By Luke Johnson (in Sunday Times)
IT IS dangerous for entrepreneurs to retire. Once I bought a flooring company from two men: the senior partner stepped down from his job after a while, recompense for decades of graft. He “sank into his armchair and never got up again”, said his former partner, and within two years he was dead. As Saul Bellow put it in his novella, The Actual: “Retirement is an illusion. Not a reward but a mantrap. The bankrupt underside of success. A shortcut to death. Golf courses are too much like cemeteries.”
I agree with David Ogilvy, the original Mad Man, who said: “The secret to long life is double careers. One to age about 60, then another for the next 30 years.” Ogilvy built up one of the largest advertising agencies in the world, but stepped back from day-to-day management in 1973. Later he lived in a 60-room chateau near Poitiers, but kept a close eye on the business from there. He received so many letters that the local post office had to be upgraded and the postmaster was awarded a higher salary. And in the 1980s he came out of retirement to be chairman of Ogilvy & Mather in India.
But how do entrepreneurs fill time if they sell their business, or hand over the reins to the next generation? One option is to become a serial entrepreneur. In conjunction with the bank Coutts & Co, the Centre for Entrepreneurs recently published a report called Beyond the First Business: The Myths, Risks and Rewards of Being a Serial Entrepreneur. It reveals that more than a third of them are aged 55 and above, and that they tend to take more of a hands-off approach with their subsequent businesses.
What matters most to them is not making more money, but participating in the growth of a new enterprise. The pride and stimulation of building something worthwhile becomes increasingly important with age.
As Bo Burlingham puts it in his book Finish Big: How Great Entrepreneurs Exit Their Companies On Top: “The qualities that make them successful are the same ones that make retirement difficult. They get identity, purpose, a tribe, structure and a sense of achievement from their business. Until they figure out how to get those things back, they are likely to be miserable.” I am convinced that staying intellectually engaged helps to fight off conditions such as dementia. And the way to avoid seller’s remorse when disposing of your business is to plan your next step before you do.
Interestingly, the fastest- growing group of entrepreneurs is the over-fifties, the so-called olderpreneurs. Many are becoming self-employed as a later-stage career move. As a population we are generally living longer, and are physically much healthier than previous generations.
In America they have a terrific non-profit group called Encore.org, which promotes “second acts for the greater good”. Its objective is to apply the skills and experience of those in later life in a constructive way. Initiatives like this are one way of tackling an ageing population — helping to combat the outdated idea that we should all just give up a productive existence at the age of 65.
In fact, the average age of retirement is rising, partly because of inadequate pension provision. Yet among those aged 64 to 69, only 15% work. According to an Institute of Economic Affairs report from 2013, retirement can damage physical and mental health. The happiest older people I know are those who still have work and a reason to live. As Studs Terkel wrote: “Work is about a search for daily meaning as well as daily bread, for recognition as well as cash, for astonishment rather than torpor; in short, for a sort of life rather than a Monday through Friday sort of dying.”
I am dubious about traditional retirement because, for most, the dream of golden years of endless leisure proves to be neither fulfilling nor practical. Of course, only some have the energy and ambition to keep going until they drop. But many of us are capable of more than we know. As Oliver Wendell Holmes said when he turned 90: “The race is over but the work is never done while the power to work remains.”
I fully accept some must give up their first profession and switch to another at a certain point. Airline pilots, for example, can’t fly after 60 in many countries. But one of the wonderful aspects of working for yourself is that you decide when to stop.
Older people who want to take charge of their own destiny do not have to start a business: they could create a charity, a social enterprise, a civic endeavour, a neighbourhood organisation or a recreational club. Teaching and mentoring are activities the older generation is especially suited to. There is, after all, no shortage of challenges facing society — the “lump of labour” fallacy demonstrates that the availability of work is never fixed. As Walter Wriston, former boss of Citicorp, said: “When you retire you go from Who’s Who to Who’s That?” Not a great finale.
Luke Johnson is chairman of Risk Capital Partners and the Institute of Cancer Research