When Your Parents Want to Retire
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Roger Neveu, 57, founder of Notch Mechanical Constructors, an industrial contracting firm in Chicopee, Massachusetts, thought he had the best job in the world-until 1998, when he turned the presidency of the company over to his son Steven, 38, who'd been his right-hand man. Now Neveu is semi-retired and working three days per week on an as-needed basis, doing drafting work and operating the crane. "I love what I'm doing. I'm not really an office person," he says. "And these guys [five of his seven children are in the business] are the best at what they do. They seem to do a better job running the company than I did, and I like that."
If you're running the family business with a parent, you probably know the idea of retirement isn't always as cheery a proposition as it was for Neveu. "For people to retire comfortably, they have to feel they've reduced the risks involved," says Ivan Lansberg, senior partner at Lansberg, Gersick & Associates LLC, a family business consulting firm in New Haven, Connecticut, and author of Succeeding Generations: Realizing The Dream of Families in Business(Harvard Business School Press). One of those risks is how competent the successor is. In Neveu's case, he's certain the company is in good hands, so he's comfortable stepping down.
But not all successor generations have as easy a time taking the reins from their parents or relatives as Neveu's kids had. Even Neveu admits that before he actually retired, he had some fear of letting go. "It's understandable," says Laura Michaud, president of The Michaud Group, an Elmhurst, Illinois, consulting firm that helps family businesses improve transitions from one generation to another. "What the successor generation has to realize is that the relatives who came before them are people who loved their work and devoted time to building the company." That's hard to give up, especially if the retiring head doesn't know what he or she will do when not in the office all day.
Lower your parents' panic level by encouraging discussion of life after retirement-long before it becomes a reality. "Generally, people need some help when thinking seriously about their future," says Lansberg, adding that parents don't usually use their children as sounding boards for their fears because "they often talk to others who've made the transition successfully to find out what worked for them and what didn't."
You might encourage your parents to join a seminar group for retiring heads at one of the more than 100 family business centers affiliated with universities around the country, or to take advantage of the many weekend retreats that organizations hold to explore the movement from one's work life to one's life's work, such as those sponsored by the North Carolina Center for Creative Retirement in Asheville.
Patricia Schiff Estess writes family business histories and is the author of two books: Managing Alternative Work Arrangements (Crisp Publishing) and Money Advice for Your Successful Remarriage(Betterway Press).
Staying In Touch
Although your parents might not be willing to discuss their fears with you, they'll likely be amenable to discussing more practical issues, such as whether they want to continue to be involved in the business, perhaps in a day-to-day management situation. If that's the case, there are many roles senior family members can assume after officially stepping down. Many family businesses ask retiring senior leaders to remain as chairpersons of their boards; others enlist them as consultants. Their experience and expertise can be invaluable, especially if they understand that their advice and counsel don't mean they're in charge.
If maintaining their status within the community is important to them, encourage your parents to get involved now so they're in a position to step up their involvement after they retire. "They [just don't] realize how transferable their skills are and how they can build on what they already know," says Lansberg. Assure them that all the knowledge they've gained from running the family business makes them important either as consultants to or on the advisory board of other family businesses, or as leaders of other organizations, including not-for-profits. Volunteering is another great way for ex-owners to use their time. Among the organizations eager for their help: SCORE (Service Corps of Retired Executives), which provides management and professional know-how to start-up and existing small companies, and the National Executive Service Corps, which provides management assistance to nonprofit community-based organizations.
You probably know some of your parents' dreams. You also probably know that because they've been leading the business for so many years, they haven't fulfilled those dreams. Neveu, for example, always wanted to learn more about computer drafting. So he started taking evening courses toward a computer drafting certificate a year before he retired; he recently finished. He enjoys this new skill and says he'll use it to help out in the business during his retirement years. Perhaps your parents have always dreamed of traveling but never had time for it before. Encourage them to start now. If they've always wanted to try something new, like playing the piano, urge them to begin lessons before retirement to see if it's something they really want to pursue.
"It's awkward for a successful business head to start career-planning now," says Lansberg, "but it's indispensable." He says the sharper incoming entrepreneurs are about the alternatives, the better their parents will be able to make the transition. And the better their transitions, the easier it will be for the successor generation to assume leadership.
Further, urge your parents to establish a time frame for the transition-even if the deadline is five years away. That helps reduce the fear of letting go. "And when a person makes a public declaration of plans to family and key managers, that keeps him or her moving toward the transition target date," says Michaud.
Another suggestion is to try "practice runs" at retirement. "Taking more vacations, coming into work four days a week instead of five, or going to Florida for three months during the winter, helps the senior generation gradually make the adjustment into retirement," says Michaud. It also puts their minds at rest that you can run the business successfully, even when they're not there every minute of the day.
|Resources to suggest if the retiring family business head wants to discuss the transition in a structured setting:|
For university-affiliated family business center seminar groups, call the Family Firm Institute in Boston at (617) 789-4200 or go to www.ffi.org.
For information on weekend retreats at the North Carolina Center for Creative Retirement, part of the University of North Carolina at Asheville, call (828) 251-6140 or visit www.unca.edu/ncccr.