Why Business Owners Don’t Make Good Managers

July 9, 2014 | 7,830 views

Why Business Owners Don’t Make Good Managers

Why Business Owners Don’t Make Good Managers

If you’re a small business owner, you know what it’s like to wear multiple hats and juggle multiple tasks at the same time. Running a business requires managing everything from finding customers to making investment decisions to managing employees. All of these tasks require vastly different skills and, some would argue, different people to perform them, so it’s no wonder that so many business owners don’t make good managers.


Good Managers: as Rare as Unicorns

First, good managers are rare. A Gallup study found that only one in ten people possess all the traits of a good manager (as defined by their research). So not only are the odds stacked against a business owner being one of the 10%, it is unlikely anyone has everything it takes to be a stellar manager.


Different Objectives

Another reason owners don’t make good managers lies in the job descriptions. Owners are fundamentally different than managers – requiring different skill sets and having different objectives. Business owners might be like a CEO, setting a vision and strategy, leading others and providing them with what they need to succeed. Managers, on the other hand, align resources, living in the type of details that owners don’t have the time, or perhaps the inclination, to manage. Nor should they.


Small business owners are usually the face of their company, investing in relationships that will yield business, new sources of capital, partnerships and more. While effective management of employees is critical to the success of any business, the opportunity cost of a business owner’s time might just be too high and should be accounted for in hiring decisions.


Big Picture vs. Right Now

In addition, owners don’t have the luxury or being removed from the ever-present reality of a business’ bottom line. I have seen great managers in large organizations crumble under the pressure of running their own company, turning into tyrants without vision or strategic management. The pressure of ownership does not often allow one to manage for the long term when one is myopically focused on meeting the financial obligations of the now.


Lack of Interest

Other than a lack of time, perhaps the most prevalent reason I’ve seen for business owners making bad managers is that they are not interested. Owners start their business because they are passionate about something and saw an opportunity to grow an idea. That’s what they want to do. Owners don’t want to necessarily manage employee engagement or they might not have the skills to provide constructive criticism on a cross-channel marketing strategy. Yet owners are often expected to be an active participant in parts of the business that don’t inspire them, making for a disengaged manager even if they are a passionate owner.


Bad for Business

Finally, while a manager that is not performing may be fired in time, no one is going to fire the owner for poor decisions. Instead, teams watch as a company flounders, perhaps trying to rally enough momentum to overcome obstacles, but in the end, the owner has the ultimate trump card: “this is my business.” I’ve seen owners play this card to justify ignoring sound recommendations of advisors and the experience of their team to the detriment of the business.


Perhaps it’s time we all stop expecting one person to be all things to all people and instead, acknowledge that business owners can be great doing what they are good at so long as they have the team to fill in the blanks.

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