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October 20, 2011

Not The Retiring Kind

By Spear's

Take away the stress, the buzz, the flap and the friction and what’s an ageing high-flyer left with? Literally dying of boredom is a serious risk — though there are ways around it, says Luke Johnson
over 25 years working with entrepreneurs of every different variety. During that period, one of my fascinations has been what motivates them — why do they keep going, even after they’ve made a fortune?

For some it’s purely the money, but for most that is almost a by-product of success — and it is this latter group, for whom the financial rewards are very much secondary, that most interests me.

Not long ago I helped chair an event hosted by the Prince’s Trust and attended by 50 high-achieving business owners. I asked a number what their main drivers were. For some it was a desire to create something enduring; for others a need to prove themselves, to show the sceptics that they had what it takes. Most were passionate about their business and enjoyed working with their staff, serving their customers, and were obsessed about their products — from Charles Dunstone at Carphone Warehouse to Richard Harpin of HomeServe.

Meanwhile, at Richard Branson’s house I heard a brilliant speech by Mike Clare, ex-owner of Dreams bed stores, who explained that his spur was a rivalry with his older brother, who had attended Cambridge, whereas Mike hadn’t gone to university at all. He built Dreams to demonstrate that he could be a winner, too.

Yet one stimulus that few entrepreneurs mention is boredom. For me it is one of the greatest enemies in life — as I suspect it is for most founders, who by nature are people of action. One of the defining characteristics of almost every entrepreneur I have partnered has been a constant restlessness — a hunger to find new challenges.

Perhaps this need for stress is a little unhealthy, but at least it helps provide a purpose in life. So many people hate their job or lack a sense of direction. Entrepreneurs rarely suffer from these failings. Rather, they sometimes allow their passion for business to upset a civilised work/life balance, and their domestic existence can suffer as a result of a raging focus on their company.

Yet possibly the worst aspect of all this manic concentration on their career is the aftermath of cashing out. Quite a few entrepreneurs I know have suffered from seller’s remorse — not because the price they achieved for their business was inadequate, but because they hated being idle and had no grand task to address every day.

I recall dealing with an accomplished owner of a floor coverings business years ago. I took a controlling stake in the operation, while the seller carried on working for a couple of years on an earn-out, which he surpassed. He then stepped back and retired — which is apparently what his wife wanted — so they could enjoy more ‘leisure’ time together. I saw him only once after this, perhaps six months following his departure. He was a shrunken figure, immobile in an armchair while his wife vacuumed the floor — a shadow of his former dynamic self. Within a year he was dead of a heart attack.

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My view is that traditional retirement simply does not suit entrepreneurs. By nature they are individuals with a sense of urgency, almost a calling. If you take that away, then for many, what is left? Very often such types have not cultivated lots of hobbies or a wide circle of friends outside their business. They live for the adrenalin rush of business, the drama of taking major decisions, the ego boost from being in charge.

Frequently there are compelling reasons to exit — children do not want to inherit a private company, there is a need to repay debt, or the fact that no-one can be the chief executive for ever. So what are the answers?

I think entrepreneurs are more capable than most of developing a diversity of interests that can keep them engaged. Perhaps golf is not the solution, but charitable causes, or at least social enterprises, can help fill the gap. Possibly one or two angel investments and non-executive directorships are part of the transition from a full-time role as boss. Many founders like acting as serial investors and mentors in growing private companies.

I have taught a case study about Pizza Express on many occasions at the London Business School over the years and have greatly enjoyed the enthusiasm and intelligence of the MBA students there. I suspect there are hundreds of entrepreneurs who would love speaking to young people at schools and colleges about their experiences. It requires imagination to find the right blend of pastimes and pursuits that can replace the excitement of running your own show — but the effort is surely worth it.
Luke Johnson is the author of Start It Up: Why Running Your Own Business Is Easier than You Think (£12.99, Portfolio Penguin)

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