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Do Owners Make Good Managers?
Tips for Managing a Business
by Julie-Ann Amos
Julie-Ann Amos is a freelance consultant within business, management and human resources. She has worked in the RAF, the public sector, retail, recruitment and banking – in as far locations as New York, Hong Kong, Scotland, and the Falkland Islands. Currently, she works part-time, consulting with a banking institution in the City of London, and freelances during the rest of her time.
She is the author of a number of books published by How To Books on management topics.
She lives in London with her husband, a wonderful garden and a small menagerie, including a Siberian Husky, and a very helpful cat who likes to type and play computer games!
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During business start-up, owners do everything from bookkeeping to making tea! As the business grows, tasks become larger, and people are recruited to help. The owner becomes the owner-manager of the business and its employees. The problem is that the skills of starting and operating a business are different from the skills of managing one.
When businesses become big enough, owner-managers have the luxury of hiring someone to manage for them. But until then, they have to cope as best they can. So do owners make good managers?
Personal Life
Very often owner-managers' personal and business lives are intertwined. Houses may be used as security on financing; pensions and personal finances are entangled with the business dealings, and many personal expenses are paid by the business. Friends become business partners/advisers, and business contacts/clients become friends. Employees, on the other hand, have to keep personal life and working life separate. They can find it hard to understand the complex links between personal and business life for the owner-manager. And the owner-manager can sometimes find it hard not to treat employees as part of the family - which almost invariably means poor management.
Corporate Culture
Because of this personal/business life blurring, owner-managers often operate in a way that most employees cannot. Long lunches, trips home or to the gym during the working day, personal phone calls, casual dress, personal decorations and effects in the office, mingling of personal and business expenses - all these things can have two effects. Firstly, they can mean the business is operated in a casual way. Employees see the owner-manager's behavior, and start to copy - with personal calls, flexing hours etc. This can cause huge efficiency problems. Alternatively, employees may resent this double standard and feel hard done by compared to the owner-manager's working conditions. In any event, the business is rarely managed well under such conditions.
Personal Status
The owner-manager owns the company. It is his/her life, and they care deeply about it. It can be hard to understand employees who are just doing a job. Often, owner-managers place unrealistic expectations on employees, and feel betrayed when they are let down. It can be too easy to take things personally, because you are the company.
Responsibility
Owner-managers own the company. The employees don't. Therefore, while they may be loyal, committed and honest, they don't view success or failure as the be-all-and-end-all. If the business fails, they will need to find another job, but they probably won't face the personal ruin of an owner-manager - and loss of their house, car, reputation.
Stress
Owner-managers are under constant pressure to make the business a success. But they also have the added pressure of knowing that failure will make them responsible for loss of livelihood for their workers and their families. This can be a huge burden, and cannot be underestimated, especially where staff have been with the company a long time, and families are known personally. Passing that pressure onto others can make owner-managers harsh, demanding task-masters.
Time Management
Owner-managers are often good time managers of their own time - they had to be to build their business. But managing a business and other people is different, and owner-managers often juggle hopeless schedules and commitments. Delegating properly is the way out, but this in itself takes time. To be good managers, owner-managers need to make time to train and delegate others, and then leave them to get on with it.
Expertise
Frequently, the owner-manager is a technical expert in the business. No-one knows quite how to produce that product as well as them. It can be hard to let go of being the expert and let others take over. But failing to do this isn't just bad management, it can cripple a business. You can't be expert in everything - let others do what you hired them for. Unfortunately, all too often the one thing the owner-manager isn't expert in is management. Yet this is the one thing that the owner-manager needs to be, to make it succeed. Management training may be necessary.
Control
Owner-managers usually need (and like!) to be in control. Therefore they can be autocratic; hard to work for. Understand the differences between you and your employees - it can make you a better manager.
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