| As a business moves from its start-up to survival and | | | | internal organization of the company. How many |
| then to success as a small or medium sized business, | | | | departments are needed, how quality is used in the |
| the owner must be heavily involved and is vitally | | | | organization, how often financial statements are |
| important to the organization. Many individuals | | | | reviewed, the role of family in the company, whether |
| completely misunderstand this role which explains the | | | | real estate is held separately from the main |
| approximate 50% failure rate for most small business | | | | company, whether we hire the best people or the |
| startups over the first five years. | | | | employees we can currently afford, do we want all |
| Understanding the basic guidelines of the ownership | | | | employees to feel like valued team members, do we |
| role during the initial phases of an organization’s | | | | want do we have an outside Board of Directors and |
| growth will not guarantee your success but will | | | | does the company allow outside or employee |
| greatly speed the process. However, no one can | | | | ownership. The Company Culture cannot be |
| guarantee the success of your organization except | | | | delegated and cannot be formulated until the Vision is |
| YOU. I have listened to the term “absentee | | | | laid out. |
| ownership” for the past thirty years and continue | | | | The third role of the owner is to hire and retain |
| to laugh every time I hear this phrase used to | | | | Senior Management. After finalizing the first two |
| describe the individuals or legal entities that place the | | | | roles, the owner can now determine what the |
| monetary funding into an organization. Please | | | | company requires in its senior managers. Since the |
| remember the title of this article – Roles of | | | | owner will delegate some or all management |
| Ownership that cannot be delegated! If you disagree | | | | functions to these individuals, the Vision and Culture |
| with this statement, please spend some time | | | | will define management responsibilities, the |
| discussing your business with a Venture Capital firm. | | | | manager’s personal qualities and strengths, their |
| These firms believe very clearly in this these maxims | | | | ethics, their morals and their experience level. You |
| and drive many small business owners crazy with all | | | | would not buy a television until you defined what the |
| their rules and guidelines when they invest in a small | | | | maximum size can be, where it will be located in your |
| business. | | | | house and what department store has the best deal. |
| These four requirements will mature and change over | | | | Neither should any owner think about hiring a senior |
| time, which is normal, but none can be delegated. | | | | manager until the Vision and Culture are properly |
| The first role of the owner is that of Visionary. | | | | established. The Vision and Culture must be |
| Please understand that I clearly wrote | | | | communicated to every prospective senior manager |
| “visionary” and not “dreamer.” | | | | and he or she must fit the Vision and Culture. It is |
| Everybody has dreams of the next great product or | | | | not a matter of whether the prospective manager |
| service. The trick is taking a dream and creating the | | | | can accept the Vision and Culture but if he or she fits |
| vision. My business definition of “Vision” is | | | | the company’s Vision and Culture. No |
| changing a dream into a business plan, a clear | | | | prospective employee will be an exact fit so the |
| business mission statement, and creating an | | | | owner must prioritize the importance of each piece |
| organization to manufacture, assemble and/or sell the | | | | of the Vision and Culture and weigh the fit by the |
| dream. This definition clearly separates the business | | | | prospective senior manager. Many successful |
| owners from the dreamers. There are over | | | | companies have found outside firms that can provide |
| 40,000,000 business organizations in the US today | | | | personality and attitude testing to assist in |
| that have made that jump from dream to vision. | | | | determining the fit. |
| These range from your local insurance agent, | | | | As the company expands and senior managers begin |
| McDonald’s franchise, and your Buick car | | | | hiring employees and the next level managers, the |
| dealership to Microsoft or IBM. Every one of these | | | | Vision and Culture will be changed and degraded if |
| organizations started with one or more individuals | | | | senior managers are not a good fit. Failure is |
| sitting at their kitchen table putting the plans in | | | | inevitable when departments and employees within |
| motion to convert the dream into a true Vision. As | | | | the company start varying from the owner’s |
| the organization grows, the owner can and must | | | | Vision and Culture. Hiring Senior Management cannot |
| educate employees in the company’s Vision so | | | | be delegated. |
| that all employees share the Vision. The owner must | | | | The fourth role of the owner is being the final arbiter |
| continuously nurture and guard the Company Vision | | | | of all company decisions. Decision making can be |
| to ensure the path is straight and never varies. | | | | delegated to senior management but what happens |
| However, the Vision cannot be delegated. | | | | when senior management cannot resolve the issue or |
| The second role of the owner is to establish the | | | | decide where company funds are to be prioritized? |
| Organization’s Culture. Every successful business | | | | No small or medium business has unlimited resources |
| is a living, breathing and growing organization. Small | | | | in most areas. Capitalism is a tremendous concept but |
| business owners normally spend more time with their | | | | it was never meant to be a democratic process. To |
| business than they do with their families. Every | | | | restate a well known religious saying, “The |
| business reflects the integrity, ethics and morals of | | | | Golden Rule in Business is He who has the Gold, |
| the owner, whether it is by accident or designed. | | | | Rules.” The owner must always be willing and |
| Naturally, successful owners design the | | | | ready to be the final arbiter in every matter, every |
| company’s culture up front. This does not | | | | day. When you, as an owner, hire the right senior |
| require a great deal of thought as each of us has a | | | | managers and have a well thought out and |
| well defined set of ethics and morals which we have | | | | communicated Vision and Culture, this role can and |
| come to embrace over our lives. The only trick here | | | | should be very minimal. Since we sometimes have |
| is if we, as owners, decide to change our ethics and | | | | trouble finding the perfect managers, this role can |
| morals and use the business as our testing ground. I | | | | come into play often. I recall a business owner who |
| can absolutely guarantee a company’s failure | | | | took a two week trek into the backwoods of |
| under this scenario. | | | | Colorado and come back to a company that was |
| There is no right and wrong when it comes to the | | | | completely standing still because no decisions were |
| company culture. We have all seen highly disciplined | | | | made in his absence. The company went out of |
| firms, multi-ethnic firms, firms that believe in | | | | business 90 days later because the owner decided he |
| community service by all employees, firms that allow | | | | did not want to accept this fourth role. This |
| employees to work from their homes, firms that | | | | ownership role cannot be delegated. |
| believe in healthy employees with wheat germ and | | | | While these four roles seem quite simple and |
| fruit juice instead of coffee and soft drinks, firms | | | | common sense to many business people, I am |
| that believe in high quality, firms that believe in selling | | | | always amazed at how many small and medium |
| the cheapest product possible and firms that only | | | | business owners do a great job of establishing these |
| want MBA’s on their payroll. Your company | | | | principles when they start their company but then |
| culture will determine the employees you hire, the | | | | get caught up in the daily operation of their business |
| customers you call on and the suppliers you buy | | | | and do not review these four roles again. Continuous |
| from. The culture has to be communicated to and | | | | Improvement is a valuable mantra in all successful |
| understood by all employees and will be noticeable to | | | | businesses and demands that all concepts, including |
| suppliers and customers as well. | | | | these four roles, are reviewed and improved on a |
| By defining the company culture, the owner | | | | regular basis. |
| automatically establishes the basic structure and | | | | |