Don't leave a successful business to an unprepared successor. Picking the right person — and creating the right environment for them to lead — should be the most important parts of your plan.
In 2011, the oldest baby boomers reached the traditional retirement age (65), and through 2029, about 8,000 boomers will reach that milestone every day. This aging of America will result in a significant shift in mature industries and businesses.
As boomers reach their golden years, many of these leaders, who've worked hard to build their businesses, will choose to leave them — hopefully in the capable hands of younger family members or colleagues who've been trained to step into their shoes. Yet many of these same leaders are either actively or passively resisting making formal transition plans, failing to ensure that both loyal employees and clients will be taken care of beyond the owner's tenure.
Defining the problem
The process of selecting and retaining a successor is one of the most critical areas to address in determining the long-term vision and sustainability of your business transition. Beyond possessing the technical expertise necessary that will lead to success in your industry, it is essential to attract the right talent that fits your company's unique culture.
So the question then becomes: How can you share your passion for your work with members of a younger generation to encourage them to become a stellar leader in your company?
And, as importantly: What are you willing to do to ensure their success? It takes vision, generosity and patience to be willing to mentor someone and prepare them to be a successor to your business.
While clearly this process can be complex, the essential factors that I have found are needed to successfully engage younger generations are twofold: an understanding of the generational differences in work values and style; and a willingness to create a synergistic team approach that allows for inclusiveness along with the individual's growth and development.
Generational perspective differences
The biggest obstacle to baby boomers working with members of the X and Y generations is a misunderstanding concerning the goals, values and work ethics of individuals in this age group. It is important to keep in mind that each generation is shaped by uniquely different cultural, political and economic conditions resulting in varied approaches to dealing with their world. Understanding the context of this difference can help in the communication gap between generations.
In previous articles I articulated key areas to consider to work more effectively with someone on your team from a younger generation. First, you must understand that younger generations crave meaning in their work, but they require different communication from boomers. It is not enough to explain the “what” and “how” of a choice — you must show them the “why” by clearly communicating the meaning behind it.
Next you must not misinterpret their wanting to work smarter, not harder, as an indication that they don't care about their work. However, Generation X and Y not only multitask better, but tend to focus on work/life balance and having fun — often creating a chasm with the values and perspective of boomers. It's important in your discussions with them that you not judge, but rather adopt a “learner” attitude. The key is asking relevant questions to understand their beliefs and what motivates them.
What constitutes a great team?
Armed with this knowledge, there are two challenges you face when creating a team that will lead to a successful transition: identifying the right individuals whose attitude and skills are aligned with the goals and values of your business; and creating an organizational environment that will foster the growth and development of individuals on that team.
The key to being an effective business leader is to understand what those critical elements are that form a great team and drive results.
Consider the following five “people” factors, which I've found differentiate great teams:
Trust — team members must know they can count on each other to get the job correctly done, and if challenges crop up, they'll have each other's backs;
Respect — team members must have self-respect, as well as mutual respect for other team members' abilities;
Communication — team members must have both the skills and format to communicate openly and honestly with each other;
Passion — each team member must be driven to accomplish the team's mutual goals;
Commitment — all team members must have the same values, values that dictate doing what it takes to complete projects at the highest level of execution.
Once the right people are in place, the organization must be structured in a way that allows them to be successful. That means they should have:
A clear set of objectives;
Metrics that allow team members to assess their performance;
Decision-making authority to reach goals;
Team-based rewards and evaluations — not individual incentives;
An open culture where communication and differing perspectives are encouraged.
Baby boomer professionals who expect to retire within the next decade or so have a responsibility to look toward the future if they want to ensure their businesses thrive after they're gone. Reaching out to individuals in younger generations to share the passion for your work, along with creating an environment in which they can flourish are the critical initial steps in developing an effective transition plan to ensure the future of your business.
Denise P. Federer, Ph.D. is founder and principal of Federer Performance Management Group. She has 27 years of experience working with key executives, business leaders and Fortune 500 companies as a behavioral psychologist, consultant, coach and trainer. Contact her at: [email protected]