What should be done so that the influence of the hired manager does not harm the owner? Who should be responsible for business ideology? How to distribute responsibilities between the owner and the hired manager?
When the owner transfers the day-to-day management of the company to a hired manager, there is a threat of weakening or even loss of power. To avoid this, it is necessary to clearly delineate the functions and areas of responsibility of each of them. This is how many PPC marketing agencies have done it and improved upon their business growth.
What Should Be the Approach?
One day I was approached by a business owner who had previously successfully hired a director. For five years, he formed a strong team, developed the company, and the owner regularly received his dividends. At some point, the owner discovered an opportunity to make a significant leap forward in the development of his business, but while trying to implement this idea, he faced the fact that he could not influence the company’s management. In fact, during this time he lost power.
After conducting several interviews with the leaders of this company, I came to the conclusion that in this case it is better for the owner to leave everything as it is. Otherwise, he would have had to remove the director and the most competent leaders. This would definitely lead to tangible losses for the business and the owner. It’s just that over the past five years the director – a talented and skilful leader – took power into his own hands, and the owner lost this power.
In order not to get into a similar situation, a business owner must understand that he should not give the functions of an ideologist into the hands of a hired leader. The only sane way is to do the job well yourself. And the director is required to do his job – to manage the company in such a way that it follows the goals set by the ideologist.
Functions of the owner-ideologist
The functions of the owner-ideologist include:
- Formation of the company’s mission (ideological goals and business plans).
- Approval of all fundamental company policies (regulations, principles, codes, fundamental instructions, etc.).
- Formation of strategic plans and control over their implementation.
- The first point includes not only the formulation, but also the constant promotion of these values among the company’s employees. The further the business owner is from ordinary employees; the better such communication should be. Employees should learn about the mission and ideology of the company directly from the owner; this function should never be transferred to managers.
- Generally speaking, the formation of ideology itself is in some conflict with operational management. Fulfilling the function of an ideologist, the owner inspires employees, fills their activities with meaning. And the director of the company must demand, control and achieve. These two functions do not mix well with each other.
- The second point is necessary so that any regulations and policies that are applied in the company, firstly, fully comply with the ideology, and secondly, come from the owner, thus strengthening his influence. It does not matter who has developed the policy – the director or one of the leaders, in any case, it is published on behalf of the owner and is binding on all employees without exception.
- The third point – the owner must reserve the formation of strategic plans. We are not talking about plans for the development of individual divisions, but about plans that cover the entire company and take it to a new level.
- This does not mean that the owner has to develop such plans with his own hands. It can and should involve executives or even outside experts. But these should be his strategic plans, and then he instructs the director to develop projects for their implementation. Thus, the owner has both power and control, as he regularly checks the progress of projects.
- The main idea to understand is that you strengthen your power over people when you get them to realize your ideas. Every time you succeed in doing this, it adds power points. If you fail, it reduces your “power points”. There is nothing mysterious about this: make people do your will – and your power over them will be strengthened; let it fail and it will weaken.