Why owners should disappear

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Many businesses in our industry are led by first-generation owners who tend to be very involved in their businesses. After all, they started the business and have probably been the main driver of its growth over the years. Furthermore, these leaders have every right to be actively involved. They own the business. They can do whatever they want, and many want to remain involved. They aren’t ready to retire or sell. So, what’s the issue? Why should owners disappear?

The issue is that businesses with owners who are actively involved in certain areas are less able to survive the inevitable transition to new ownership or new leadership. Whether these owners like it or not, someday, they will no longer be in charge. If this is true (it is), then it’s wise for an owner to position his or her business for a successful transition, recognizing that an important aspect of a successful transition is his or her involvement in the business.

Now, I am not saying owners need to disappear completely from their businesses. Don’t be mistaken by the title of this article. There are many areas of a business where an owner has an important role. But, there are other areas where the owner’s presence actually may be hurting the business, especially during a transition in ownership. Let’s look at a few of these areas.

Sales

This is a tough message for many owners because they’ve always been the rainmaker, the deal-maker, the closer. They take great pride in their abilities in this area and believe that nobody can be as effective as they are. All of this may be true, but when the owner is the rainmaker, the deal-maker and the closer, the business and the owner are inseparable. The sustainability and value of the business are greatly diminished if the owner retires, sells or has a health issue. In other words, owners would do well to disappear from sales.

Now, I’m not saying owners should disappear entirely from sales. They may provide some level of sales support or training. But, if sales depend on their presence, they are too involved. When sales are made regardless of the owner’s involvement, you know you have arrived. At this point, the owner has effectually disappeared from sales.

Operations

This is a tough message for those owners who love being in the trenches, running equipment and working in the field with the crews. They are the masters of solving complex logistical problems. They schedule crews and routes with expert knowledge that nobody else has. They know where every truck and machine is located at any given moment. They believe that nobody could be as effective as they are in this area. This may be true, but everything stated above regarding the sales function applies here as well. The sustainability and value of a business increases when the owner disappears from operations.

When other people aside from the owner are able to sell work and manage operations, the owner is no longer the key to success. The business has become more of a turnkey enterprise, which is highly desirable by potential acquirers or family members who may be in line to take over the family business.

So, what’s there to do?

If owners should disappear from sales and operations, what should they do instead? The best way to answer this question is to think about the concept of a turnkey enterprise. While an owner’s involvement in day-to-day activity may be viewed as being detrimental to the business, his or her involvement in long-term, strategic areas is welcome. For a business to be sustainable and valuable, it must be well positioned in the market, high performing in its internal functions and well stocked with talented people. These are the best areas of the business for an owner to place his or her energy.

If you’re an owner, this article presents an opportunity for you to reflect on what areas of your business you may decide to disappear from. If you’re not an owner, consider passing along this article to someone who is. He or she will most certainly be grateful.