What to Do when the Boss Wants to Retire

There has been a great deal of conversation regarding the labor shortage in the manufacturing community, and by now most are aware that this is not a problem unique to industrial America ― there are shortages in everything from transportation to construction to health care. An issue that doesn’t get quite the same attention is the labor crisis at the upper management level. This is becoming just as acute as the baby boom generation slides towards its peak retirement years. Every day there are some 10,000 boomers calling it a career, and the vast majority of those are in upper management or are owners in that generation. There are tens of thousands of people facing the succession issue in the very near future and few have a good plan in place.

There are essentially four issues to be addressed before an executive or owner can comfortably and confidently retire. The first and most obvious is how they can exit with financial security. Can they have the retirement they seek without selling the company, or does it need to be put on the market? If there is a desire to leave the company in the hands of a son or daughter, there has to be income enough for them and the original owner. If the desire is simply to turn it over to a worthy replacement, the same
considerations apply.

If the company is to go on without its former boss, are there people trained to run the business, and do they know what the original owner knows about the process, the customers, and all the other nuances of running a company? If the company is going to be sold, is there enough information to arrive at a fair valuation? It is very common for people to think the company is worth far more than it is―especially when the departing owner is a key part of the business and will not be easily replaced.

Finally, are there provisions for what that retired executive or owner wants to do later? In the vast majority of cases the former owners and managers really don’t want to leave the company behind altogether and would like an ongoing but reduced role. What is that role, and how does one stay out of the way of the new generation of bosses?