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

WHEN WILL YOU SELL YOUR BUSINESS?

Remember the “Parable of the Boiled Frog?” If we put a frog near hot water it will sense danger and hop away. But if we put it in cool water and slowly heat the water, the frog, not responding to the changing conditions, will just sit there till it perishes in the boiling water.



How does a business owner avoid the ‘boiled frog’ fate? Whatever the business, there will be at a time sell it and move on. Making that transition can be a gut wrenching. Planning in advance is essential to making the transition that is effective and low stressful. When should he or she begin to thinking about selling/leaving the company?


There are a variety of opinions about when to start planning. Some say begin planning at start up – put a long term perspective on the process. (Remember the admonition of Steven R Covey in The 7 Habits of Highly Effective People to “Begin with the End in Mind!”) That’s probably ‘a long stretch’ for some people but there is wisdom in the suggestion.


Others suggest that a good time to start planning is during the ‘empty nest’ part of life – when the kids leave home and the rhythms of life change. We realize that the future will be different and there is a new incentive to ‘look down the path’ to a different lifestyle.


Certainly the ‘last chance’ to develop a transition strategy is when the owner is in his or her mid to late fifties. The clock is ticking. The future becomes less certain, fewer options are available and there is less time to execute the transition.


Let me give a personal perspective. For 32 years I worked in a business started by my Dad. During my time with the company, I guided it through a cultural and organizational metamorphosis to become the largest locally owned consulting engineering firm in the Buffalo – Niagara region. By then, I had developed new interests and it was time for me to move on. After five years of planning, I made the decision to sell my ownership in the business. It probably would have taken longer but my partners – the next generation - were in place and ready to buy the business from me. That business, now called The Wendel Companies, has continued to grow and is extremely successful. I didn’t retire. I made my life transition and formed the Peter Wendel Group. I know I made the right decision. As the saying goes, “The rest is history!”


The point is that a business can’t be sold unless the owner is ready to sell. The world is full of companies that ‘died on the vine’ because the owner hung on too long and ended up having to have a fire sale of buildings and equipment. There was minimal value left in the business itself.


A successful sale begins with a personal strategy. Developing that personal strategy is best done over time. For the owner to be ready to sell and move on he or she must have addressed a wide range of issues:


“I will sell my business when…….”


“I have a clear vision of what the next phase of my life will be – I have chosen my future lifestyle to achieve my vision.”


“I have chosen a lifestyle for the next phase of my life that has purpose and will give me fulfillment.”


“The next phase of my life will generate the level of income I need to supplement the income from the sale of my business.”


“I will sell my company to my partners, associates and family members” or


“I will sell my company to an outside buyer.”


The moral: the business will change over time. If the owner doesn’t sense the change, he or she will stay there too long and lose the chance to ‘get out when the time is right.’ They become a boiled frog!


What is your personal transition plan? Is it time to start planning? I help business owners who want to develop their life/work transitions into the next phase of their lives. I can help you. Contact me to set up a complimentary session to explore your options.

Pete Wendel
716 434 8688
pkwendel@aol.com

THREE RETIREMENT STRATEGIES

In my work with business owners, I encounter three strategies for dealing with ‘work-life transitions’ – often called retirement.



The first strategy is to ignore the problem and just keep on working – even after they have lost their ‘edge,’ their passion and their energy. They don’t have an alternate lifestyle to move into so they just keep doing the only thing they know. They stay too long and suck the life out of their business, significantly reducing the value of their equity in the process.


Then, one day, they’ve ‘had it.’ Without much prior planning, they quit – maybe because of poor health or because the business is failing and is no longer sustainable or they just ‘burnout.’ They have no idea what they will do next or what will happen with their business. They sell the business when they have to, instead of when the want to, maybe for ‘pennies on the dollar.’ And the life they are left with is empty, sterile, and directionless. They struggle between meaningless activity and boredom.


There is a second, special kind of people who successfully keep on working: artists, writers, some attorneys and others who work independently, without an organization to support them. Their value is their personal work, not the organization they lead. ‘Living their passion,’ they do it as long as they can, often into their 80s and 90s. For example, Peter Drucker, the prolific management writer (over 30 books) and consultant remained active, albeit in a somewhat diminished role until he died at age 95 in 2005. For him, his work and his passion were one in the same – to work is to live.


The third group follows a different strategy. They plan ahead, thinking ‘transition’ long before the time when they will leave the business. Even while still actively working, they regularly step back from the day to day operation of their business and begin to plan for the next phase of their life. Ultimately, they leave on their own terms.


This third strategy could involve starting a new business, take a new role in their original company or working somewhere else. Or they might work with a cause for which they have a great passion. This life of service gives them great pleasure and satisfaction -– giving them ‘psychic income’ while providing a much needed service. And they have time for personal/family pursuits.


There are several of keys to planning a successful departure from the business:

• Choosing the ‘next phase’ of their life,
• Building a sustainable, saleable business,
• Deciding whether to sell internally, to partners, associates and/or family members, or externally to an outside buyer,
• Fully withdrawing their investment before giving up control.

This whole range of decisions depends upon the owner's personal decision to ‘move on’ with their life and the personal transition strategy he or she develops to make the move. This personal decision becomes the basis for all subsequent decisions.


All this takes time – often several years. So it’s important to start early. Waiting too long can severely limit a person’s options both for himself and for the business.


The moral? Start thinking about the next phase of your life and regularly block out time to make choices about how you will create a meaningful, fulfilling life after your work/life transition.


What is your life strategy? What thought have you given to your future? What will be the next phase of your life – after you transition out of your business? What are you planning for the future of your company after you move on? When is that last time you took time to give this serious consideration? What are you going to take some more time to do it again?


I work with business owners who are contemplating retirement. I can help you. Contact me to explore your options and develop a plan for your future. Call me by April 30 and our first conversation is complimentary.

Retirement Challenges Every Business Owner Must Face

Dilemma: A situation involving a choice between equally unsatisfactory alternatives.

Sooner or later, all business owners will face a time when they need to make decisions about their future – specifically their retirement. They love what they are doing but they recognize that ‘things are changing’ and they have to change, too. They want to stay but know they must step aside. They face two dilemmas.

One dilemma is the choice between staying with the business because they love what they are doing versus holding on for too long and stifling the company’s future, dragging it down, and burning up their personal net worth (retirement income) in the process.

Another dilemma is the choice between selling internally – to family, partners, staff – expecting to leave a legacy versus selling to an outside buyer, generating more retirement income but giving up hope for having an impact on the future of the company.

Resolving both dilemmas depends upon the selling owner making strategic decisions well in advance of the time when he or she must begin execution.

The issues are both personal and business related but the beginning point is personal. The seller’s personal decisions will provide the framework for the business decisions that will follow.

Both dilemmas are difficult to resolve unless the owner is willing to make and execute choices - to look forward, to create a new life that is as equally attractive and potentially satisfying as running the business. I call that “Building a boat to step onto before walking off the dock.”

Over the next several articles, we will look into these two dilemmas and explore strategies for business owners to resolve them – to make their “Grand Transition” into the “Third Phase” of their life.

RETIREMENT PLANNING FOR BUSINESS OWNERS

Next Tuesday March 2, Pete Wendel will be the featured speaker at the Niagara University Family Business monthly breakfast. His subject is "Business Owners - Are you prepared to retire?"
In this session he'll explore factors to consider in preparing yourself and your business for a successful transition into the 'Third Phase' of your life.
Successful transition is a long term process. Questions covered will include: Have you planned a meaningful life after work? Will your business continue? Will you be prepared financially?
.
There are a limited number of openings available for guests. To register go to www.niagara.edu/fbc. There is no charge.

BRETT FAVRE AND YOU - WHAT'S NEXT?

Thoughts about Planning your Exit Strategy

A few years ago, Brett Favre retired as the long time quarterback for the Green Bay Packers NFL football team. Apparently he wasn’t ‘prepared’ for retirement because a few months later he signed with the New York Jets. This season he joined the Minnesota Vikings and led them to the conference championship game.

When Favre went through his “I’m retired, I’m not retired” turnaround, I wrote about it, drawing an analogy between him and lots of business owners contemplating retirement. Now, at forty – he’s the oldest quarterback in football - he will soon face the same situation once again. It’s only a matter of time before he retires, voluntarily or otherwise.

You, a business owner, will someday be facing the same challenge. You’ll be asking similar questions like “How will I retire?” “When is the right time?” What will I do with the rest of my life?” And others like “What do I do with my business?” “How do I get my money out?”

Unlike Farve, whose focus is primarily personal, yours must be in three areas: Financial, Business and Personal.

One presumes that Favre is set financially. With the help of your financial and legal advisors, you are addressing this. (You are, aren’t you!?)

From a business standpoint, the management of the football team has planned for the team’s continuity. Indentifying and developing their next quarterback, along with players for other positions, is one of their responsibilities. Continuity of the team is not part of Favre’s MO.

Business continuity is a challenge you and every business owner must address to assure that you can withdraw your investment from your business to your personal investment portfolio. Whether you sell internally, to your partners, family and/or staff, or externally, to outside buyers, you need to develop an exit strategy. That strategy will determine your transition plans. To successfully implement your plans it’s important to start early. It’s a long term process.

Probably the biggest challenge, whether to Favre or to you, is the personal side. Favre is ‘only forty,’ probably with more than half his life ahead of him. But he may have no choice about when he retires – the team management may make that decision for him.

You can expect a life after ‘retirement’ of twenty years – maybe more. You have control over your timing. It’s your business. But if you hold on too long you may see your business – what you worked so hard to build – wither away, diluting your investment as it goes.

In both instances, Favre and you, the key is to rethink ‘retirement.’ It’s not the end. It’s a ‘transition’ from one life style to another. I hope that Favre, after his retirement dilemma of a few years ago, spent some productive time building his ‘new life after football’ so that he has something to move into, to look forward to. I call this “Building a boat to step into when you walk of the dock.”

What about you? It’s important to start early making personal and business decisions that weave together financial, business and personal factors to create a transition that assures a meaningful, fulfilling life, provides adequate income to live it and, if you want it, leaves a successful, ongoing business as your legacy.

It’s never too early to start planning your transition. How about today?

EVALUATING YOUR POTENTIAL SUCCESSORS

A key factor in planning for your retirement (what I call your transition) is being confident that the people who will succeed you have the 'timber' (aka the ability, passion, knowledge etc.) to lead your company into the future.

Choosing and developing them is one of your challenges. It's an obligation you have to your partners, shareholders and other staff members.

If you fail, all the rest of your work in building a sustainable organization will have been wasted. You will have failed in leaving your legacy.

Many leaders and owners pick their potential successors based on erroneous assumptions about 'What it takes' to be a leader. They incorrectly assume that loyalty, longevity, good technical competence, being a family member, etc. are the best criteria to use.

That's what it takes to be a good 'Number two' - a good 'doer.' That MAY qualify then to be good managers - this is not what it takes to be a leader. There are relativly few people who can lead.

What's the difference between a good manager and a good leader? A recent article in the Wall Street Journal is a good reference.

You may have lots of good managers in your company. And you'll be lucky - or brilliant - if you have surrounded youself with several people who have leadership potential - the qualifications to lead the company after you step aside.

THE BOTTOM LINE; take a long, hard look at the people around you.

Identify those who have leadership potential and focus on grooming them. If you don't have what you need, start searching - outside your company NOW. And stop wasting your time trying to make your good managers into mediocre leaders!