If you are a business professional of a certain age, you probably have at least one eye on retirement. Your primary concerns may be financial, but if you want your business to carry on while you are enjoying your free time, you may need to take a more active role in preparing for your departure. Here is a guide to succession planning for retiring professionals, so you can trust that the work will carry on and your clients will be taken care of once you are gone.
Step 1: Identify if You Hold a Key Position
The first step to succession planning for retiring professionals is understanding what your company will need to carry on without you. Succession planning isn’t just for business owners or C-suite executives. The more essential you are to your team or business, the more care and attention it will take to successfully transition leadership to the next generation of business leaders. Subject matter experts and even long-term client retention professionals may need to plan for when and how they will step away.
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Step 2: Start Succession Planning Before You are Ready to Retire
One of the biggest mistakes retiring professionals make is waiting too long to tell their company they are leaving. If you are resistant to talking to your employer, it may be because you are afraid you will get fired in the meantime, or you don’t trust your company to treat you well as you exit your career. But waiting too long could be more dangerous. Creating and implementing a productive succession plan takes time. You and your company may need to start years before your sunset date. If you give your employer short notice about your departure, it will make creating and executing a succession plan more difficult and ultimately hurt your clients and the business as a whole.
Step 3: Know Your Timeline for Retirement
Because of this, if you are in a key position, you need to have a clear view of your plan for retirement well before it happens. Emergencies can happen and you may need to adjust, but meeting with a financial advisor early can help you take steps to prepare for a future in which you no longer work 9-5. You should also consider whether you want to retire all at once or wind down your role over time, so that can be accounted for in any succession plan.
Step 4: Create a Succession Planning Talent Pipeline
As a retiring professional, you likely have ideas about who on your team would be well-suited to replace you, or whether the company will need to hire outside talent to take your place. But there may well be members of your team who could step up to take your place if given enough support, training and guidance. A key step in succession planning for retiring professionals is obtaining an objective assessment of the ability and desire of potential successors to take on additional responsibilities. This is especially true in small and family business settings, where succession is often assumed based on factors other than a worker’s ability.
Step 5: Training Your Replacement
It is rare to find a replacement for a retiring professional who is fully ready to take on the additional responsibilities of the new job. You should expect that your successor will need to develop new leadership skills and training to better do the job you have spent years or even decades mastering. Use your successor’s skills assessment to identify places for growth, and then make time in their schedule for them to take classes, attend workshops, or work with a business coach to hone their skills.
Step 6: Transfer Knowledge and Client Trust to Your Successor
As a retiring professional, there may be countless things about your job that you simply know. This may be substantive or procedural. In fact, in many small businesses, entire processes are never written down. Unless you take steps to transfer this “institutional knowledge” to your successor, it will leave the company when you do. Take time to document your processes, and write summaries of key information that can be used as references after your retirement.
Step 7: Monitor and Adjust
The most important thing to remember when creating a succession plan is that it should not be rigid. You need to have enough flexibility built in to allow your successor to grow and develop at their own rate. That means you should monitor their progress and development, and adjust your plans to suit their needs.
Step 8: Transfer Leadership Away from Retiring Professionals
One of the hardest steps toward retirement is letting go of the reins and letting your successor take the leadership position. This doesn’t have to happen all at once. If you are able to transition leadership gradually, it will make it easier for your successor to take on the responsibilities, and reduce the chances they get overwhelmed by the role.
Step 9: Mentorship and Support
If you plan to retire gradually, or have a vested interest in the company even after you retire, you may want to continue to mentor your replacement and offer support when challenges arise. Your competence and knowledge about the company may prove essential to responding to new obstacles, or filling in the gaps that only appeared when you were no longer there to fill them. By maintaining contact with your successor, you improve their chances for success.
Step 10: Sever Any Formal Business Interest
The last step in a retiring professional’s journey is to formally sever ties to the company. If you retain stock or shares in the business, this could continue long after you stop going to the office. You may even include those business interests in your estate plan, rather than divesting during retirement. As long as you own a share of the business, you will still be connected to its success. That’s why retiring professionals have a vested interest in seeing their company’s succession plan succeed.
David Stanislaw is an organizational development specialist with over 25 years’ experience helping businesses through transitions. Contact us today to meet with David.
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