On October 27, 2009

The Many Hats of the Business Owner

Most of the small business owners I work with start our Mastery coaching programs aptly referring to themselves as the owner of the business and “Chief Hat Wearer.” For solopreneurs, 3-person operations, and mid-size companies, the story is much the same:

I’m the President/CEO, the CFO, the Sales Manager… and occasionally the Receptionist. I fill the roles in the company that need to be filled. I wear all the hats. I do it all!

Most business owners will inevitably wear multiple hats and fill different roles within the business at one time or another. Even if a business has many employees, the business owner may have to fill in at some point in the event of an employee’s absence or dismissal. And for those business owners who have no employees, for the solopreneurs out there, all the work of the business rests on your shoulders.

With these business owner clients, the first thing we work on is an understanding – a 360-degree view of how the business ideally should work. The most successful business owners are those who understand these two important factors:

All the work that will need to be done for the business to thrive and grow.
All the positions that will need to be filled in the business to accomplish that work

Understanding these factors opens the door to an efficient and organized business. You recognize that either you have to get clear about which “hat” you’ll be wearing at any given time, or you have to create the positions and find the right people to fill the positions of the business so that they can do the work for you.

But few business owners actually understand their business enough to work this out on their own. This is when having an E-Myth Business Coach can really have an impact on your business. It’s our job to help you take that critical step back to understand all the work that needs to be done for the business to thrive and grow. And for those people that aren’t able to bring on employees, you have to fill different positions, have to wear all the hats that need to be worn and you have to learn how to effectively switch from one hat to another. It’s not always easy to do without some guidance.

And this is why most business owners live with disorganization, discontent and dissatisfaction… because the work of the business is confused and unstructured. Are they the company President/CEO, the VP of Marketing, the Receptionist, or all of the above? Moreover, does their business need a VP of Marketing or simply a Sales Rep? How can they manage others while trying to run the business? How can they even manage themselves? They find themselves working on 10 different things at once, their results are inconsistent, they often overlook important things, and they rarely accomplish all of their priorities. Perhaps worst of all, they end up working way too hard to simply get through the day and are not able to actually move the business forward.

So, what can be done about this? How can you, the business owner, ensure that all the work of the business is done right, and how can you fill several different positions within the business (wear several different hats) effectively?

The first step is to get clear on the work that needs to be done for the business to succeed.

The Work of a Business that Works

All businesses that thrive and grow to maturity must take into consideration both the tactical and strategic work that will be required. The tactical work is what happens in the business day-to-day and involves, for example, the actual delivery of products and services to customers, or the actual performance of administrative duties, etc. But the strategic work is what shapes the tactical work; it is the work that is done ON the business and involves things like planning, forecasting, and working out the most effective ways to do the necessary work of the business. The strategic work shapes the business processes and provides the purpose behind every action that is taken, and it is the kind of work that is most often overlooked and neglected in small business.

Every business will need to have positions that are accountable for doing either the strategic work ON the business, the tactical work IN the business, or a combination of the two.

Organize the Work of Your Business

In order to be successful, business owners must find a way to put the work of their business into context so that they truly understand the business and all the things that need to happen in order for it to work the way it is supposed to. At E-Myth Worldwide, we help our clients do this by leading them through the process of developing an Organizational Strategy. If you are a business owner who has struggled with trying to figure out what hats to wear or how to wear several different hats in your business effectively, there is a proven path that can lead you to greater clarity, organization and effectiveness:

Get in touch with your Primary Aim in life, what you want your life to look and feel like on a daily basis. This will help you envision a business that can truly serve your life instead of a business that will dominate it!

Affirm your Strategic Objective for your business, and be sure you have a clear picture of what your business has to become and how it has to operate to serve you and everyone else it touches. This will help define the work that will need to be done.

Create an Organizational Chart for your business that reflects all the positions that will be needed to accomplish the necessary work of the business if it is to achieve the Strategic Objective. Think of your business as a corporation, regardless of whether it is actually a corporation or is a partnership or sole-proprietorship, because that allows you to be more objective and design the chart around the necessary positions rather than personalities. Be sure to account for the positions that will be accountable for the strategic work as well as the tactical work. This should clarify all the different hats that need to be worn in the business.

Create Position Agreements for each position in your business. Be sure to specify the results, the work, and the standards each person who occupies that position will be held accountable for. These documents indicate not only the strategic purpose of each position but also the specific systems that will need to be documented and placed in that position’s operations manual. This should clarify exactly what needs to be done when this “hat” is being worn.

Create Operations Manuals for each position in the business, so that all the most important work accountabilities for each position have a documented system that describes precisely what to do and how to do it. This helps clarify how to actually do the work no matter what different hat you may be wearing.

An example of how developing an organizational strategy can benefit you and your business is illustrated in the tremendous transformation that took place in the business of a client who recently graduated from our Mastery Impact!® program. Jack is a commercial contractor whose business was in serious trouble when he decided to come to E-Myth for business coaching. He was struggling to be the leader of his business, manage the finances, and manage his employees. On top of those accountabilities he was constantly being pulled into the business to fight fires such as complications on the job sites, problems with scheduling jobs, employee absenteeism, etc.

Here’s how Jack described this transformative process:

I was running around like a madman trying to do everything at once. I was acting like a technician too much of the time and not really being the strategic leader of the business. I realized that I needed to start from scratch with the way I was going to organize the business to achieve my strategic objective, and by following the E-Myth processes I literally created order out of chaos.

What helped the most was just getting clear about and simplifying what needed to be done each day in the business, what positions were responsible for doing the work, managing the work, and creating the work. I still have to wear many hats, but now I’m clear about the work I should be doing and have systems to guide me no matter what hat I’m wearing.

The best part is that I know if my business keeps growing I have a blueprint for working myself out of the business, or at least to the point where I can focus 99% of my time on the strategic work as company President. My managers manage, and my technicians perform, and life is good.

What Jack did, anyone can do. E-Myth can show you how.

Share Your Story

Do you feel like you’re wearing “too many hats”? Or maybe you found a way to work through that dilemma? Post a comment and tell us about it. We love to hear your stories.

Flickr photo credit: robyn-gallagher