52 BD GEMS : 43

Gem 43 : The business owner

If you are an entrepreneur and you own your own company, you are obviously also “owning” your business. For large companies, ownership in the legal sense, is often a complex matter. But the topic of this post is not so much the legal ownership of a business, but rather the sense of ownership. By creating a sense of business ownership, the positive dynamics of entrepreneurial behavior are cascaded down in an organization and they affect many company individuals. Employees that experience a sense of ownership in their work, usually see their work environment as an extension of their personal life and tend to enjoy both equally. They are inclined to love their job and work feels to them, as refreshing as their leisure time activities. A perfect balance.

Owning the business is about responsibility and autonomy. People forced into conformity, give up ownership and often feel used and manipulated.

The most common way to define business ownership in an organization, is by assigning P&L responsibility. You carve out a domain where the business owner, as a real entrepreneur, can be autonomous and run her/his business, as if she/he was running her/his own startup.

The trick in this organizational design, is to avoid domain overlaps and where they occur, to have good recognition rules in place.

Let’s assume you work in a 1000 people corporation and you get your domain assigned. And within this domain of responsibility, you carry P&L responsibility. You come across this great new customer, and the deal is evolving well. With hard work and persistency, you will win and you will generate a great additional income for your business line, and for your company. Then you are informed that the additional income, generated by this new opportunity, will not be added to the top line of your P&L. Instead it will fall into another revenue category in your company. Bummer. What do you think this will do to you?

Of course you will not drop the deal. Your loyalty to the company is larger than your entrepreneurial drive. But part of that entrepreneurial drive is damaged.

Good agreements at company corporate level are essential to prevent this type of disappointment.

The same story is true for Business Development Managers. Maybe not always with full P&L responsibility, but at least with top line and often margin responsibility. Sense of business ownership and feeling responsible for a customer and the customer’s needs towards your business, are one of the strongest drivers that energize a Business Development Manager. Reassigning the recognition of generated revenue to someone else, destroys that energy.

A key to business success is a careful design of rewards schemes, where top line and margin are correctly assigned and ambiguity is avoided.