Wednesday, June 2, 2010

Is There Life After Retirement?

It seems a lot of times that half our mental effort goes into trying to figure out how to make sure that the business continues after we're gone. Whether it's due to an untimely death or retirement.

We, like so many small business owners, find that there's a troubling discord between our goals as baby boomers and the goals of our Gen Y staff. We've generally been happy performing the same tasks day after day, year after year, and buildng a successful firm. The question becomes with Gen Y is how to create a challenging and engaging profession that provides constant opportunities for growth from a profession dictated by standards and regulations.

Our main goal has been to build a firm that will still be around after we're gone and is able to provide us with a financially secure retirement. This goal is dependent on future generations being able and willing to continue a business in which we have invested a better part of our lives.

A recent article interviewed a baby boomer and a Gen Y to have them describe their current goals for their profession. The baby boomer was practice growth, client retention, business continuation, and similar issues. Gen Y was hours - how to work fewer hours. We believe in both.

Firm growth and business continution while working the fewest hours possible. We see that as not being lazy but being innovative and creative. Accomplishing both goals is impossible without technological innovations such as the paperless office or being creative with practices and procedures. Many ideas fail. Some even create more problems than they solve. Those bad ideas get scrapped and the search continues on.

Ultimately it's up to the individual to find ways to grow and learn and not work 100 hours per week. It's up to the individual to present innovative and creative ideas to managers and partners. These are the ideas that will accomplish both goals. But the ideas have to go beyond reducing time on any individual engagement. The ideas have to be firm wide. Eliminating inefficiencies, finding growth opportunities (personal and company), discovering new areas of expertise - all of these should be the goal of both the baby boomer and the Gen Y. Otherwise, it's just a lot of years and a lot of hours performing the same mundane tasks.

Business continuation should be a long process often taking years to accomplish. The transition from one generation to the next involves planning and creating a method by which the identity, personality, and integrity of the company is maintained with little or no impact on the clients or customers. Finding the right people to take the business into the next generation of owners and managers is key. Hiring the right person is just a building block on the foundation of business continuation. Hiring an existing owner/manager is expensive and can potentially be counterproductive if their management philosophies are so ingrained they are incapable of conforming to their new role. The ideal situation is to create an owner/manager from scratch with their training being on a parallel track with the business continuation plan.

Whatever the situation, a plan should be developed, agreed on, and implemented by the owners several years prior to the departure of any owners. Areas covered should include the type and qualifications of the people to be hired, benchmarks for staff educational and professional development, buy-sell agreements, staff compensation and stock purchases, and many others. The goal must also be well defined. When and how do the partners desire to transition out? Finally, take the kick and hope you make it between the goal posts.

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