29/03/2012

By Guy Rigby, Head of Entrepreneurs at Smith & Williamson

In their book Growing Your Business: A Handbook for Ambitious Owner Managers, Gerard Burke, Liz Clarke, Paul Barrow, and David Molian describe the owner-manager as developing across specific roles over time. These roles include 'artisan', 'hero', 'meddler' and 'strategist'.

They put forward the proposition that the majority of owner-managers start businesses in areas and disciplines in which they have a degree of expertise or skill. “A plumber who plumbs, an accountant who accounts, or a solicitor who solicits is an artisan,” explains Gerard Burke. In general then, entrepreneurs 'stick to their knitting.'

As they generate sales and customers, the next phase of their development involves recruiting or subcontracting to help them deliver their increasing workload. This can often be one of the busiest points in the journey. As the individual with the most skill in the core area of the business, but also 'the boss', the owner-manager evolves into the ‘hero'. Not only are they still working in the business and servicing customers, but they are also getting the business in and getting the invoices out, while simultaneously managing and training their staff.

As a consequence of this pivotal (but hopefully temporary) role, a huge part of the early stage owner-manager’s time is spent fighting fires, because everyone comes to them as the main point of contact — customers, staff, suppliers — they are the hub and the hero of the business — the person that the entire business revolves around and depends upon. This role is self-perpetuating because, the more problems they solve for others, the more likely they are to retain their role as chief firefighter.

Unfortunately, this period of development can be self-limiting and will often prevent the business from growing. The owner-manager is typically too busy to focus on growth, with his hands tied to turning the daily handle.

So what’s the way out? Put simply, the way to break through this frustrating glass ceiling is to begin to build infrastructure, recruiting additional management to take on some or even most of the responsibilities that were once the domain of the owner-manager. In practice, however, human nature and an all-too-common reluctance to let go can make this fundamental behavioural shift particularly difficult.

Breaking through the barrier of owner-dependency can take the entrepreneur through a transition from ‘hero’ to ‘strategist’, empowering the team and enabling the business to reach prosperous new heights. However, it can also lead to the ambitious entrepreneur disrupting the business by seeking new and disruptive levels of heroism (e.g. the introduction of new business ideas or diversification) or assuming an unwanted role; that of the 'meddler'. Either way the business can be held back and its growth stunted.

“Many owner-managers fall into the trap of becoming what we call the meddler because these people that they have employed, of course, don’t do things quite the same way as they did and by definition, therefore, it’s probably wrong,” says Gerard.

So, while the well-intentioned wish of the owner-manager is to make the business successful, unwarranted interference is dangerous. Meddling undermines rather than builds confidence, it stifles skills rather than cultivating them and it demoralises rather than motivates.

Owner-managers often feel that nobody can deliver in the way that they can and yet, in order to become good leaders themselves, they must recognise the value in helping others, taking a long-term view on the personal development of their team and empowering them at every level. Great leaders spot potential and unlock it, they allow other people to prove their worth, progressively 'passing the ball' and generally starting by enabling others to take over non mission-critical tasks before delegating full responsibilities.

“The hardest thing for many owner-managers to take on board is an acceptance that they will contribute more by doing less,” comments David Molian.

Non-meddling owner-managers are able to focus on their goals and tasks than those who are constantly drawn into the minutiae of the business. The empowered staff who are being paid for their experience and skills will be better able to get on with theirs too. In this environment, everyone’s a winner. Delegation and trust are not only efficient, they boost morale and productivity.

So how do you stop being a hero or a meddler? David suggests that, when an owner-manager is approached to solve a problem, he or she should ask their staff what they would do to solve that problem. In doing so, heroic firefighting will be reduced and trust in the management team and its capabilities will increase. It's also important to create clear roles because “it’s a lot less easy to justify meddling if there’s clarity over who is supposed to be doing what,” says David.

And so we come to trust, an essential part of the journey from entrepreneur to leader. Colin Powell, the former US Secretary of State, once said that "Leaders are those people who create the conditions of trust so that great things can happen."

Trust defines leadership. You cannot unlock the potential of your team unless you build trust and unless they feel they are in a safe and trusted environment.

“Trust is efficient,” says Julie Meyer, co-founder of First Tuesday, Ariadne Capital and the Entrepreneur Country movement. “If you can operate on trust in a business, people will move faster and feel comfortable creating value in the organisation, rather than questioning why they should do that little bit more. Trust sets the tone of the business. Leadership, for me, is about creating those conditions of trust, while management is about holding people accountable for what they need to get done.”

For more information on reducing owner-dependency in your business please contact Guy Rigby on 020 7131 8213, or email guy.rigby@smith.williamson.co.uk.

Disclaimer
By necessity this briefing can only provide a short overview and it is essential to seek professional advice before applying the contents of this article. No responsibility can be taken for any loss arising from action taken or refrained from on the basis of this publication. Article correct at time of writing.

Smith & Williamson Limited
Regulated by the Institute of Chartered Accountants in England and Wales for a range of investment business activities. A member of Nexia International.


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