In business, exit plan is generally defined as an entrepreneur’s strategic plan to sell his or her ownership in a company to investors or another company.
According to Corporate Finance Institute, Exit Plans are sometimes referred to as, Exit strategies and is defined as plans executed by business owners, investors, traders, or venture capitalists to exit their position in an asset at a certain point.
These plans include; Merger & Acquisition (M&A), Buy out, IPO- Initial Public Offer, Liquidation and so on.
However, this article focuses on Exit Plan for individuals, employees or working professionals.
What is an Individual Exit Plan?
Individual Exit Plan is a contingency plan that is executed by an individual or an employee to separate from a role or an organization, in pursuit of a greater career aspirations.
Crafting an exit plan should be an integral part of individual’s career growth strategy before assuming any new role. Oftentimes the excitement of having a new role or a new job gives no room for creating the much-needed exit plan.
In the nearest or farthest future, every employee will exit an organization though form of exit could vary, and, in most cases, could be by abscondment, desertion, resignation, termination, dismissal, end of tenure, retirement or…even death.
The truth is, there will be an EXIT at some point in life.
An employee or individual exit plan is basically about having a career plan B or C. Even if you are convinced of your plan for the next 3-5years nothing stays the same anymore…especially in this era of constant disruptions and uncertain world of work…open your mind to a world of endless possibilities.
Why you should have an Exit Plan
While employees are not under compulsion to have exit plan, yet it is critical and strategic for every working professional irrespective of job grade or level, to have a comprehensive and robust exit plan because, it;
Keeps you focus and assists in preparing you for the future and this will prompt you to take deliberate actions to increase your skills and competencies in preparation for the future.
Helps you to effectively prioritize and to efficiently allocate your time working on specific goals, such as acquiring relevant skills, developing competencies, building network of people, identifying opportunities that can push you towards achieving your career aspirations.
Gives a sense of direction and helps in identifying the resources and associations needed to attain major milestone in your career pursuit.
Comes with a satisfaction and a sense of fulfilment of being in control of your career path.
What to do before writing an exit plan
- Have a clearly defined career aspiration.
- Conduct Self-Assessment.
- Identify possible career paths- within and outside current organization.
- Get familiar with relevant job requirements.
- Identify required resources or tools.
- Identify gaps in personal skills or competence.
- Develop plans to acquire the skills that are lacking.
- Build strategic relationships.
- Understand the business environment or terrain.
- Sharpen job hunting skills.
Every exit plan should be flexible enough to accommodate changes and adaptations to the volatile, uncertain, complex and ambiguous (VUCA) business environment.
Types of Exit Plan
- The Vertical Exit Plan
- The Lateral Exit Plan
The Vertical Exit Plan
The vertical exit is a separation from a job title or role to take on another role within the same organization.
It occurs when an employee or a role holder leaves a particular role or position for another role within the same department or another department or a different geographical location, without necessarily leaving the organization. It could be by job rotation, secondment, assignment or promotion.
This could also be as a result of the employee volunteering to work in an ad-hoc committee, join a project team, work as a resource gap or go on international assignment.
This type of exit can be planned or unplanned:
The Planned Vertical exit occurs when the role holder applies and is considered for another role within the organization.
While an unplanned vertical exit occurs when the role holder is being promoted or assigned to another role or business unit within the organization or its affiliates.
One of the characteristics of this type of exit is that all changes to career progression occurs within a specific organization.
The decision to have a long stay, 3-12 years or more, in a particular organization shouldn’t be based on laziness or lack of ambition, there should be strategic reasons to it. For some, the motivation to stay could be based on the training opportunities, perquisites, competitive salary, exposure to best practices, career progression, long service award, gratuity, retirement benefits, etc.
Regardless of these reasons, never spend more than 2 years on a particular role or position without a change in job portfolio or responsibilities.
If growth opportunity is limited for whatever reason, you can consider the following;
- Volunteer at committees.
- Join project teams.
- Participate in inter-departmental task.
- Explore opportunities for local or international mobility including expatriation, if possible.
- Be the ‘Subject Matter Expert’ and volunteer to train others.
Always remember that the life cycle for every skill is 2 years. Pursue every opportunity to learn new techniques, develop digital and in-demand skills and abilities, or sharpen existing skills.
The responsibility lies on every individual to be on constant lookout for career growth opportunity and be ready to maximize it at every chance.
The Lateral Exit Plan
The Lateral exit is the movement or separation from one organization to another organization or venture. This occurs when an employee leaves an organization either voluntarily by resignation, abscondment or desertion or involuntarily by termination or dismissal.
When the decision to leave has been made, separation from the organization ought to be carefully approached in a way that will not leave sour tastes in the mouth of concerned parties.
It is a common knowledge, that separation from an organization or line manager is a very sensitive issue that can become a war. YES! A war if not properly managed.
Different managers have different reactions to intent of resignation. Some managers may be genuinely happy (or relieved), some may be afraid of losing an indispensable team member while some may feel betrayed…after all we are in this together why do you want to abandon the ship at this crucial time.
Efforts should be made to leave on a good note without grudges, this is necessary for both short-term or long-term career advancement.
The importance to exit or separate from present employer in the most amicable way cannot be overemphasized because;
- Most new employer sends a reference letter to past employers while conducting a background check and negative feedback may jeopardize chances of being hired.
- There might be opportunity to work for previous employer again in higher capacity. Do not burn the bridges.
- Strained relationship could affect future collaborations on projects or tasks.
- New employer or new role may not be as promising as initially projected. Ex-colleague or previous manager can help in getting other opportunities, or help in facilitating a seamless return to old position.
These are part of the reasons why exit by abscondment or desertion (when an employee leaves suddenly without giving notice or following due diligence) are not career-friendly.
The SMART Exit Plan
SMART plans are deliberate and outcome-focussed and should be aligned with personal values and career goal.
Elements of a SMART Exit Plan are:
S- SPECIFIC: Write a clear definition of what you want to achieve.
What specific role or job title would you like take on after this role?
What type of exit should you consider? Lateral exit or vertical exit? And How?
For Lateral exit, consider the company or industry you would like to work for and in what capacity?
M- MEASURABLE: Set criteria or measures that are quantifiable so you can chart your progress and determine success.
Criteria could include;
Number of specific relationship or connections you need to build within and outside the organization.
List of skills, expertise or certifications that should be acquired.
Certificate of completion of a course or training.
Letter of commendation or recognition.
Promotion letter, re-assignment letter at current place of work.
New employment offer letter.
A- ACHIEVABLE: Do you have what it takes to achieve your goal? Is it within your control?
While Lateral exit could be within your control, vertical exit may be subject to corporate policies and politics.
For Vertical Exit:
How would you add value and remain relevant in the organization?
What’s the plan to manage office politics and power to your advantage?
What strategic relationship would you have to develop?
Is there a policy on internal mobility or job rotation that can be leveraged on?
Are there relevant internal vacancies to apply for?
What are the requirements for promotion or career advancement?
For Lateral Exit:
What role would you like to apply for? Do you meet the job requirements? Do you have the relevant expertise or experience? If not? How would you achieve it?
What career opportunities are out there?
What type of organization can you work for and in what capacity?
What is your job search plan?
What network can you leverage on, for job referrals or recommendation?
R- RELEVANT: Ensure your action will move you closer to your aspirations.
Make sure your plan is aligned with your career roadmap.
The exit plan requires a thorough think-through- It is not and should not be a sudden or accidental action- every plan and strategy should be in line with your overall plan for career growth and progression.
Before you take on a new role, vie for promotion, take on new assignment, resign from current role or apply for a new job….
Take a moment to ponder on these questions…
Where do I see yourself in the next 5-10 years?
Will this current career path take me directly to the dream position?
Is there an urgent need to make a career U-turn, or make an inevitable career switch?
Will this new role help me to achieve my 5-10 year plan?
T- TIME-BOUND: Set a date and time limit.
How long should you spend on a particular role?
When should you begin the search for another job?
What precise date should you exit an organization?
It can be part of the plan to spend 2-3years on a role or 10-12years in an organization.
Caveat: The specific time to spend in an organization can be truncated when there are noticeable or perceived red flags such as hazardous/toxic work environment, restructuring, mergers & acquisition, hostile takeover, a buyout, among others.
To avoid being the corporate collateral damage, check for (or lack of) concrete plans for employees’ safety and job security and decide on the best moment to speed up your exit plan.
Meanwhile, if exit is by way of mandatory retirement- 35 years in active service or 60-67 years of age depending on the applicable employment law in-country, planning must be in top gear. One of the best ways to effectively plan for life after retirement is to consult your Pension or IRA (Individual Retirement Account) administrator.
However, if the plan after retirement is to take on a management or C-Level role in another organization, the race to a SMART exit should start immediately.
Exit plan does not come in a specified manual… it all depends on the career aspirations and future plans of the role holder as well as the opportunity at hand.
Nonetheless, continuous self-assessment and improvement, dogged commitment to job responsibilities, unwavering passion for adding values, alertness to changing work environment and development of strategic relationships are central to an effective Exit Plan.
What is Your Exit Plan?