Family businesses are so important to our local communities, country and world. Seeing how universities, journals and seminars have been focusing more on how to successfully sustain private and family-held businesses has been gratifying. Significant work has been done to help NextGens transition effectively in the business. However, one area that has seen less attention is how to help the legacy generation successfully transition out of the business and into the third phase of life. This, of course, is another term for retirement.
Many years ago, Jerry Foster, our financial advisor, did a workshop with my husband and me on how to prepare for the third phase, focusing on intentionally preparing for retirement. We loved the concepts and proceeded to share his book, Small Changes, Big Results, with a group of friends and eventually with team members at Vermeer who were planning to retire within the next five to 10 years.
Traditionally in business, we focus on financial wealth as we prepare for retirement. However, there are four other critical areas of wealth that we should be preparing for: relational, physical, spiritual and intellectual. So often, when individuals get ready to transition out of a CEO or chair position in their respective companies, they have not fully prepared in all of these areas of wealth. Too often, individuals have lost health or family relationships and may have failed to nurture any other interests outside their working lives. If we are intentional prior to retirement on improving all areas of wealth, we enter retirement with positive momentum. By focusing on just a few action steps in the five areas of wealth prior to the third phase, it can put us in a more positive place once we get to retirement. In other words, small steps that can achieve big results.
Examples of questions to ask for all the areas of wealth include:
Financial
- Do I have an investment strategy?
- Do my partner and I both know how to locate key documents and account passwords?
- Do we have a giving philosophy and strategy?
Relational
- What relationships are we committed to for the long term?
- Are there broken relationships that need to be reconciled?
- Do we spend enough time with our treasured friends?
- In a partner relationship, do we know our partner’s emotional, physical and intellectual needs?
Physical
- Do I have a hobby that I enjoy?
- Can I improve eating or exercise habits?
- Do we laugh enough as a couple and family?
Spiritual
- Do I know what my purpose in life is?
- Am I passionate about service to others and to a higher being?
Intellectual
- Are there new skills that I want to learn?
- Am I spending time in activities that I don’t enjoy or can’t do well?
- If I could do anything and knew I wouldn’t fail, what would I do?
Throughout our lives, we experience three distinct phases, or stages, of life: foundation, framework and finish. The foundation phase is roughly our first 25 years of life. It is a time when our personalities take shape. Much of our character and values are shaped during these early years.
The framework phase is a time of personal growth, working toward our dreams and establishing goals for success. It can also be a phase where we self-impose pressure on ourselves for instant success. It is the time when we focus on career and full-time work.
The finish phase can be the most productive and enjoyable phase of life. It is a phase where you can have greater control of your time, most likely have achieved financial security and have a wealth of life experiences.
The transition between phases two and three can be a difficult one for many of us in family/private businesses. When a lot of our identity is tied to the business, it is difficult to take the necessary steps to transition away from being in charge to a third phase of influence. There has been a lot of research on transitions, which can be messy and are not linear. But this is a skill you can master if you are intentional about facing what you are leaving behind, focusing on what and where you can contribute in the third phase. That could look like mentoring, teaching, board work, charity work or finding entirely new areas of interest and passion that you now have time to pursue.
There are three paths that individuals take in the third phase — indulgence, indifference or influence. They can choose the path of indulgence where it is all about them. The path of indifference is really the default path. Or there is a path of influence. The path of influence is one in which the individual uses their life experiences, passions and connections to live a life of influence in the third phase. It is also a phase of life where we can say “yes” to the things we have passion and interest in and “no” to the requests for committees or volunteer activities that do not give us joy. Once again, it is important to be intentional about which path we choose.
Throughout our lives we bank a lot of experiences, some positive and some negative. When we enter the third phase, it is a great time to use the culmination of those experiences, leveraging the opportunity to capture the wisdom, insight and knowledge gained throughout life. Life lessons learned through positive and negative experiences can be valuable when we are willing to share with others — young parents, young business leaders, family members and those in our spheres of influence.
I have a dear friend who works with young people. In her research, she has found that three questions are so important for young people to ask:
- Who am I?
- Where do I belong?
- What is my purpose?
These are good questions for anyone, at any age, including those of us entering, or in, the third phase. For those of us in the third phase, or legacy phase, of life, be intentional about planning ahead for how the rest of our time can be filled with purpose, joy and influence. By being intentional, we also give NextGen leaders the space to successfully lead in the family and private business.
Mary Andringa is chair emeritus of Vermeer Corporation.