Let’s get this out of the way right now. A severance package is not an exit strategy. A severance package, which is basically the terms of disengagement, may be the culmination of an effective exit strategy, but that will be determined only after the rest of your strategy is firmly in place. In addition, an exit strategy is not just a plan to leave your current company, and it doesn’t have to be a terminal farewell.

So what is it? An exit strategy is simply a long-term plan that sets a course for your career. It answers the question, “What’s next?” What all executives must realize is that you aren’t limited to asking that question only after you get downsized or something else happens to you. It is often best to ask, “What’s next?” when your career is moving forward successfully. Let’s say, for example, that you were part of a team that just finished turning around a failing division, and, in the process, you realized that you have a passion for that kind of work. It provides the kind of challenge you love, and best of all, you’re incredibly good at it. But what happens when the turnaround is over and you find yourself back in your old job—a job you used to love but that now just doesn’t give you that rush? If you find yourself in a situation where your goals and skills are no longer in alignment with your job description, having a well-crafted exit strategy gives you the tools and safety net you need to move someplace—inside or outside your company—where you can thrive.

To sum it up, an exit strategy is a framework and safety net for thinking about next steps. It helps you articulate your vision of the future and what you hope to achieve throughout your career. To maximize your choices and options, this framework allows you to think about what those future goals look like and what they require.

CREATING YOUR EXIT STRATEGY
Putting together an exit strategy—like any other strategic plan—isn’t something that you just do once and walk away from. It’s a plan that’s constantly evolving, one that requires continual revisions and refining. It also requires an ongoing level of awareness and insight into the environment in which you operate. That means you’ll need to stay completely up to date on changes, major and minor, within your organization, including shifts in management structure, reorganizations, consolidations, lay-offs, share price, earnings reports, and so on. And you’ll need to be aware of any and all external forces that could affect your company, such as mergers, acquisitions, economic forecasts, interest rate changes, what your competitors are doing, how your industry sector is performing overall, and so on. (You should be doing all these things anyway—it’ll help you do your current job more effectively and may, in some way, reduce the chance that you’ll ever need to kick your exit strategy into gear.)

If that sounds like a lot of work, you’re right--it is. But a well-put together exit strategy is such a critical survival tool that we encourage you to make it a top priority. It does not, of course, have to be the centerpiece of your life, and you don’t need to spend hours on it every day. But it should always be in the back of your mind. You have an annual physical and go to the dentist a couple of times a year, right? But in between visits you try to eat right, get some exercise and brush your teeth (if you don’t, you should). Maintaining your exit strategy is very similar. Once or twice a year you need to sit down and do a thorough review of everything in the strategy, focusing on the big picture. But also think about how day-to-day events could affect you. As you read the Wall Street Journal or one of the trade publications that focus on your business, ask yourself whether what you’re reading could possibly affect you and your job, and how. Do the same thing when you go to trade shows or meet with colleagues from other companies.

As the old saying goes, “If you don’t know where you’re going, you won’t know when you get there.” You should have some idea where you want to go next and what it’ll take to get you there. But remember, the plan is fluid. Decisions you make about your exit strategy or your next step may change in response to internal or external events. You can’t let your exit strategy become stagnant or rigid, and you can’t lock yourself into a single path. Have short-term goals, think regularly about long-term goals, and then remember that life happens.

Every strong, effective exit strategy must include the following four elements:

1. Creating an exit fund
2. Organizing a personal board of directors
3. Increasing your professional marketability
4. Leveraging your network

Don’t confuse an exit strategy with a severance package. They are not the same. The exit strategy is a “next step” formal plan. Continually revise, refine and update your exit strategy … it isn’t a one-shot deal. Set aside a financial reserve to see you through a year of unemployment. This is called an “exit fund.” Organize a personal board of directors that will serve as your “go to” people. Work to increase your professional marketability and leverage your formal and informal networks.

Exerpted with permission from I Didn't See It Coming