The owner manager's burden

BY DAVID IRVING

Owner managers can’t resign. That’s the preserve of corporate managers, and to the sorrow of many an owner manager, the corporate manager gets paid to go as well.

Instead if an owner manager wishes to go and do something else, typically they must sell the business.

This simple insight reminds us just how much the lifestyle of an owner manager is interdependent with the business they own.

While the business and the owner manager are two separate entities, there is significant overlap between them — representing the guardianship of the business by the owner manager.

The business entity includes its purpose, values, core competencies, strategies, business model, assets, liabilities and cashflow.

The entity of the owner manager, however, is about yourself, your health, wealth, wellbeing, your relationships with family and friends.

The overlap captures the way the owner manager conducts themselves in the enterprise.

This covers all the management practices and processes including delegation, information systems, communication, staff objectives and top team performance.

The degree of overlap is influenced by the extent to which the business is the life of the owner manager. We have all heard that telling question ‘do you work to live or do you live to work?’

By not owning the company, the corporate manager is considerably less attached to the business. By comparison the owner manager is more vulnerable to the trap of ‘living to work’.

The overlap is influenced by physical features, such as does the owner manager ‘live at work’ — surely an extension on ‘living to work’!

There are many, many owner managers that fit this category including the mandatory vocations of farmers, sea captains and writers.

The discretionary vocations are considerably more including beauty therapists, doctors, designers, architects.

For these owner managers the separation of life and work is considerably challenging.

Given this close interdependence between owner manager and the business, whether completely overlapping or not, the question is how much do you really like each other?

How much are you a mirror of each other? Is the business a very good reflection of yourself?

Many an owner manager will say ‘I hope not’, in a self-deprecating way but actually if you are not aligned, then it will surely show up in symptoms of your behaviour, such as feeling out of step with the business or sick of it.

These expressions may arise from the challenge you are experiencing of managing the business all the way to searching for another interest.

If we think of the owner manager’s disposition on a scale of ‘burdened by responsibility and imprisoned’ to ‘excited by opportunity and fulfilled’ — then the satisfaction and suitability of the owner manager and the business becomes clearer.

This is not to say that just because an owner manager is burdened with a feeling of being trapped that this unhappy state cannot be alleviated.

Our programmes in the Icehouse have seen many an owner manager transformed by simple changes to work behaviours, including delegating with trust, receiving financial statements that tell them where the money is being made and setting business objectives annually with individuals that ensure the right work is done.

Equally, changing the owner manager’s lifestyle through better eating, sleeping, recreation and friendship can alter the owner manager’s disposition. Business planning is always a very good opportunity to test the alignment.

Under our approach to planning, the period chosen is based on a time not so far away that you cannot imagine it and not so close that it becomes another representation of today. Say five years.

We then imagine the business and, separately, ourselves in their prime condition. Compare that with today and see what has to be done to get there.

Are you, the owner manager, excited by the business expectation in 2015 and do you want to be part of the journey of the business to get there?

And from the business point of view, is the owner manager the right person to deliver in 2015? If the answer to both questions is yes, then go to it.

Ned Churchill and Virginia Lewis clearly illustrate the shift from early stage dependency on the owner manager to the mature stage, low dependency on the owner manager in their Harvard Business Review article ‘The Five Stages of Small Business Growth’.

As the stages of growth unfold, the energy and skills of the owner manager are overtaken by the introduction of professional staff; an organisation based on business strategy, practices and processes of budgets, planning, meetings and information systems.

The learning stage of business growth is of course very much dependent on the owner manager. As the business grows, its dependency on the owner manager reduces as management practices become more significant to success.

As I have written on previous occasions, there are certainly successful processes an owner manager can work through to extract themselves from day-to-day management of the company.

But for those of us who love what we do, then our joy is the opportunity to own and manage our business. To meet that responsibility we must constantly grow our ability to do both roles.

We know that the journey is forever, and we can never escape the challenge the business puts to us: are you the the right owner and manager to optimise the performance of the business?

- David Irving is an honorary professor at the University of Auckland Business School and a founder of the Icehouse

- Unlimited