SME owners planning to retire or take a back seat at their companies face financial, emotional and psychological challenges. Recognizing the psychological factors that drive a successful change of control can make the difference between a smooth or disastrous exit.
Psychology usually comes to mind in marketing, talent and customer-facing matters. Owners benefit from looking inward at themselves before a potential full or partial exit. Particularly, change management psychology is increasingly important in organizations that are seeking to make systemic and/or cultural changes. The change management lessons in this McKinsey and Company article are important considerations for any owner considering moving out of his company.
SME owners need to consider four important lessons from exit psychology:
1. Awareness. Growth, productivity, and cultural change require awareness of the psychology involved not only with employees and clients but with themselves as well.
2. Purpose. Articulating a clear organizational purpose is essential not only for internal change processes, a clearly defined purpose is essential to communicating the change to the next generation of leaders as well.
3. Needs. The time to reflect on what the owner needs as part of an exit needs to happen before starting conversations with potential buyers, not after.
4. Value. The real value of a company’s product or service is difficult to communicate to customers, so it will be even more difficult to communicate to potential buyers. Taking the time to define the psychological significance of the product or service to the owner is time well spent.
The same psychological influences at work in non-exit change processes are at work during a change of control. Successful exits are mindful of the human side of every transaction.