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From my hands to yours: retirement as self-renewal

Barbara Murray is director of Family Business Solutions UK.

Passing on the baton of responsibility is not easily achieved, particularly as demographic changes are intensifying the time pressures felt by senior and junior generations to plan their successions. Barbara Murray explains the importance of legacy and preparation

Society is getting older, and we are told to expect there to be 25% more people in 'elderhood'. Since people are living longer, there will be more people in their 70s, 80s and 90s than ever before, who will naturally want to enjoy extended careers. So will successors have up to 20 more years in the queue?
 
Earlier in the adult life-cycle, we have mid-lifers who will, in addition to a commitment to continuity of the family enterprise, aspire to having different lives than their parents. They are likely to retire earlier – in their 40s or 50s – from their main employment (first career), and may move on to second and third careers, and other activities, which offer the prospect of a healthier work-life balance. So will there be a shortage of successors?
 
These demographics suggest the family business world may be heading into either a succession log-jam or a succession vacuum – we are not sure which, but giving the ageing population, both seem to be possible and probable. If seniors spend too long working on their legacy, transitions will be blocked and lose their momentum. If juniors do not believe they have the space to make their mark and reach their own potential during the mid-life years when they can feel the drive and motivation to do so, transitions will fail and other continuity solutions sought.

These outcomes have been affecting family business continuity and the survival statistics for as long as we have records of family business activity – but we may witness it on a new and unprecedented scale from this point forward. Smooth successions will become even more elusive because the key prerequisite is to have senior and junior generation candidates commit to a plan with key milestones set by an adult development drumbeat, not the financial or personal wishes of the individuals concerned.
 
This is the first of two articles examining generational transitions from demographic and developmental perspectives. The focus is on elderhood and what seniors in business families experience as they deal with their own ageing agenda during transition in the business. An understanding and appreciation for what life is like for society's next dominant age group is needed. The second article, which will appear in the next issue, focuses on the perspective and experiences of the mid-life generation, aiming to understand the agenda specific to their stage in life, and their views on events during times of business transition.
 
Mine is the perspective of a mid-lifer who has observed and worked with family businesses for many years. Through helicoptering above each case over a long period of time, it has been possible to see people's lives evolve and to watch transitions unfold and run their course. I have also seen my parents progressing through elderhood, and realised how unexpectedly tricky the transition from working to retired life turned out to be for them. As their retirements progressed, they have made decisions about how they wish their affairs to be attended to, and have been dealing with health issues and physical decline, alongside an almost transcendental shift in their philosophy of life, generally getting rid of the complexity that they can no longer deal with, and taking a much simpler view on life.
 
No one relishes getting older but we need to create a story or script of some kind to handle the change in identity, in our roles and in our physical condition. In this script, we want the protagonist to be successful and happy with his or her life, relishing challenges and enjoying whatever life offers. Creating a script like this requires imagination and time to reflect and plan. One case study below describes the steps being taken by a fourth generation senior to construct such a script and bring it to life; in the other case study, though, the founder is unable to embark on self-renewal and insists on delivering the ending in his original script.

The seniors' tasks
What do family business elders think and feel at their stage of life? Is their experience of elderhood any different to anyone else's? I think the answer is yes. What can be done to help? Everyone in the system, especially the senior generation couple, can learn what to expect and what steps to take to be better prepared. Family businesses force the blending of love and work, (the two principal life purposes in Freud's view), leading to the enmeshment of the lives, careers, finances and dreams of those directly and indirectly involved. Psychologist Frederic Hudson has created a detailed framework showing the main purposes and challenge accompanying each decade of middle and late adulthood. The work – in a developmental sense – in the earlier stages of elderhood (the 50s and 60s) is about self-renewal and creating new beginnings. The work of the 70s, 80s, 90s and beyond is about reflection, creating a legacy, mentoring and accepting physical decline. By adding the family business context to this framework we can see that family business seniors who are unable to start planning the renewal of their lives in their 50s and 60s can end up seriously "out of synch" during their 60s and 70s. This then affects the lives of next generation successors in mid-life who rely on openings being created to make the space for their mastery of competence.
 
Seniors out of synch
Life seems much more complicated for family business seniors because their lives are an enmeshment of emotional, legal, financial and commercial arrangements. Making changes to this life structure, which is the primary task of the 60s when trying to create a new beginning, is therefore fraught with the complications of disentangling structures and dealing with the consequences these bring on others' lives. If, as we shall see in the first case study, the right frame of mind was not developed in the 50s, it is even harder to do the work. Staying put may seem the easier option, but it is dangerous for seniors to miss out on the work of this stage completely. The unfinished business is likely to then cause even more problems in the 70s, leaving people overwhelmed with tasks for which they are too tired, feel under-prepared or lack resources.
 
Unless seniors are able to deal with letting go of some powers and investing time and energy in putting some of their affairs in order during their 50s and 60s, a bottleneck will be created in the system and it will be harder to do this work later in the 70s. This helps us to appreciate why some succession transitions get stuck or become painful journeys marked with frustrations and blockages until something in the business gives or someone (in either generation) gives up.
 
Power of planning
Christopher Oughtred has been planning his exit as fifth generation chairman of William Jackson and Son bakeries in the UK for the past eight years or so. He created a five-year plan, currently entering its fourth year, during which he set milestones and targets for key aspects of his succession solution. The next generation are being assessed and prepared. The business has been streamlined, and he had been developing a post succession plan for himself and his wife, as well as his 'next career'. Now 53, Christopher started planning early and was able to sense the time/age co-ordinates required to synchronise his own departure with the creation of readiness in the successor generation.
 
Compared to many seniors in thriving family businesses, he is going relatively early, but in his view "the younger a person is when passing the baton, the more constructive the process is likely to be – probably because there remains unlimited opportunities for achievement and interest in other areas. The early to mid-50s are probably ideal. I remember members of our fourth generation who soldiered on into their late 70s and became frightened of life after work – probably because there was so little else to look forward to."
 
Part of the legacy Christopher is forging will be a break with the soldiering on tradition, instead creating the option of letting go for succeeding generations. He says: "From a business point of view, the new ideas, energy and dynamism comes from younger members of the corporate team, be it family or non family members. So why not give them a chance?"

For families in business it seems there has to be some core – which acts like a magnet, powerful enough to unite the different parties and their different self interests – keeping the system aligned while it works on making the transformations or readjustments required for the future. Otherwise, the system would break down under the developmental and commercial strains it has to cope with. The most powerful factor is the leader's forging of a legacy and the belief of the successors in the worth of this legacy. If both generations believe in the legacy, it creates the foundation for the resilience needed for dealing with the resistances and setbacks that often hold back succession.
 
The legacy stands for the culmination of a life's work, and at its strongest can be a visceral force attracting and motivating those to it who wish to be associated with its glory and who wish to take it forward. And to the extent that it is achieved, it allows the creator, or donor, to gain satisfaction and personal peace from its attainment. For Christopher Oughtred, the commitment to forging his legacy started as he settled into middle adulthood, between the age of 40-55, when the question "what legacy am I leaving?" came into the foreground. In his experience, "planning the legacy can be as satisfying as running the business because it is equally as constructive and retains all the initiatives with the planner. It is also likely to satisfy the reviewing instinct of those at mid-life, and be constructive". If, as in the case of William Jackson and Son, the business is several generations old, then he feels "the 'weight' of the legacy to be passed on will be greater and so should be the satisfaction to the planner".

Christopher's words and deeds are in tune and in synch with Hudson's life chapters model. Taking the perspective of a multigenerational time-span, he sees himself as the fourth runner in a relay team now passing the baton to the fifth generation recipients. This succession may have been absorbing his time and energy for years, but in reality it is one marker in a long timeframe.
 
The next case study shows the different experience of a founder. The founder's dream became a script that influenced key decisions in every one of the founder's life chapters. The case has to remain anonymous, but nevertheless provides a vivid illustration of the effort that the founder of a large UK business in the electronics industry made over the course of his lifetime in pursuit of his dream (see box, opposite page). It highlights the frantic efforts he made in his 60s and into his 70s to follow the script, converting his dream into a legacy that would let him feel peace – most of the time the expense of relationships within his family. His own father died at the age of 66 and this ­created for him a race against time (he set many deadlines starting with the intention of retiring with sufficient wealth at 40, but this was the final one) by which time he wanted to be able to sit back if he survived and know his work was done. Each year was marked with business and/or family crises during which the founder's commitment was severely tested. At 70, he was able to look back and say he had achieved his dream of leaving his family financially secure, but getting there had tested relationships among his offspring – the legacy beneficiaries – as well as with his wife, who felt her family had suffered a great deal along the way.

Lessons for seniors' life stages
The blending of family and business, love and work makes it harder to separate out the issues involved and the tasks to be done. Christopher Oughtred's view on the timing of the exit is based on the old adage "if you're going to go, get out at the top", and that those in power will find it easier to move while the initiative is theirs, rather than wait until the initiative passes to others and the senior is pushed out. There are three areas in the case studies that resonate with Christopher Oughtred's experiences, and at the same time could help the people whose journey is similar to the founder's in the second case, with some practical ideas on how to go about the developmental work required in the 50s, 60s and 70s.

First, appraising one's outlook on ­getting older begins in earnest in the 50s. In Oughtred's view, "being happy at home as well as at work is clearly a precondition of a constructive passing of the baton". Courage is needed at this stage of married life to ask a pivotal question: "If a family business leader is not happy at home, what does it take to change this?" There may be a recognition that the marriage enterprise has been neglected in favour of the family enterprise, and that the day of reckoning has come. The couple need to talk, share their dreams and views, then invest the time and effort needed to agree the path together. Having help to do this can be a boost for both partners.

A second area for work helps in the transfer of the legacy. In Oughtred's family business, retirement is taken seriously at all levels. Christopher states that William Jackson and Son offer their staff "pre-retirement courses, stressing the importance of interests, the "get up and do" approach that provides a long and happy life after work rather than a short and lingering one."

Courses may not be enough, though, and in these cases a third area Oughtred recommends for action is for seniors to gain "external reassurance about their thinking, their plans and proposed line of action". Oughtred says that knowing when is the right time to go is "probably a gut feeling – you know it when you feel it – but scientific research is needed to back up that gut feeling." He advocates either having a mentor or seeking counselling firstly to help confirm the gut feeling, and secondly, to "provide confidence, independently, and reassurance for planning. If you can lead a family business successfully for 10 or 20 years", he says, "then there is probably not much in life that you can't set your hand to. However, it is quite reassuring when someone independent tells you this".

As society ages it seems likely that there will be additional pressure on every decade and chapter in late adulthood for self-renewal, as people enjoy longer, healthier lives. Leaders in family businesses in their 50s, 60s and 70s have long been faced with this challenge, added to which they are locked into a complex web of structures and agreements in which they are largely the dominant figure. A different outlook is needed about the important work of forging a legacy and about the timing of milestones to be passed in the transfer of it. Becoming more attuned tothe passage of time engenders the urge to set mental deadlines, which lead to planning milestones. An awarewness of timelines of doing this work is a key sensitivity. Without this, some seniors may not be able to deny themselves the highs of operational leadership, preferring to stay harnessed to their dream, and in so doing can create setbacks in the succession process.

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