Entrepreneurs and business owners often face a difficult truth as their retirement age approaches—their businesses may not be able to function without them. If problems arise even when they just take an afternoon off, calling it a career and letting someone else take over feels like an impossible dream.
Reality: The vast majority of businesses can thrive without their founders, but achieving that takes some smart planning and a change in mindset. The business owner must stop being the business’s hardest-working employee and instead become its biggest shareholder. If someone owns shares in Ford, he/she receives dividend checks and occasionally offers input by, for example, voting on who should serve on the board of directors. What that shareholder doesn’t do is drop by the factory every morning to bolt bumpers onto F-150s.
Making this shift from employee to shareholder can feel irresponsible at first. It isn’t—this transition is exactly what businesses need from their owners, whether or not those owners are eying retirement. Why? When business owners behave like employees, it greatly reduces the odds that their businesses will survive without them or even reach their full potential with them. When a single person makes the business’s every key decision, that person creates a bottleneck that inhibits growth.
Also, stepping back from day-to-day operations is the best thing an entrepreneur who is not yet ready for retirement can do for the nation’s economy. Only a tiny percentage of people can successfully launch businesses. The most productive role for these rare and talented people is to get a business up and running…then hand over control, freeing up their time and attention for future business-launching opportunities.
Entrepreneur coach and small-business author Mike Michalowicz explains how to reshape your company so it can function successfully without you.
Business owners who hire employees to share the workload frequently discover that their burdens don’t lighten even as their payrolls expand. These business owners tend to blame their employees for this, thinking they must lack initiative or work ethic. The real problem: These owners never truly delegate any responsibility. Their employees don’t feel empowered to make decisions, so they ask endless questions, creating interruptions that eat up the owner’s time, throttle the business’s growth and guarantee that operations will grind to a halt whenever the owner isn’t available.
What to do: As a business owner, you must not just allow but require employees to make decisions. To do this effectively…
Push decision-making power back at resistant employees. The first few times you ask an employee to make decisions, that employee might come back with questions to encourage you to make the final call—these employees fear being blamed if their decisions fail.
Don’t back down—when an employee asks questions that really are attempts to avoid making final decisions, answer his/her questions with questions that turn the decision-making back at him, such as, “Well, what do you think?” Step in only if an employee seems headed toward a decision that could have truly dire consequences for the company.
Support employees’ decisions regardless of results. When you blame an employee for a suboptimal result, you undermine that employee’s willingness to make future decisions—and potentially other employees’ willingness to do so as well.
Instead: Debrief employees after the results of their decisions are in. Praise them for making decisions even if those results are disappointing, then discuss how things could be handled differently next time. Example: “I’m proud of you for taking the lead on this project. Now let’s review the results. What are your ideas about how we can improve the outcome next time?”
Don’t confuse “the way we’ve always done things” with “the only right way to do things.” Employees must have the freedom to come up with solutions that differ from those that you, as the business founder, favor. Without this, they aren’t truly empowered to make decisions at all.
Record and share the systems you’ve developed. Your knowledge can serve the business even when you are not present—you just need to transfer this knowledge to your employees. At many companies, this process involves time-consuming training sessions that must be repeated with each new hire and/or drafting detailed manuals.
But there is a more efficient and effective solution—you can simply record yourself performing tasks, then share these recordings. Depending on the type of task, these recordings might take any one of three forms…
Use screen-capture software to record tasks performed on computers. This software typically allows users to also record voiceover to help explain what’s happening on screen. Examples: Screen-capture software options include Loom (Loom.com)…Screenpresso (Screenpresso.com)…Tango (Tango.us)…and TinyTake (TinyTake.com). Each has a free version.
Use a smartphone’s camera to record videos of physical tasks. Perform the task on camera while verbally describing any less obvious details to viewers.
Use a smartphone’s audio recording function to record verbal tasks. This is a good way for you to share your techniques for business phone calls of various types, for example. Share these recordings with employees…encourage them to ask about any aspects of the instructions that they find unclear…then make a second recording that covers these details more effectively.
Once an employee seems to be performing a task properly, ask him to record his own version of the how-to instructions. Watch this recording to confirm that the employee truly understands…and keep an open mind about any refinements or improvements he adds. Reminder: Have at least two employees master each task to reduce the odds that you will be sucked back into performing the task if one employee quits or takes time off.
Take a month-long vacation. Many business owners will question whether they truly can do this. It might not be possible now, but if you transfer your knowledge and empower employees to make decisions, you should be able to take this vacation in just 18 to 24 months.
A month-long vacation is a crucial test—most businesses engage in all of their key functions at least once a month. A business that can thrive for a full month without you is on track to thrive without you for the long haul. Select a month-long stretch that’s approximately 18 to 24 months in the future for this vacation, then…
Let employees know that this vacation is on the schedule. Express confidence that they will be able to run the company effectively.
Begin handing off tasks and decisions. You don’t need to hand off everything immediately…but set a deadline that the company will be capable of doing everything without you by no later than six months prior to the month-long vacation. Helpful: Business owners have a function even after all tasks and decisions have been handed off—big-picture thinking to design the company’s future.
Take a one-week vacation about six months before the month-long vacation. Do not make contact with the company during this week. If the four-week vacation is a trial run for retirement, consider this week a trial run for that trial run. Conduct a debriefing with employees upon your return. What went wrong? How can it be fixed?
Don’t make any near-term contribution during the week immediately preceding the month-long vacation. Spend this week in the office but focused entirely on long-term planning. Don’t contribute to day-to-day operations during this week to confirm that the company can survive the following month. If significant problems arise during this week, don’t just help employees put out the fires—work with them to determine how they can handle similar emergencies on their own.
Review key metrics after returning from the month away. What, if anything, went wrong? Seek solutions to these problems so they won’t recur. Example: My company’s revenue dropped sharply the first time I took a lengthy vacation. At the time, one-third of the company’s income came from my public-speaking appearances—no me meant no public speaking fees. I trained other people to give my keynote speech, and now public-speaking revenue comes in even when I’m out.