Exit door

MUCH ATTENTION is given to where the entrance to a mall or office is located. Usually, the main entrance is at a drop-off point that is conveniently located. But what about the exits? These may be in the same area as the entrance, except in case of a fire or earthquake. Looking for the emergency exit door does not seem to be a priority when thinking of how to get to a meeting place.

The exit is an architectural metaphor for an ending. Emergency exits are designed to allow safe passage out of a building or room. Theme parks have an elaborate system of managing crowds for popular rides by having separate entrances and exits. The latter allows large groups to empty into a street outside to allow a fresh line of customers to be seated. (Screaming during the ride is encouraged.)

Exit strategies are also used in managing investment portfolios and retirement plans.

Savers are advised to have an exit plan when they set up their investments. At first, it is the yields and risk appetites that get evaluated. Afterwards, it is the liquidity of the investment and the market for the portfolio holdings that are considered. The exit strategy evaluates the timing and the price points targeted in terminating or replacing investments.

An exit strategy is clear with projects which have definite beginnings and endings, like a movie production. A temporary organization is established with clear goals and definite exit points. Each segment has a role. There are the cast, production designers, camera crews, directors, and the catering company. Each one has an exit point.

Once the movie is wrapped up and shown in theaters or streamed online with the video rights secure, the project is done.

And the job of the CEO or Producer is over. Did the movie make money? Should there be a sequel?

Elected officials too have a definite tenure in office. They are elected for a specific term and may be allowed to run for reelection, though not guaranteed to keep their position.

Thieves benefiting from some illegal activity rarely consider getting caught or thinking of how to get out of the mess when caught. Only when exposed in investigations and posts in social media for unexplained (or easily explained) wealth, do the perpetrators look for an exit strategy. Usually, this is located abroad.

Does corporate culture also embrace an exit strategy?

A CEO recruited by a search committee of the board negotiates the terms of his employment and the targets he must achieve within a timeframe. Once on top of the organization, he sets a game plan to achieve his deliverables, connects with his direct reports, and sometimes even brings in a new team he can trust. The exercise of setting the mission and vision of the company is meant to instill a revitalized corporate culture.

Is there even any mention of possible failure? Does the executive himself need an exit strategy when things don’t fall into place? As the pressure to deliver mounts, so does the need for an exit, after all the excuses are set aside.

With all the management talk of succession planning, exit plans are often taboo topics with CEOs. They’re only discussed for “others.”

Successions are implemented effectively at the lower management levels even when the incumbent is just out for lunch.

In family corporations, the patriarch may step down and leave the “day-to-day” operations in the hands of the next generation. This type of exit seems to work well as the position and moral authority of the “patriarch” remain. This status of ownership belongs to a particular individual and is only given up in a horizontal exit. Thus, the patriarch can stay in his penthouse and read or maybe travel if he is still up to it. He can be consulted for major moves and referee between squabbling siblings. Backstabbing is allowed.

An exit strategy is usually an afterthought. The prospect of failure or even a diminished level of energy and focus is noticed by everyone except the subject himself. Often the exit door swings both ways. It can let a person leave and then come back again — did I miss anything?

Tony Samson is chairman and CEO of TOUCH xda

ar.samson@yahoo.com