With Great Power… Comes Great Responsibility

Owning a business can be a real rush with a sense of accomplishment and achievement never before experienced.

By Tim Miller

June 12, 2013

KEYWORDS business / decisions / experience / grow / owner / responsibility
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Those of us that grew up on comic books will remember what Peter Parker learned when he, refusing to use his new spider powers, failed to prevent the death of his beloved Uncle Ben.

He learned that, with great power comes great responsibility.

Being the owner of an enterprise confers great power and also great responsibility at several levels. At the simplest level, especially during the early stages of business growth, that power is the power to independently hire and fire and make all decisions about the business.

If all goes reasonably well, this can be a real rush with a sense of accomplishment and achievement never before experienced. You are the captain of your ship and you are off on your voyage and the seas are fairly calm and the winds favorable. What could happen?

It has been said that the two greatest curses are:
1. Not getting what you want
2. Getting what you want.

Another way of saying this is be careful what you wish for, because you just might get it.

Prepare for power

Very few entrepreneurs in our industry have prepared themselves specifically for business success through education and training, and they simply learn as they go.

That is the beauty (and perhaps hubris) of the entrepreneur. But as their business expands from its initial stage of simply existing, a chain of events is unfolding that most owners don’t see until they are in crisis.

The pattern looks something like this: Initially, the owner makes all decisions and is involved in all aspects of the business. As the owner, he charms customers, develops relationships with adjusters, agents and other industry connections, is out on every job making sure that everything is done properly and, therefore, the quality of the work and customer service is extremely high.

Needless to say, stakeholders are impressed with these levels of quality and service and the business grows. The owner is thrilled! Yet more proof of the soundness of his idea to go into the restoration business. Like Sally Field, they like you. They really, really like you!

Now the owner, seeing the clear mandate from this positive feedback, starts to add overhead. He may add equipment, maybe new vehicles and bigger quarters and so on — but the real seed of the problem that may surface later is the number of people that are added to the payroll.

If you have more business, then you need more people to handle all the production and administrative issues that have to be accomplished, correct?

Things may still cruise along just fine, for a while. The owner’s initial involvement in everything has created a wave of positive experience that will carry on for a period of time after he or she simply can’t be involved in everything and begins to delegate work.

This can be a period of false security because it appears that the plan is working. The new staff is in place and replacing the owner in many functions and things are still going great. This is going to work.

Business speed bumps

The problem is that the positive wave created by intense owner involvement can’t last forever and the new staff will eventually have to stand on their own two feet and their training. You have trained them, haven’t you? Sometimes this situation will be exposed by a warm winter or a source of business drying up and now cash comes to a screaming halt and the contractor is in crisis.

The owner has spent huge amounts of energy and capital getting the business off the ground. He feels that the new team he has hired can grow the company to the next step, but now business dries up and the company is in real trouble, and often the owner has no idea why or what to do about it.

The thought of firing most of his team and jumping back into everything is totally overwhelming from a personal standpoint. But he also feels loyalty to his people and the sense that if he lets them go now he will have to rebuild later — a daunting prospect.

Taking responsibility

The next level of owner responsibility is responsibility to the business. This is no easy thing for most business people to accept because they often feel so grateful to the key people that they have hired to get them from Point A to Point B.

Many times, they have had relationships that were too much like friendships than employer/employee relationships. They may have disclosed too much and treated them more as partners. They may have proved “The Peter Principle” and promoted certain people to their level of incompetence.

This is completely understandable because it is indeed lonely at the top. Many owners are plagued by not knowing what to do next (having never been there before) and seek companionship and input from others that are close to the situation.

It even seems like advanced management to ask the opinion of your team about the challenges the business faces. And, if that team has reasonable credentials and experience, it is advanced management.

But, more typically, what happens is that the team has just enough information and skills to get the company to Point B but no further.

Often, the reason why more skilled people are not on board is that the owner is unaware of the skills he will need in place to get from Point B to Point C. And, owners often do not want to hire people that may be smarter or more experienced than they are. A good rule of thumb is to hire people smarter than you, but that won’t stab you in the back.

To exercise his loyalty to the enterprise, the owner must come to see that throwing people at the problems of growth is not the answer. Upon investigation, many owners see that their people are actually doing a terrible job, so they start replacing them and then wonder why it is so difficult to find good people with common sense. You can find them. They’re running their own businesses!

More than people

The real issue is that the owner must understand that it is about the process, not about the people.

If the owner survives the crisis, he will start to see that the concept of the book The E-Myth is crucial. Each process must be examined, improved, documented, trained to and reinforced on an on-going basis forever if the business is going to return to its upward track.

An operations manual must be developed as if the company were a franchise prototype to codify “the way we do things around here.”

The ranks will need to be thinned to just enough to implement the processes, which are created to make the most efficient use of labor resources.

Hard decisions will have to be made at this stage to “free up the future” of certain employees who simply can’t help grow the business any longer. It’s hard, it’s sad and it’s sometimes excruciatingly painful — but with great power comes great responsibility.

Tim Miller is the president and chief executive officer (CEO) of Business Development Associates Inc. Miller is a highly regarded sales and marketing expert in the industry, and brings 30 years of experience and a unique perspective to help businesses solve their problems and grow to the next level. He is also a published author in several trade magazines and speaks at multiple industry events and conferences throughout the year, where he leverages his business experience in both the restoration industry and his other entrepreneurial ventures, including his own construction company in New Mexico. You can reach Miller at (773) 777-9956 or Info@theBDAway.com. You can also visit www.GoBDA.com for more information.