for your retirement years – twenty five or more of them?”


Of course, being a life insurance company the focus is on ‘Your financial future.”


Twenty five years of ‘retirement’ is a long time! And it’s a likely probability for a lot of baby boomers. And there’s more ahead than just the financial part. There’s your life - life after you, a business owner, sell your business!


Many, business owners have retained their financial and legal consultants to plan their financial future. That’s a good thing. It has been estimated that as much as 70 to 85 per cent of many business owner’s net worth is in her/his business. So it’s smart to have a plan to harvest that investment from the business and move it into a personal portfolio.


We all know of business owners who have no vision for life after retirement. So they just hold on to their business. They have no plans for the next phase of their life so they just keep doing what they know. They can’t move on! Instead of going out on top, they ‘stay when they should go,’ suffocating the business they built, that, in turn, sucks their personal savings back into the business to keep it alive.


It doesn’t have to be that way. In addition to having a financial plan, every business owner needs to plan for their personal future – their next phase – and for the future of the company without them.


The challenge is to think about their company and themselves as separate entities and to develop a transition plan, in advance, for each to go their own way. That’s more than just their financial future!


In future articles we’ll explore the non-financial elements of your future as a business owner contemplating retirement.

TRANSITION - The Next Phase of your Life

Business owners – and other executives – often have a difficult time retiring or making the transition out of their current role into the next phase of their life. They ‘keep on doing what they’re doing’ because they get great satisfaction from their work – and, unfortunately, because they have no idea what else they what they could do.



Often, their financial advisors have helped them prepare, financially, but they are not ready, emotionally, to take that next step into the next phase of their life.


Daniel Pink in his new book “Drive” introduces some fascinating ideas for managers who want to be better leaders and developers of their staff. Looking deeper, his ideas provide clues for business leaders who are contemplating their personal work-life transitions. Here, briefly, are Pink’s keys to motivation:

• Autonomy – “Autonomy over task (what they do), time (when they do it), team (who they do it with), and technology (how they do it).
• Mastery – Becoming better at something that matters. “Challenges we face are uniquely matched to our abilities.”
• Purpose – Working on ‘a cause greater and more enduring than ourselves.’

This approach, rather than the ‘carrot and stick’ method, is what brings out the best in people and produces better results, according to Pink.


I believe that these were what business owners searched for when they made the decision to own a business. They may not have been aware but, as some subconscious level, they were looking for a work situation that would give then independence to follow their passion, build on their strengths and have control over what they do – to have autonomy, mastery and purpose in their life. Income potential was important, too. They may have expected to make more money but many business owners made a decision that to ‘go out on their own,’ even if working somewhere else would pay more.


But there is a downside to their thinking. Business leaders stay when its time to move on. For the same reasons they decided to start, they can’t let go. They hold on for too long – when it’s time to step aside and let new people lead – younger people with more energy, a willing to take risks and use fresh approaches to match new challenges. The company they created begins to decline, eroding their investment when they need to be ‘harvesting’ it to build their retirement nest egg.


The trouble with retirement is that it is viewed as an end – when a person stops doing something that gave meaning to life, and sees doing ‘nothing’ for the next 20 or more years. That’s not something to look forward to so they ‘stand pat.’


I prefer a process I call ‘Transition.’ Transition involves planning ahead – discovering what about life (in work and elsewhere) gives great satisfaction and build those factors into a new lifestyle – one they can look forward with optimism and enthusiasm.


What’s the key to making a successful transition? Finding something new that offers you fulfillment and a feeling of satisfaction. Daniel Pink’s three motivational factors: Autonomy, Mastery and Purpose are a good starting point.


Transition begins with choosing your new life purpose – and building it into the next phase of your life. The key questions is: What will you do that merges your passions, your strengths and an opportunity to serve to live a life that is meaningful and satisfying to you?


Maybe it’s an unfulfilled dream or a hobby. Maybe it’s for money – maybe it’s not. Maybe its full time – maybe its something that you do at a slower pace that matches your energy level while giving you time for other pursuits; exercise, reading, gardening, family, travel, etc.


Purpose is not just a hollow kind of ‘doing nothing.’ Purpose is something that is distinctly ‘you.’ Choosing it will take time. It’s important to start planning long before you leave your current work. I have worked with clients who took several months to sort things out and make a personal, lasting decision that best suited them.


Autonomy and Mastery evolve out of a clear purpose. Your purpose guides your decisions about what you will do, how you will work, and who you will work with. Over time, you will build on your unique skills to develop the mastery you need to achieve your chosen purpose.


What is there about your current life that excites you, that you enjoy and can build on to create the next phase of your life? How will you create your future doing something that gives you satisfaction and enables you to build a special combination of personal Autonomy, Mastery and Purpose?
What is your personal transition plan? I help business owners develop their work/life transitions into the next phase of their lives. I can help you. Contact me to set up a complimentary session to explore your options.


pkwendel@aol.com – 716 434 8688
www.peterwendelgroup.com

LETTING GO OF WHAT DOESN'T WORK

A couple of days ago, I tried to fix a leaking faucet that was keeping me awake at night. I worked on this kind of faucet many times so I was confident I could fix it easily. I got the right parts, right tools and went to work.

Everything came apart without a problem. I nearly had it back together when I was stopped dead. I couldn't put the cap back on! I tried a whole bunch of times but couldn't finish the job.

Finally, I gave up and walked away in frustration and disgust - and a bit of anger. What should have been a half hour 'piece of cake' was an incomplete project. What made it even worse was that the sink was the one that Janie, my wife, uses. A bad situation! I didn't want to leave 'broken' for long.

So the next evening, I tried again. In two seconds, I realized my problem and after trying something different - putting two parts together in the opposite sequence - the thing went together like clockwork! I was done in five minutes.

It reminded me of trying to solve algebra problems in high school. I'd come to a point, get stuck and, no matter how times I tried, I couldn't solve the problem. Later, I'd come back to it will an open mind, not trying to solve it the 'old' way and solved it in a flash.

I don't do algebra anymore but the lesson is still there. Sometimes when we get struck trying to solve problems the same old way over and over, we make no progress and get frustrated. The key is step back, forget the old approach and try something new. Often that's all it takes to be successful - think about the problem with a 'fresh' approach.

That same lesson applies to other parts of our life, too. Remember the old saying "If you keep doing what you're doing, you'll end up with what you've got."

This is true in planning your life transitions whether a new job, a new career or retirement. When you are moving into a new phase of your life, the odds are that what worked in the old situation won't help in the new. Difficult as it is to do, you have to let go of what you've been doing and do something different.

You have to let go of your old assumptions, old rituals, old methods, sometimes even old relationships to move on.

What kind of change do you want to make in your life or your work? What isn't working that needs to change? Take some time, choose what you want to create, let go of what you're doing now and try something different.

The future will be different than the past. It can be a step forward if you, like me fixing the leaking faucet, try something different.

MORE THAN JUST FAMILY BUSINESSES

I find it interesting how many times, when Succession Planning comes up in a conversation, that subject immediately focuses on family businesses. I was interviewed by a local business journal and never mentioned family business in our conversation but, sure enough, that's all was talked about in the article! Even my comments were edited to relate to family businesses.
True, every family business needs to have the transition from one generation to the next fully thought out well in advance.

The senior generation has to be prepared to let go and move on.

The incoming generation has to be prepared to assume the reins.

The company has to be organized to execute the transition in an effective, seamless manner.

The legal and financial programs need to be in place ready to be implemented at the right time - often over a period of time.

And all this has to happen for non family businesses, too! In many ways the issues that must be addressed are the same - except the family businesses may have to deal with more emotional issues.

All succession planning involves the senior generation members acknowledging their mortality and making plans for moving into what I call the 'third phase' of their life. Staying in a state of denial can rob the company of any potential to survive and proper into the future.

Most owners want their company to continue on. That also means identifying and developing the future leaders well in advance of the time for the transition to actually take place. In some instances, it may mean recruiting new future potential leaders (and owners) if the current people don't have what it will take.

But, when the 'next generation' was never developed, an internal sale isn't an option. Then, sale to an outside party is the better answer. And sometimes the external sale can generate more retirement income for the seller.

In every transition, family or non family, the challenge is to work out a myriad of details well in advance of the 'event.' More on that later.

The bottom line - whether a family business or not, developing and implementing a successful transition takes time, planning - and a will of the current owner to let go of the comfortable present to move into the different future.