No one will argue that there’s a stark contrast between business owner and employee. Most employees will never become, nor want to become business owners, and that’s perfectly ok. However, for those that have made that transition, it often feels like a career change, despite being experienced in the industry. This can make it difficult for some to adapt, and running a business becomes more of a headache and hassle, while optimism fades. This is the first article in a series of topics designed for both transitioning and established business owners, discussing the mindset shift necessary for making this change.
Owning a company is more than simply an exercise in capitalism, it’s about truly owning the business and all the decisions made in execution of the corporate strategy. As an employee, you know your job and what’s expected of you. If you fail to fulfill the tasks associated with your role, there are likely consequences from your manager. As an owner, while there are outside forces to hold you accountable (IRS, FTC, etc.), you alone are responsible for your operational decisions. You went from being able to ask for guidance or allow someone else to make difficult choices, to others relying on you making the best decision in a given scenario. This means you have to make sound decisions. As a rod man, you might have an issue arise where your crew chief must step in and tell you how to proceed, but you become more accountable as you move up the chain of command. An owner must make critical decisions and stand by them. Making sound and ethical decisions isn’t the mark of a good businessperson, it’s a requirement for doing business. Your decision doesn’t necessarily have to always be perfect, but if it were done so with integrity, no one can fault you if things go awry.
When you were an employee, you knew what your role was and how you fit within the company structure. You typically stayed in your lane and didn’t try to overstep your bounds. A rod man isn’t going to be consolidating a balance sheet; just as a project manager isn’t going to be running a marketing campaign. Multitasking doesn’t really exist. What we normally consider it to be is actually a much more dangerous, and less efficient, switch-tasking. As an employee we are best at doing our jobs and not deviating from our roles. This is where we can provide the most value for our employer. As an owner, we have to be able to wear many hats and think about the big picture. We try to multitask but if we go from solving a field-work issue to balancing our books, to developing a growth strategy, we aren’t multitasking, we’re switch-tasking. Much of the time in between each task, even when constantly going back and forth between them, is spent reorienting ourselves and figuring out where we left off. This creates inefficiencies and waste (waste is a four-letter word in the business world). We need to find a better way to manage when we’re at the top.
As business owners, we often spend significant portions of our day doing tasks we are simply not very good at. Sometimes we do this out of necessity, as small businesses don’t have robust office staff, and sometimes because we want the job done our way. This is a fallacy, because even if we do a task the “right” way, it doesn’t mean it’s efficient. There’s a quote from a book called “The Goal” by Eliyahu Goldratt that I often think about. It says, “The capacity of a plant is equal to the capacity of its bottleneck.” Granted, in the book they’re talking about lean manufacturing, but it’s still a great quote. Just because you are able to do these things, doesn’t mean it’s any more productive or “better” than someone else doing them. You may even be doing more harm than good! If they are taking too much of your time and pulling you away from more important tasks, then you create a bottleneck, which in turn reduces the capacity (potential output) of your business. There are a few questions I typically ask when discussing this with others: 1) “Is there a better use of your time?” and 2) “Can someone else do it?” To the former, I would bet more often than not, there are a lot better uses of your time as a small business owner. To the latter, there’s a surprisingly easy way to answer this, and that’s by asking a follow-up question: “Can someone else do this task at least 80% as well as you can?” If the answer is yes, then it’s time to delegate that task. If the answer is no, then why not? Are they not trained well enough, not competent enough, or something else? You may even find the skills just don’t exist within your organization. This can be solved in a number of ways, from hiring someone online to do said task, hiring an employee to come on board part- or full-time, or by empowering an existing employee with the tools and abilities to do so. No matter how you choose to solve this problem, letting someone that is capable of producing a good outcome is a great way of limiting your workload and allowing you to focus on higher-level decision-making.
There is no straightforward or simple answer on how to successfully run a company. Too often we think we have the solution, but outside forces require us to adapt to the ever-changing landscape of business. Rather, we have to adopt a mentality that allows us to make decisions quickly, trust those people we have hired for specific roles, and not be the bottleneck in our company. Project management in the tech sector uses an “agile” system that enables them to pivot when necessary, and business owners need to have a similar mindset and be ready for whatever comes next. Again, these ideas aren’t so much characteristics of a good businessperson, they’re becoming a minimum requirement for success.