Why are corporate executives seduced by the siren’s song of an entrepreneurial venture?
A sample of more than 300 "C-Suite" corporate executives between the ages of 48 and 58 in the midst of a career transition shows that more than half of these executives were interested in pursuing entrepreneurial rather than corporate roles.
Yet, these executives will tell you that despite the highs and lows, they had fun in their previous positions, enjoyed the prestige of their jobs and were well-rewarded financially. So why are they interested in pursuing other ventures when they could sit back and enjoy life?
Although many issues are at play, two appear to be dominant — an executive’s age and how long he or she always intended to work. These issues function in tandem but also work independently to "push" or "pull" executives in an entrepreneurial direction.
If you think of "push" factors as negative experiences, or circumstances that senior executives want to avoid, there are a number of themes that emerge.
Age discrimination remains a factor in hiring. After the age of 50, the length of time it takes to find a new corporate position lengthens significantly. CEOs age 55 and older who want to remain engaged in challenging work recognize that they probably won’t find it in the traditional job market.
An increasingly hostile business environment. Corporate leaders are pressured to focus on short-term growth and performance targets that may have a negative impact on long-term profitability.
Job scarcity at the executive level. Executives who want to get back in the game often run out of time and patience, and pursue entrepreneurial activities as a "default" strategy.
The need to have an impact on the organization. Change in large organizations is often painfully slow. Senior executives may recognize that they have less time to make something happen, and they view entrepreneurial ventures as faster-paced and more agile in changing markets.
With the growing awareness of age and the end of one’s career, executives also have pull factors that will increase their enjoyment of work.
Senior executives want greater control over their lives. They may have sacrificed their family, friends and personal lives for their careers, and they admit that they enjoyed it. But now, they want to build something that meets their needs.
They want to make things happen quickly. They want to see cause and effect. They want to develop the culture, set the strategy and drive results. It doesn’t hurt that they can also generate additional wealth.
Significant net worth eliminates short-term financial concerns. These executives aren’t concerned about mortgage payments, so they are less concerned with base compensation, and more interested in the potential for wealth generation represented by an equity stake.
There is higher risk acceptance. Top executives have racked up many accomplishments. They trust their own instincts and business judgment, and want to do what they think is right without being constrained by policies or tradition.
They want to leave a legacy. Senior executives often talk about how quickly corporate accomplishments are forgotten. At this time in their lives, they want to build something as a lasting testament to their ability. They also think about businesses where their children could someday be involved.
Strong work ethic. Top executives have exceptional work ethics. They routinely work 70-hour weeks, and are driven by the need to lead teams, build organizations and create value.
For these reasons and others, when successful senior executives have the opportunity, almost half want to consider a new path. Their age, combined with the length of time they planned to work, fueled by push and pull factors, make the siren’s song of entrepreneurial adventure almost irresistible.
[Editor’s note: This is the first article in a two-part series. Next month, find out what makes a successful entrepreneur.]
Gail R. Meneley is a principal in Shields Meneley Partners, a firm that provides confidential career and life-transition services to senior executives. Reach her at 312.994.9500 or at [email protected]. To learn more about Shields Meneley Partners, visit www.shieldsmeneley.com.
