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The Fourth Commandment Of Family Business Succession: Have A Life Outside The Business

I once met a prominent family business psychologist, and he shared with me a very powerful insight. He often gets called into family businesses to help wIith the family's business succession plan. One of the things he insists on is meeting the spouse of the founder, owner or CEO. If he ascertains that the only reason the spouse has respect for the founder is because of their position, he claims that the founder will likely never retire, as they won’t want to lose the power of the title. Therefore, a seamless business successionwill likely never happen.

Having a life outside the family business is important for so many reasons and especially if you want to have a smooth succession.

A Reason To Retire

Having hobbies, philanthropic endeavors and community activities that you take part in and of course family interests allows you to not be a slave to your business or feel chained to your desk. When the founder or business owner is so wrapped up in the business that they can't separate their identity from it, they'll likely always find a reason or excuse for not stepping away in a timely, seamless way.

Oftentimes, founders are so afraid to step back from their business that they use a variety of excuses, such as saying that their kids or managers aren't ready (even if they’ve been running the business for years), that they're not ready to retire or that they're afraid to step out of their comfort zone.

In his book The 8th Habit: From Effectiveness to Greatness, Stephen Covey wrote, “Retire from your job but never from meaningful projects. If you want to live a long life, you need eustress, that is, a deep sense of meaning and of contribution to worthy projects and causes, particularly, your intergenerational family.” In other words, have great and inspiring interests and projects that will fill you with energy to retire to.

A good friend who's the former CEO of a large family business told me that when his grandfather founded the business, it was predicated on the understanding that before retirement age, the family member in charge would help the next generation take over. My friend decided at age 62 to start the process and removed himself as CEO to become the chairman of the board and help the next generation assume the CEO position.

My friend enjoys his hobbies immensely — he's a community activist, a religious leader, an independent board member for other family businesses, etc. He’s never bored and enjoys his retirement. His outside interests and understanding of the succession process gave him the satisfaction and courage to step away and enjoy his other endeavors as much as he enjoyed running his business. And his stepping away allowed the next generation to move into the leadership role in a progressive and systematic way with his guidance and mentoring.

Opening Yourself Up To New Possibilities

Stanford professor Carol Dweck in her excellent book Mindset: The New Psychology of Success explains that people either have a growth or fixed mindset. So if you say things like, "Oh, I’m just not goo