Platt Perspective on Business and Technology

Transitioning into senior management – Part 14: reporting to owners

Posted in job search and career development by Timothy Platt on July 6, 2011

This is my 14th posting in a series on joining and working as a member of a senior executive team (see Guide to Effective Job Search and Career Development, postings 158-170 for parts 1-13.) And I turn with this from discussion of working with and reporting to a board (see parts 10-13) to working with and reporting to owners.

I have to add up-front that what I write here reflects my own experience and that the relationships between owners and owners, and between owners and the managers they hire can be very complex – and they can be similar to or different from my particular experience. So my goal here is primarily one of prompting a reader to approach this situation with open eyes.

Owners have a very special and particular stake in a business that employees never really share. Here, I am not writing about the diffused ownership of stockholders, but of family –owned and of single owner businesses. And I start by raising some questions.

• Is this business owned by one individual, or by several?
• If several, are they related to each other in a family or are they simply business partners?
• Do they agree on the basic, core issues as to how the business should be run and on how revenue coming in would be folded back into the business or taken out as profits?
• Regardless of the numbers of owners involved or how they are or are not related to each other, how do they see their role in the day to day operations and management of the business? In other words, even if they hire a non-CEO CXO, or even a CEO do they step in to make the strategic decisions, or to second guess decisions already made? If so, what types of decision are most likely to face this type of owner-mandated intervention? Do they step in to second guess or override operational and day to day decisions made by their hired executives, and if so what types of decision are likely to face this type of owner-mandated intervention too?

My basic goal with these questions and for any related questions that might come to mind, is to prompt a reader who works with a business owner, to think through precisely what that relationship means. What is the context you work in and what are the constraints you work under simply by virtue of the fact that you report to one or more owners and with their sense of entitled control that they legitimately see themselves as holding?

To keep the phraseology easier to follow, I will simply cite “owner” as in singular in what follows, allowing for other variations of ownership as a given.

• Did the owner found and build this business? I have seen founding owners make the transition from day to day, fully hands-on management of this, their own business into a less involved participation where they bring in a manager to handle the day to day and operational sides of things – so they can slow down and even at least semi-retire. There is going to be a transition period for any change like that, and certainly where there might be a gray area between operations and day to day, and strategy where a more systematic change may be involved too. It is very hard to build a business from scratch and see it grow and thrive and see it as a life achievement – and then step back and turn it over to someone else, and even just its routine day to day decisions.
• Did the owner inherit this business, and if so did they in effect grow up in it or was it always simply out there and not a major part of their own work life and career?
• In either case, what are the owner’s long term plans for this business, and particularly if “long term” is not likely to mean “distant future?” Are they transitioning their business into a saleable enterprise that might be picked up on by another private party owner? Are they grooming and redirecting the business to make it a more attractive buy-out option by another business through a merger and acquisition process? Are they bringing in a professional manager to help maintain the business during an inter-generational ownership change, to insure the key operational and functional areas in support of the business are all covered to a high professional level of competence during a family transition?

I find myself thinking of one business I have worked with in particular as I write this. I worked there as a chief information officer, and this was a family owned business, with the family patriarch running it as president and CEO. But he needed and wanted functional area help in managing this business, so he had a chief financial officer and a chief information officer, and a trusted friend of the family general manager who served as second in command and chief operating officer. He also had trusted employees who he had known and worked with for a great many years, and they were dotted throughout the organization. Working effectively in this context meant stepping back to study and understand the dynamics of all this, learning who was related by history and trust to the owner and in what ways. And this was necessary to avoid the potential for blow-ups of the type you would get from carelessly wandering a mine field – an outsider and a new one would not necessarily see or know where relationships were strong and in ways that cut across the formal table of organization, but failure to acknowledge them could create real problems. This was quite a learning experience, and some of my lessons learned there have in fact helped to shape my approach to working with and within organizations in general.

Owners as individuals are all unique and do not fully fit into any one simple mold or pattern, or set of them. There can be and are points that owners hold in common, but the differences can and will make themselves known and they can be the deciding factors. If you work as an executive member of the team with an owner, keep that in mind and keep your eyes open, and your mind open to the unexpected too – and not just to the “non-business-like” practices, biases and assumptions that owners can and do bring to the table as their “how they do business” – which may in fact work for them and their businesses.

I am going to turn in my next series installment to the issues of leadership in a mergers and acquisitions context.

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