“These Execs haven’t got a clue”
I recently heard this comment twice within just a few days; firstly from a liquidator who was sorting through the mess of a business that had gone under and then from an executive who bought into a small business, who by his own admission was struggling to keep up with the pace of small business.
Executives are paid to oversee their one core skillset — this is ultimately their only function in business operations. The result is they do not understand how the rest of the organisation works and therefore do not understand the financial impact each sector has on the entirety of the business.
The moral is all that glitters is not gold.
To be clear, Executives have an important role in business and in many cases a high-level skill set is required for the day to day operations of large companies — however when you apply this same methodology to a small, ever adapting and market driven business this formula no longer works.
In large organisations, queries regarding the output of single departments often lead to high level internal politics where Executives are forced to justify their decisions and their role within the greater organisation — however they are still only able to provide this view from the silo of their own department.
Executives in large companies are often able to rely on the power of their organisation’s brand to justify their achievements rather than through their own experiences or results — while many SME owners want to build to a place where their brand speaks for them, the reality is that every day they play multiple roles within their business and achieve results through action, not standing.
When Executives offer their managerial expertise to a small to medium sized business owners, while it can be from a place of knowledge, it is often not from a place of experience.
Knowing how to structure a business is one thing, having the experience to do it on your own something completely different.
If you tell a SME owner to hire an IT specialist, a COO or an ‘executive’ level position most will turn to you and say “Bloody hell, I’m not BHP, I can’t afford to pay executives, I need people on the floor producing”.
What most Executive’s do not understand is that small business owners and their often very dedicated workforce are multi-disciplined and deeply passionate about the success of the business. There is no demarcation of duties and everyone chips in when the business needs to achieve a goal.
There is a very simple formula to growing any small business — you identify growth areas, you hire to maximise production and sales within these areas, and then you invest in marketing to continue growth. However, although the formula is simple, the execution is not. Who creates email addresses? Who manages payroll? Who’s doing timesheets and rosters?
Who? That would be you. The small business owner.
These are trials and tribulations that only a select few can understand — the people that have built their businesses out of passion, and kept them going through nothing more than grit and determination. While knowledge cannot replace experience, experience does not necessarily replace knowledge.
Find a balance, make the best decisions for your business and get advice from people you trust, not who have the most impressive resumés.
While knowledge cannot replace experience, experience does not necessarily replace knowledge.
If you are a business owner and wish to discuss your plans for growth and truly understand how things works through your experiences then please contact me for a no obligation coffee on (08) 7226 2142 or email on admin@jonasassociates.com.au
This article provides general advice only. Many of the comments in this publication are general in nature and anyone intending to apply the information to practical circumstances should seek professional advice to independently verify their interpretation and the information’s applicability to their particular circumstances.
