Preparing for Your Second Act

Entrepreneurs who have spent their lives building businesses may underestimate the difficulty of quitting cold turkey

by Keith McFarland

F. Scott Fitzgerald once observed, "There are no second acts in American lives," but if he were alive today, he might consider revising the quote. After a lifetime in politics, Al Gore won an Academy Award and has refashioned himself into a business and media mogul, founding an investment firm, an Internet television concern, and advising or sitting on the boards of companies such as Google (GOOG) and Apple (AAPL). Mitt Romney moved in the opposite direction, leveraging success as leader of private equity titan Bain Capital and head of the 2002 Winter Olympics into a successful term as governor of Massachusetts and now a run for the U.S. Presidency. Even former Federal Reserve Chairman Alan Greenspan is getting into the second-act "act," recently announcing that he has signed on as an adviser to Deutsche Bank (DB).

If you haven't yet started to think about your own second act, it's never too early to start. Peter Drucker predicted the average young American at the turn of the century could expect to have about six careers in a lifetime, in part because of the rapid, discontinuous changes reshaping the workplace. While in many countries people's job mobility is severely limited by class, educational background, or other societal factors, people in the U.S. today still enjoy an unprecedented freedom to change careers midstream. A friend of mine who was a massage therapist for more than a decade is today a top computer networking consultant. Another friend, a top person at Morgan Stanley Private Equity (MS), is building universities in Asia.

Even my own career is an example of the highly transitory nature of modern careers: I spent the first decade of my career as a university administrator, the next as a technology CEO, and I'm now a writer and consultant. Every new career I have enjoyed has been built on the experiences of the last and has opened my mind to whole new ways of thinking (BusinessWeek.com, 5/15/07) and exciting new experiences.

Retirement's Dirty Little Secret

As modern medical science allows people to enjoy longer, healthier lives, many are finding that retirement isn't all it's cracked up to be. Many of my own friends have tried retirement, but found that they missed the intellectual stimulation and collegial environment that meaningful work provides. For those who had invested time prior to retirement thinking about a second act, the transition has been reasonably smooth. For those who failed to look up from the grindstone until just before retirement, many have been surprised by just how difficult creating a second act for themselves has been.

The second act conundrum is about to hit small business (BusinessWeek.com, 1/16/07) in a big way. Last year, the first of the Baby Boom generation turned 60. (An American now turns 60 every 11 seconds.) The people who make up this 77-million-strong cohort born between 1946 and 1964 will soon be faced with the decision to stay in their current position, retire, or create a second act. Some of these people have spent their lives building businesses that, in many ways, have become extensions and expressions of who they are. They may greatly underestimate the difficulty they will have in quitting work cold turkey.

These people have knowledge and skills that would make them valuable assets in any number of capacities, including mentoring young entrepreneurs, serving on boards, consulting, or running firms. But to assure a successful second act for themselves, they should start the process early. Here are a few suggestions.