Owners and Managers Don’t Mix

On a fairly frequent basis, I have occasion to talk to business owners and business managers through my work. One owner made a fairly astute observation about the role an owner plays in a business versus the role a manager plays in a business. It was summarized as follows:

An owner and a manager of a business cannot exist for an extended period of time in a single individual.

Of course, there is a limitation built into the statement itself – most businesses start out as a single person, or a couple of people, and only over time does the business grow to the point where ownership and management can be split into separate people. Perhaps another way of looking at this is that when a business starts, its concern is tactics, or how it will survive in the short-term. As the business grows, an additional concern begins to take shape in the form of strategy, that is, how the business will survive in the long-term.

The same person cannot deal with both tactics and strategy at the same time. The simple reason for this is that the two are frequently at odds with each other. An action might be needed to manage cash-flow today which removes funding from a project that will carry the business through the next year. Neither option is right or wrong, but a single person is not likely to be able to balance both needs fairly.

The owner is generally concerned with strategy, since their role is the ultimate bottom-line of the company. This means that the owner is likely to be out chasing sales, to be out bringing in more business of the nature in which the business is intended to grow. That being the case, it would not be possible for that person to also manage the day-to-day business of the company. As a result, one of the first hirings a business will find itself making is to get that of an operations officer, or office manager, who will take over that aspect of the business, allowing the owner to focus on the future.