No One Knows My Business Better Than Me; That’s Why I Find It Difficult To Justify The Money Needed To Invest In A 2nd-In-Charge (Lesson 4)
You may have spent a lot of time as a sole leader. The loneliness of that position can be staggeringly tough at times, and despite this, the idea of sharing the responsibility can be as frightening as the loneliness is difficult. There are a number of reasons for this.
Primarily, you become an entrepreneur in an isolated manner. Rarely do people attempt it as a team, and if they do, the process generally chews them up and they go their separate ways. Having gone through the process as a singular entity, bringing someone else in and giving them the benefit of all your hard work seems like an unfair situation. After all, you have invested all that time, effort and money to get to where you are now. Why should someone else be able to walk in and enjoy the trappings?
In a lot of ways, bringing someone in who is going to have so much responsibility also opens the company up to be pretty vulnerable and I totally get that. This can be especially acute if you are bringing in someone who has vast experience in your sector. What if they want to rip up your processes? What if they try and change everything you do here?
Another absolutely key factor is that attributing dollar-productive value to an operational employee is very difficult, and small businesses can certainly be excused for struggling to see the value. Assigning a significant salary to someone who isn’t directly adding dollars to the balance sheet can sound like absolute madness, I know.
When addressing these issues, the first point I tend to make is that scaling a business requires a discipline and understanding that is often missing from an entrepreneurial mindset. Not only that, but it also requires a huge amount of time and energy that business leaders don’t have when they are busy bringing in sales, keeping pipelines full and looking after everything else besides.
The next point I often make, is that that while there is likely to be a non-immediate cost benefit to the hire, that situation typically changes pretty rapidly.
If you think about scaling a business, processes, KPIs and accountability systems—and management of those systems—it’s very easy to become wasteful. The right operations person eliminates the potential for waste by providing an efficient route to growth that not only ensures resources are used well from the outset but that they are also managed in a way that is most efficient for the business.
A great operations person makes everyone accountable in a system that is clearly outlined, so anyone could potentially come in and run the business. It’s a protective layer of organisation that provides both structure and insurance against adverse events.
When done properly, this same structure provides a direct route to improving the balance sheet, and that same process can then be scaled at pace to provide more revenue. All of a sudden, the wage for this operations manager becomes almost immaterial.
To give you an iconic example, Henry Ford employed a man by the name of James Couzens, who became his operational soul mate. Ford was a big picture thinker and the credit for automated assembly goes to him, but there was an operational element that often gets overlooked.
Couzens was the one who made that idea a reality and turned it into a working business. It was Couzens who made sure that the numbers were sound and that employees were accountable. He was the one who was on top of the numbers every day, week, month and year.
The big picture is great, but you need someone who can truly implement that vision.
Over the years I have worked with some incredible companies who were in really tough situations. I want to show you how finding the right person can help you correct the course of your business and lead to the success you deserve.