IT is inevitable that retirement is to come one of the future days.
Either as early retirement or in response to the calls of duty and as an unavoidable stage in the life cycle we should prepare for this development in our living.
This brings into question if our entrepreneurs will one day retire or it’s an eternal journey in safeguarding that which we have started.
Our experience is that most entrepreneurs die with their businesses and in this edition, we look at the retirement journey of an entrepreneur.
To start with, as aforementioned, there is a general misconception that entrepreneurs do not retire.
Even in the smallest of enterprises the founder entrepreneur remains actively involved in the business into their elderly ages.
Prior research has attributed this tendency to failure by most founder entrepreneurs to entrust their vision to other people, especially those younger than them, failure to plan for business succession in most small to medium enterprises (SMEs) as well as failure to establish a strong long lasting brand.
A number of negative effects on the business have been noted by past researchers with lack of business continuity being the most focal (as it has become a norm for an entrepreneur to die with his/her business).
Aging is a process most people find difficult to embrace and gracefully accept the changes that it brings in our lives – both physical and non-physical.
Physically, the body has gone past its peak, has performed its best and has now slowed down requiring more rest.
Even if we become more experienced with age as the adage goes “wine matures with age”, we become slower in movement, thought and action.
In this view point, it causes a lot of frustration to the elderly entrepreneurs as they find it difficult to cope with the unapologetically fast moving and fast changing VUVA environments where we do business.
Sure, in this fast-paced world, belated decisions are really costly.
Non-physical changes can be even more frustrating as psychological effects of coping with the changes taking place due to age seem more difficult for most people to understand – both those going through the changes as well as those around them who should be offering them support.
However, pushing the body has its repercussions as it does not heal but stresses it even further.
Ephrem Cheng carried out a study analysing the relationship between retirement age and life span. Although the research was done in the United States of America where the socio-economic conditions are different, the indicators are useful when making retirement decisions by our home-grown entrepreneurs.
The research found an inverse relationship between retirement age and age at death; implying that those who retire early live longer than those who retire late.
The cause has been identified as mental stress arising from the pursuit of power, luxury and money.
Furthermore, early retirement enables a person to adjust to the relaxed way of life and to find alternative less stressful and healthy habits to spend time on.
Besides all these benefits of early retirement, it then calls for our entrepreneurs to put in place systems and structures that make them enjoy all business retains even without being full-time in the processes.
In all these discussions we are having, it shows that nature requires people to retire and slow down business activities and engagements as they grow older; hence the need for developing a business strategy that has a specific succession plan.
The business strategy should factor in the entrepreneurs’ retirement plan while ensuring business sustainability.
This requires the entrepreneur to be prepared mentally as well as emotionally for the time when s/he needs to slow down.
Retirement does not mean as an entrepreneur you are now useless or you are completely letting go of your vision, it simply means you are slowing down and, should one’s interest be in the business then you can continue being involved but on a part-time basis or in an advisory role.
Continuing having an interest in the business while stepping down from active roles helps the founder pass on the button-stick to the younger generation and live with the satisfaction that his/ her vision will not die.
Retirement peace in this scenario can only be attained with the satisfaction that the business is in good hands and the entrepreneur’s vision is being pursued.
Talent management is essential in ensuring the business thrives beyond its founder.
Talent management starts from identifying and aligning talent at the staff recruitment stage and involves mentoring, staff development, work conditions as well as job alignment of the entrepreneur’s human capital.
In the case of family run businesses, talent management can also be incorporated into the family where interested and willing family members’ talents are identified and groomed for a position in the company.
Company Trusts, though difficult to develop, gives those left in the business confidence to run it.
Strong corporate governance supported structures help to foster trust between the founder entrepreneur and those entrusted to continue operating the company.
This requires the entrepreneur to clearly document and articulate shareholding issues, especially in the case of family owned businesses.
The number of shares held by each shareholder as well as their transferability should be clear to those concerned to avoid conflict over the company’s ownership as these have serious negative implications on its future viability.
In this advent of technology, it is important to establish effective and efficient information systems within the company that clearly define lines of accountability and responsibility as they strengthen internal controls.
Information systems that facilitate an audit trail make it easier for those running the company after your retirement to follow what has been happening in the company as well as obtain an understanding of the vision being pursued and the strategies in place to pursue it.
Putting in place data management systems that ensure data is safe but transferrable to the next vision leader(s) facilitates a smooth transition from one visionary leader to the next.
Artificial intelligence (AI), which was discussed in the previous edition, has made it easier to design, develop, implement and monitor efficient information and data management systems.
To be guaranteed of sustainability, 21st century entrepreneurs have to embrace AI and to use it to maximize their operations into the future.
As the saying goes, peace of mind is the best medicine.
Planning retirement brings peace of mind as aging takes its toll on us. Entrepreneurs build strong brands and relentlessly follow your vision but ensure that you plan for retirement.
- Dr Farai Chigora is a businessman and academic. He is the head of management and entrepreneurship at the Africa University’s College of Business, Peace, Leadership and Governance. His doctoral research focused on business administration (destination marketing and branding major, Ukzn, SA). He is into agribusiness and consults for many companies in Zimbabwe and Africa. He writes in his personal capacity and can be contacted for feedback and business at fariechigora@gmail.com, www.fachip.co.zw, WhatsApp mobile: +263772886871.
- Ngonidzashe Elizabeth Chirima is an entrepreneur and a seasoned academic, currently a Doctor of Business Administration candidate (Binary University, Malaysia) whose research focus is financial retirement planning, She is a lecturer in the accounting and finance department at Africa University in the College of Business, Peace, Leadership and Governance. She writes in her personal capacity and can be contacted on ne4liz@gmail.com , +263772811598.