A big chunk of Canada's family firms will be dealing with the retirement of their founders in the next five to 10 years. Will these individuals, who formed the backbone of their businesses, have different exit styles? Research suggests they will, and that some approaches are more effective than others.
Ride into the sunset
These are the individuals that retire gracefully, excited about life and the opportunities that lie ahead. They tend to become ambassadors for their enterprises and take pride in the success of junior-generation leaders, continuing to be available to assist without being overbearing.
Not on your life
Others want to die in the saddle, and they will only leave kicking and screaming when health or other unfortunate circumstances force them into retirement. They tend to despise the idea of giving up long working hours, frustrated with a sense of emptiness. This is the first generation of business owners in history experiencing good health into their 70s, and it's creating a succession backlog, with two generations often waiting in the wings. Even when these younger leaders finally take over, a lot of founders wind up shadowing them. They can be found 'at hand,' chiming in with their opinions on decisions made by their successors. It's no good for the family or the business.
Learn from the past
Research conducted at Concordia University's John Molson School of Business reveals that leaders of progressive entrepreneurial family firms focus on what they are retiring into, rather than what they are retiring from. They make provisions to ensure continuity of the lifestyle they have become accustomed to. And, most important, they have a plan for their time - tasks they can devote themselves to, which can be a mix of mentoring, educational endeavours, travel, community and family activities. An ambassadorial style of retirement is healthy for the individual, the family, and the firm.
Special to the Globe and Mail
Dr. Pramodita Sharma teaches at the John Molson School of Business at Montreal's Concordia University.