Would you Hire You?

Today’s Wisdom

Imagine you were applying for your own job. What are the skills, knowledge and experience you need to be the ‘managing owner’?

Take a very objective approach to what the Accountability of the role are.

?

This begs the question what is the difference between you, as a managing owner, and an employee who is a business manager?

My view is there is no difference in the function but a huge difference in the perception of value of the position.

Before I explain why I have this opinion, here is some information on the Small and Medium Business (SMB) market.

The backbone of the Australian economy is the SMB’s. As of June 2023 there are 2.5 million businesses employing 5.2 million people (source).

Here is a link to an article

The information in this RBA October 2023 report is a great source of information for businesses.

Here is a link to the RBA Article

I recommend you grabbing a cup of your favourite beverage and read this RBA article.

There are some canary in the mine indicators that will be impacting SMB Owners over the coming years.

I’ll have more to say about this in the upcoming Monthly Bulletin.

So why did I ask “Would you hire you?”

The point of the question is to challenge the general thinking that there is a difference in the skills needed to run a business as the owner or as an employee.

I’m not referring to a 1 or 2 employee business. You would be classified as a Supervisor or Team Leader in a large organisation.

I’m referring to a business with between 15 and 70 employees. The business has a revenue spine and a support team wrapped around the spine.

So what’s the difference?

I think the confusion comes by thinking that because a business is privately owned that the owner is an entrepreneur and therefore has a different role to play.

If we drill down on what the behaviour of an entrepreneur is:

• They introduce new ideas, products or services.
• They are comfortable with high risk strategies.
• They have a High Growth mindset.
• They challenge the status quo and are disruptive.
• Think the likes of Cliff Ohbecht and Melenie Perkins co-founders of Canva. Brian Chesky and Joe Gebbia co-founders of Air BNB

On the other hand, there is the ‘technician owner’:

• Establish their business to compete in an established industry with existing products they know.
• Are more risk-averse.
• Are more content with stability and profit.
• Look at incremental improvements in their business.
• Are happy to play in existing markets with minimal disruption.

Sure they try to differentiate themselves with the status quo, but they are not strictly entrepreneurs.

And why is it important that the owner understands which profile they fit?

Hence my question.

The inspiration to write this week's message came from a conversation I had in a Podcast recording.

The Podcast is coming soon, I promise.

One of my guests offered an insight that I thought was one of the cleverest and humble statements I have ever heard from a business owner.

He said he applies for his position as the head of the organisation every 6 months.

Why I love this concept is it a mindset shift from having a right as the owner, to a privilege to serve.

I know a lot of owners say “Yeah, but I’m the one taking all the risk!” Yes but your staff have joined that risk too.

It’s much safer for an employee to work in a stable, large organisation that has a pathway for a career, and is guaranteed a salary every week.

It may not be as enjoyable with all the politics, but from a stability standpoint it’s a much better place if you are happy to conform.

So SMB’s are where the rebels and misfits hang out. The ones who are prepared to ride the roller coaster with you and your crazy vision.

Given this background, wouldn’t you want your loyal staff to be led by the person who is best qualified to do that?

Decide which one you are. Entrepreneur, Managing Owner or a Skilled Proprietor.

Let me flesh this out a bit with some context between the skills required to be a manager in a large firm vs that of a SMB owner.

Assuming the businesses being managed are the same size, product and market, the skills needed to manage these businesses are identical.

?

There is no difference.

Inside a large organisation, the qualifications of a Manager are typically built over years as an employee who progresses up the ranks.

They usually work for multiple organisations, and develop knowledge and experience on the job and through formal education.

They may have also been lucky enough to have a Mentor, but not always.

They are appointed to an existing position in an existing infrastructure.

They have an existing revenue stream and support team.

They are selected and retained because they follow the corporate playbook.

The Business Owner on the other hand has typically started their business as a ‘technician’.

They’ve spent some time as an employee and felt they could do a better job on their own.

They believe they will have more time (and hopefully money) and be the master of their own destiny with no boss.

They make their own rules.

And as the demand grows for their service, the technician expands the business capacity by hiring more people who do the doing.

And now they need to develop managing skills like budgeting, people (emotional management), compliance, and decision-making becomes a lonely solo sport.

The difference is the business owner builds their infrastructure underneath them versus the business manager drops into the top.

But eventually they end up at the same spot but with a very different set of skills.

Remember early in this article I suggested that you read the ABS article. What was your reaction to that suggestion?

Was it, I don’t have time to read that. “How would it add any value?”

Or, “I need to look at that because I might help me with my strategy.”

Your reaction is an insight into your mindset as a Managing Owner.

There’s no judgement in this and there is nothing wrong with being a Technician.

In my current role as a Management Consultant, that’s exactly what I do.

My experience and knowledge is useful to my clients, but it’s broadly irrelevant to running a solo operated business.

So it’s important that you be honest with whether you match the skills needed for the Managing Owner of your business.

Do you have a list of Accountabilities for your position?

Whether you are in a start-up solo phase or at the exit point of your business, taking the time to evaluate your value to the organisation reveals a lot about whether the business will achieve its vision.

The beauty of this process is that unlike an employee, you have multiple choices on where you want to play.

• Keep going just as you are because you have everything the business needs.
• You can educate yourself in areas that would benefit the business and is of interest.
• You can reallocate yourself and still be the owner, just not the Managing Owner.
• You can stay on the Managing Owner and build the support team around you to fill in the gaps.

The first step is to get the Accountability list completed.

If you need help with this or need to understand more let me know.

#inspiringbusiness #businessexitstrategy