While engaging with established small and medium sized businesses, there is one issue that seems to be remarkably common: Owner-managers having to focus on the day to day running of the business to such an extent that thinking about managing and growing the business is neglected.

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Why is this problem so prevalent?

 

The challenge in recruiting good people and the current economic climate has led to as many costs as possible being stripped out of small businesses leading to a skeleton work force being run with an ‘all hands on deck’ approach to carrying out lower level duties or operational tasks. This approach inevitably results in the owner perceiving a necessity to themselves become embroiled in the day to day operational issues to ease the running of the business.  

 

This is at the risk of neglecting the overall strategy and their personal objectives.  It is all too easy for this inability to see the wood for the trees, to become a spiral from which it is challenging to escape.  This vicious circle can lead to the owner manager feeling in a ‘catch 22’; though aware that the tasks they are carrying out should be delegated, the seeming urgency of the situation means that delegation is not an option. It is highly likely that performance will start to suffer, hurting your business.

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The Inverted-U model (also known as the Yerkes-Dodson Law), was created by psychologists Robert Yerkes and John Dodson as long ago as 1908. Despite its age, it's a model that has stood the test of time.

 

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Potential net effect?

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These are just some of the detrimental effects of such a situation:

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• The strategic view of the business risks being de-prioritised or even lost

• Every day-to-day decision making depends on the owner manager.

• Employees feel less empowered with regard to decision making

• Employees reduced authority leads to a decline in job satisfaction levels

• The staff not only become, but also feel, less valued

• The company is distracted from fulfilling its growth potential

• There is no specific focus on growing your business

• The value of the business is not fully realised.

 

That the value of the business will not reach its full potential is the prevailing effect of such a situation.

 

When trying to exit and sell, the business’ consequent dependence on the owner manager’s knowledge and on the owner manager(s) as a resource within the business is infinitely less appealing to a prospective buyer.

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Stand back, review the situation and focus on managing and growing your business.

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Removing the business’ dependence on the owner manager(s) is key to allowing them to take time to stand back from the business, to review the strategy (and exit strategy) and consequently increase the asset value of the business.

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Whilst not having to channel all your energy into the day to day running, you, the owner manager are now free to focus on key issues that are an imperative to successfully managing your business and growing your business, such as:

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• The key numbers and accounts

• Sales Targets

• Marketing & opportunities

• Staffing and Resource management

• Processes

• The organisation

• Facilities

• The strategy and vision of the business – strategic planning

 

The owner manager can then get back on track with clear plans and personal objectives, enabling a less stressful, more effective role within a healthier business.

 

Stuck in the operational issues of the business? Neglecting the bigger picture? Very busy but going nowhere?