It was mid-summer 2020, and Ginni Rometty, the chairman and CEO of IBM, had six months remaining on her nearly 40-year career with the company. Her longtime mentor, the revered former CEO of IBM, Lou Gerstner, had reached out to request a meeting. “He wanted to see how my retirement planning was coming along. Truth be told, I hadn’t begun to think about it. I was still running the company full time and had not been able to set aside the time,” Rometty told us.
Rometty arrived at Gerstner’s offices in New York. Not wanting to come to the meeting empty handed, she had compiled a list of activities that she was considering pursuing after she left IBM, which included some usual suspects: corporate boards, private equity roles, government service, perhaps write a book? She passed the list to Gerstner, who read through it, then jotted some notes on the page, and passed it back to her.
“I think Lou basically gave me an ‘F’ in retirement planning!” Rometty recalled. “Then he suggested I approach this time of my life differently.”
Gerstner encouraged Rometty to step back and think about her post-IBM years more broadly by resetting her life’s purpose, and creating a strategic plan for how she could apply her skills to her personal mission. Rometty took a great deal away from that meeting, and several years later, she’s found her way to a very successful life of impact and family. “At the center of my circle is creating a global movement around SkillsFirst leadership by helping companies hire and promote people — particularly those from underrepresented groups — based on their skills, not just formal educational degrees,” she said. “I’m just as busy now as I was when I was CEO. It’s just a very different kind of busy.”
“Today, I can say I’m doing pretty well, and feel purpose driven. But the journey to get to this point was certainly not an easy or expected one,” she admitted.
Each year, thousands of executives retire from long and successful corporate careers. But few are prepared for the journey they are about to embark on. Through our work, our experience on and working with corporate boards, and our personal interactions, we’ve observed the journeys into retirement of thousands of executives. We’ve watched people thrive in this new life stage, with some reaching levels of satisfaction and fulfillment they never thought possible. But we’ve also witnessed the long, difficult, and sometimes dark journeys on the way to the other side.
This is true even for the most well-known and respected CEOs in the world — so much so that the three of us decided to help, creating ONYX, an exclusive first-of-its-kind community for very experienced current and recently retired Fortune 500 CEOs. Receptivity has far surpassed our expectations, with more than 50% of the invited CEOs joining the membership. Clearly, this is a significant and under-addressed pain point.
Our recent focus on the executive retirement journey, including conversations with dozens of highly respected former chief executives, has been enlightening to say the least. The twists and turns toward a post-executive life are different for almost every person — but along the way, there are surprisingly common mistakes that, to one degree or another, frustrate, obstruct, and forestall this transition.
We call the most common missteps the seven hidden traps of executive retirement. Becoming aware of them before you begin your journey — and hopefully avoiding them — will de-risk your path to an optimal new life phase and allow you to enjoy the journey along the way.
1. Looking through the lens of the present impedes you from seeing future possibilities.
The job of a senior executive is all encompassing. It occupies the bulk of your identity and for decades, the majority of your life. But that role, and all the perks, prestige, and validation that come with it, eventually comes to an abrupt end.
Professionals who are unable to see beyond their lives as a full-time executive may not anticipate or explore their true wants and needs in the next phase. Their lack of creativity about the future may cause them to miss out on activities that could have been beneficial to them and genuinely rewarding.
“When you come out of the CEO role, in a lot of ways you are at the peak of your career – your reputation, your awareness, your brand,” said A.G. Lafley, who twice led P&G as chairman and CEO. “You have to get over that. Forget about it. It’s not who you are. It is just the last chapter. You turn the page. You have to start working on the next chapter.”
Viewing the world through your current corporate identity will push you to incrementality, focusing on questions such as: What are the most obvious things I should be considering? How can I hold onto the prestige of my previous role as long as possible?
Instead, you need to focus on a fundamental reimagination of your self as you enter this new phase of your life, asking questions like: What is my purpose? What are my values? What is my legacy? What are my innate strengths and weaknesses? What brings me joy? What do I now want to achieve in my life?
“I went through an entire discovery process,” said Denise Morrison, former CEO of Campbell Soup Company. “How can I now apply my talents and treasures to contribute to the world and help others reach their potential? You need to release yourself from the past and create a framework for your new life.”
2. A wealth of options can overwhelm and paralyze decision making.
“When you are no longer the CEO, it can be very liberating — and a bit scary. It is your agenda entirely to fill in. You are a solo practitioner,” said Roger Ferguson, retired CEO of TIAA.
For decades, your life has been governed by scarcity of time and the pursuit of a finite set of objectives for a single organization. Now, you find yourself staring at a blank piece of paper. You have control over your entire calendar and can focus your energy on any set of activities that you choose, or nothing at all.
This feeling of liberation is usually short lived. Having too many choices can lead to decision fatigue, reverting to default options, or even avoiding making a decision altogether. This abundance of alternatives quickly becomes overwhelming at best, and at worst, can lead to an unnecessary period of stagnation and a resulting whiplash right into a series of poor and unretractable decisions.
As highlighted above, a successful retirement journey begins with a redefinition of your identity, purpose, and mission. Having gone through this exercise, you can now translate these “north star” definitions into a set of decision criteria from which you can evaluate the multitude of options in front of you. Lenses such as “I want to work with teams,” or “I want to impact this specific cause,” or “I want to support younger leaders,” or even “I only want to travel five days a month” can all be used as screens to filter out alluring, but inappropriate engagements that will not take you where you want to go.
“My filters became one, where can I learn the most about things that interest me, and two, where can I have the greatest impact,” said Ferguson. “I have gravitated to things where those two questions intersected the most.”
3. Relying on your old network can distract you from the critical task of building your new one.
The vast majority of your professional network is exactly that — professional. Many entering retirement are shocked when up to 95% of their “personal” relationships turn out to have been merely transactional.
Rebuilding your network is an unexpected but critical necessity. Your retirement network can be every bit as valuable as your previous one. But it will almost certainly be different, and it won’t just build itself. You have to make this a priority. As Rometty told us: “You have to consciously create the future network you want.”
Join multiple new communities — and the earlier, the better. Find peers who are farther along in the retirement journey and learn from them. Reach out to others with similar personal, professional, and philanthropic interests. Join an established network that proactively facilitates interaction and creates new opportunities for connection and serendipity.
Rekindling old relationships or investing in new ones will lead to valuable and unpredictable outcomes. It is often these new connections who are your most robust channel of inbound opportunities and lead to the most unexpected and fulfilling outcomes.
4. Delayed retirement planning can lead to urgent, anxious, and awkward outcomes.
The majority of CEOs and executives we talked with told us they failed to appropriately plan for their retirement — and nearly all told us they waited too long to start. They were working until their very last day. But, as Rometty noted, “A plan is critical. It helps you make better decisions and commitments.”
Without a plan, retirement can feel like falling off a cliff. Delaying the reality of your retirement leads to increased uncertainty, apprehension, and anxiety. Failing to plan early robs you of the opportunity to explore low-risk interactions and gain knowledge, to plant the seeds of new, valuable relationships, and to allocate the time and headspace necessary to become comfortable with your future.
Begin as early as two years before your expected retirement. Take some quiet time to think about your next life phase. Talk openly with your spouse. What are you excited about? What makes you worry?
“Far too many CEOs are not introspective about this, thinking they are too busy, or the moment will never come, and they will just deal with it sometime in the future,” said Don Gogel, founder and former chairman and CEO of private equity firm Clayton, Dubilier & Rice. “If you are starting to think about retirement six months prior to leaving, that is way too short a time frame.”
Schedule lunches and dinners with those you respect who have successfully navigated their way through the retirement transition. Reach out to those you think might be helpful in evaluating future opportunities. Begin to replace fear and uncertainty with facts and knowledge. Ultimately, bring this all together in a strategic retirement plan.
5. Decisive behaviors that worked for you as an executive can work against you in retirement.
For many executives, a frenetic environment is the norm, even their most comfortable state of being. Then they retire, and … silence. The phone stops ringing. Your calendar is empty. It’s late morning, you’ve read four newspapers front to back, and you’re wondering: “Is it embarrassing to go to lunch at 11 am?” Over time this sudden absence of activity can lead to feelings of boredom, emptiness, and loss of self-worth.
To make matters worse, executives are often told: “Don’t commit to anything for at least six months.” Following this advice can have the unintended consequence of further, artificial isolation. The silence becomes acute. The pressure continues to build. And then … snap!
We’ve seen too many executives whiplash abruptly back into the professional world, committing to the set of opportunities that happens to be in front of them at that moment of great vulnerability. Some have even accepted another full-time executive role after committing to themselves — and those close to them — not to. Attempts at a rational or planned approach are tossed aside in favor of emotional decisions meant to fill a short-term void. Sometimes things work out, but mostly this leads to significant, misaligned commitments that are painfully difficult to unwind.
The initial phase of retirement is the perfect time to make small, smart bets and learn as much about potential opportunities, and yourself, as possible.
First, make a list of the types of activities you think you would like to do in retirement. Next, and perhaps most importantly, make a list of assumptions about what “the work” of these engagements will be like, and why you think you will enjoy it. Finally, begin to identify low-risk opportunities to experiment, test your assumptions, and validate that the day-to-day activities you will be engaged in are as satisfying as you anticipated.
You might be surprised at how many of these experiments lead you to realize the activities you thought would be fun and fulfilling are anything but. Alternatively, these experiments can lead you to move some things you weren’t initially excited about much higher on the list.
“I thought I wanted a role in private equity,” Morrison told us. “After participating in some actual engagements, it turned out the work was not what I thought it would be, and that role was not for me. Interestingly, a few of the other areas I explored that I didn’t think were very promising are now some of the most rewarding activities I am engaged in.”
6. Focusing narrowly on the most traditional options limits your ability to maximize your fulfillment.
Armed with a career’s worth of experience and a lack of limiting restraints, such as time or money, there’s an infinite array of lifestyle design choices available to former executives.
Yet, in our experience, many find it unnerving to veer far from the most common paths. They quickly are recruited and lean into default options, for example joining two to three additional corporate boards, with the associated prestige and continuing paycheck. But no amount of board work can fill the executive leadership void. These roles can become quite tedious, until the company runs into trouble, in which case they are painfully not.
We’ve seen others go straight into private equity, becoming an “operating partner” and providing hands-on support to portfolio companies. But as one former CEO told us: “The next thing I knew I was staying at a Holiday Inn in Toledo across the street from a factory, and I realized, ‘Wait a minute! This is exactly where I was when I was 26!’”
When making your plan for what to do next, it’s reasonable to start with a list of the usual suspects. But before making any long-term commitments, we recommend expanding this list to include other, less common paths. Would you enjoy coaching or mentoring leaders, younger professionals, entrepreneurs, or students? Would it be exciting to make seed investments in a portfolio of start-ups, selectively providing advisory work along the way? Do you want to write a play, or join a band? Do you want to check an item off your bucket list, for example learning several new languages? Do you want to live in a new country for a month every year? Do you want to buy a small vineyard in Napa, or relax on a farm in the mid-west and blend anonymously into your surroundings?
“When I finally retired from the CEO role, I realized I was in the unique position to convene,” Fred Hassan, who served as chairman and CEO of Schering-Plough and Pharmacia & Upjohn told us. “So I created a roundtable for pharma CEOs which I host every year, as well as a yearly summit for the top R&D leaders in the industry. I even host a charitable dinner once a year which brings together senior leaders from all corners of the industry. All of this helps me to stay active, relevant, and engaged. And it is invaluable for maintaining my professional network.”
7. Waiting for the phone to ring can rob you of the most fulfilling opportunities.
When you were younger in your career, you were hungry. You didn’t wait for the best opportunities to come along – you searched them out and landed them. Over time, the teams that worked for you began to source and bring to you new opportunities to consider.
When you retire, your pipeline of inbound opportunities begins to dry up. This can be a humbling experience. The majority of executives we’ve worked with aren’t accustomed to touting themselves as “experts,” or proactively promoting their personal “brand” in the market. They are much more comfortable crediting their teams for their success. These traits make for great servant leadership, but do little to restock a pipeline of new opportunities in retirement.
In retirement, new opportunities will likely still come to you. But without a sufficient pipeline, it’s impossible to know how much these engagements are being “sold” to you, and how they actually stack up against other, less visible opportunities. Waiting for the phone to ring will ultimately result in trying to make the best out of an unnecessarily limited set of alternatives.
“I wanted to give back as much as I could, so I started hunting for things,” Lafley told us. “You have to pick your area of desired impact and go find the best opportunities to make it happen.”
Designing your optimal retirement lifestyle requires uncovering potential opportunities in the marketplace — and also making sure that opportunities can find you. Being proactive in your search increases the opportunities from which to choose from, increases your odds of success, builds confidence, and helps you avoid becoming stuck in roles you don’t like.
Dust off the old resume. Network online and offline. Consider informational interviews, cold calling, and even working with organizations to craft a role which doesn’t currently exist.
All of this takes effort, but it will pay off in the long run. Never forget, you are the lead designer for the rest of your life.
Today’s definition of retirement is entirely new, marked by a desire to continue working, to create a portfolio of activities and engagements, to make a meaningful positive impact, and to design an overall lifestyle that keeps you engaged, excited and active. Avoiding these seven common traps will help make the transition more efficient and enjoyable. It may even lead you to your most fulfilling life stage yet.