Identifying the correct roles for the owners

We’re at that time in the whole crisis where it’s hard to generalise across our client base. I know that most of you are working albeit at reduced capacity but that’s little comfort to those of you in hospitality, or entertainment who are prevented from doing anything.

This week’s Friday night email represents part two of our review of the ten vital ingredients for business recovery which was based on our interpretation of a huge research programme undertaken on the ten most common causes of small business failure.

This week’s is perhaps one of my favourite subjects because I get to talk about another of the books that have become a pillar of A4G; The E-Myth Re-visited by Michael Gerber.

The E-Myth is a bit of a bible for how A4G operates and compulsory reading for all new members of our team. I’ve given it to quite a few clients over the years as well, many of whom have said that they thought certain parts of the book were written about them.

The E-Myth talks about how a business owner needs to inhabit three different personality types:

1. The technician

Someone who is good at whatever it is that the business does. Most people start as a technician learning a trade or a profession and (usually) becoming quite good at it

2. The Entrepreneur

That person who started the business, got out there and got its customers, brought in new ideas and continues to innovate.

3. The Manager

The person who organises things, sorts out stuff that goes wrong, keeps an eye on the staff and control of the finances

Every business needs these personality types to succeed

Sometimes they may be different people but if you’re small you need to be all three.

Unfortunately, we are all better at some aspects than others. And sometimes we might ignore one (or more!) of the personalities we need to be completely. In fact, it therefore follows that there are 8 type of people and this is my advice to each of them:

The Techies

Those who are good at what they do but not entrepreneurial or good managers. By their very nature, techies work hard but often live in blissful ignorance of all the other things required to make the business a success.

My advice to anyone in that situation would be to not run a business at all but to concentrate on a career in a good organisation where there is opportunity for career progression. If you are running a business though, it’s unlikely that your business will succeed without employing someone with the other skills. Or maybe your spouse!

The Haymakers

Those who are good at sales and new ideas but not at actually delivering the work that the company does or organising it. These are the people who are most likely to have a massive success and make millions but also most likely to go bust.

My advice would be to find a business partner who is good at the other stuff and senior staff you can rely on to sort out the scrapes you get into! Haymakers rarely appreciate the contribution Organisers make when it goes right and usually blame external forces when things go wrong!

The Organisers

Those who clear up the mess that the Haymakers create. There are some great organisers out there who attach themselves to an existing business and implement the changes required to fix whatever problems it has. They are usually found tutting in a corner somewhere sorting out a catastrophe caused by a Haymaker and ignored by a Techie.

Organisers are often vulnerable to job loss once they have implemented the things they know and often move from one organisation to another. My advice to Organisers would be: Protect your back!

The Claustrophobes

This group usually do well for a couple of years but then run into problems. Because they are good at what they do, they will get new customers if they can find them. And their entrepreneurial spirit will help them find them.

The E-Myth talks about how a good technician can suffer an “entrepreneurial seizure” one day when something prompts them to start their own business. It may be frustration with an employer, a prompt from a family member or friend or perhaps redundancy. A lot of businesses are started in a recession. It’s worth bearing in mind for many of you if you are considering making important staff redundant that you could be creating a competitor! And giving them the capital to start.

An old acquaintance of mine called Keith who sadly passed away a few years ago, had his entrepreneurial seizure one Monday morning when he found out that his boss (Barry) had been sent to prison on the Friday. They’d all wondered why he hadn’t been in the office much for the previous two weeks!

So Keith set up in business.

But like many other Claustrophobes, Keith found that the success of the first year turned into a whole load of headaches in the second year. Claustrophobes want to be involved in everything and as a result they reach a ceiling in terms of what they can cope with. And then because they are good at what they do, they get one more customer. Now they can no longer cope and get into a cycle of problems.

At A4G, we love helping clients of this type. We can usually sort out the problems but most importantly we can also put management systems in place to achieve the organisation that the business lacks.

And maybe help recruit the right staff.

My advice to Claustrophobes: Put “call A4G” at the top of your “to do” list for Monday morning.

The Introverts

Those who are good at the work that the company does and good at organising it but lack the entrepreneurial spirit to drive the company forward.

The biggest challenge for these will be turnover and therefore profitability.

This can creep up on you as well. The old entrepreneurial spirit will fade over time especially if the business is jogging along making a reasonable profit. You don’t have to do marketing or sales because the work all comes to you.

But the Introverts might struggle in the next couple of years if their natural turnover has fallen as it probably has now. My advice to the Introverts would be: Order “The one-minute Salesman” to read, blow off the cobwebs and get back out there.

The Outsiders

This is an interesting group and there aren’t many of them out there.

But sometimes someone with a business background, good entrepreneurial habits and business skills finds themselves though accident or design running a business in a trade that they have no experience of working in.

This can present some challenges. New staff can be difficult because it is harder to spot those who aren’t up to the job quickly.

Making changes is difficult as well. There will always be resistant to change in any business and those who are resistant will now be armed with the “you don’t understand because you’ve never done this” line.

My advice to Outsiders would be: Accept that you are going to have to work harder. To understand the detail of what your business does and to build relationships with your Techies.

The All-rounders

The E-Myth tells us that this is what we should aim to be. A nice balance between those personality types and able to switch personalities as required.

If that’s where you are great; you should be able to build your business steadily even in a recession.

My advice to the All-Rounders would be: try and keep that balance. It’s easy to become out of touch and drift into being an Outsider. It’s easy to spend all your time looking inwards and become an Introvert. It’s easy to get so busy with the day to day that you drift into being a Claustrophobe.

Keep an eye on your Key Performance Indicators, make a point of talking to members of your team you haven’t spoken to for a while, find reasons to grow, change or improve. Maybe, find some time this weekend to watch the A4G video on the 60:30:10 rule of growth. Read. Keep evolving as a person. Remember that the only difference between a rut and a grave is the depth.

Next week I’m going to stay on the topic of the correct role for owners and explain how it works for partnerships, why most partnerships don’t work and what you need to do to make yours work.

Have a good weekend.