The Hidden Reason Owners Can’t Replace Themselves
Tom Stimson
January 13, 2023
A business owner considers a chalkboard business map to determine where he can delegate duties and step back from delivery.

What do business owners dream of?

In many a fairy tale version of owning a business, the owner has managers they can trust to take care of things. Owners can stick their nose in, but they don’t have to put their fingers in. In other words, check the dashboard, ask some smart questions, and set the next bar to jump over.

In this “Nose In, Fingers Out” scenario, the owner becomes a resource, not a stopgap. They’re not there to find and fix problems. They’re there to enjoy the fact that problems never manifested because they had the right systems, processes, and people in place.

Then what do they do? They go on vacation. They retire in place, or they exit completely.

An Industry of Accidental Entrepreneurs

Our industry is full of accidental entrepreneurs — and I don’t say that as a bad thing. Owners in this industry are special. Many of them were great at one aspect of the business, found themselves with more work than they could handle, and hired employees. Voilà! Entrepreneur.

Most didn’t wake up one day and say, “I want to form a live events business and put all the technology and vendors and parts and pieces together.”

Accidental entrepreneurship is a hallmark of our industry.

Contrast this with other industries. In landscaping, pest control, fast food — any business that can be franchised — you have an owner-operator who can quickly and easily replace themselves because the processes are already neatly packaged and franchisable.

In a franchise, someone buys a working business model and inserts themselves as the business owner. They see the franchise first as a business opportunity, not as an outlet for their industry skills. They don’t say, “I’m really good at landscaping. I think I’ll buy a landscaping franchise.”

In our industry — the production rental, live events, and event management biz — we all have something in common: we love doing shows. There’s something about the terror of doing a live show that keeps us coming back. So we build a business around that. Crazy, but true.

The accidental entrepreneur starts by bringing a particular show-related talent or skill to the business. But if they’re still on shows 20 years later, then they’re still integral to the delivery of the product, and it’s very hard to step away. As much as they want to, it feels like if they take their hands off the wheel for a second, the whole thing will crash.

So, how do you turn that business into something that someone else could run — someone who doesn’t have the exact same background you do?

The perfect scenario is when the accidental entrepreneur has learned to love other things in their business, and they replace themselves in the customer-facing, delivery aspects. Because the key to management is replacing yourself over and over and over again.

Owners have to replace themselves so that they become the source of knowledge rather than the source of delivery of the service.

Owner-Operator as Internal Subsidy

The model of the owner-operator being part of delivery is what gets us into the tenuous position of 1) not being a scalable business, and 2) the operation not being able to function successfully without the owner intervening.

If the success of the company depends completely upon the owner, that makes the owner a subsidy.

The company isn’t generating results. The owner is. An outsider looking in will value that company less because it’s not really a business that can operate on its own; it’s an individual who’s holding it all together.

This will often manifest as financial subsidies in the P&L. The owner “donates” their time or resources to the business in a way that artificially inflates operating profit, because they’re doing work for free.

It happens in other areas as well. The owner inserts their oversight in lieu of good processes — operational subsidy. They close deals that nobody else can close — sales subsidy.

The owner has become like (forgive me) the Borg Queen in Star Trek. They’re integrated into so many areas that they can’t extract themselves, and the collective can’t operate without them.

Infographic: ISL - 1/16/23

Delegate for Freedom and Success

If accidental entrepreneurs ever want a business that can run without their subsidies, they have to learn to delegate.

Every case is a little different, but a couple of consistent things often keep owners from delegating:

  • Not letting qualified managers shine and do their job
  • Not hiring qualified-enough managers who will take the work away from the owner

For me, an ideal manager in any department is going to say, “No, that’s my job. Here’s how we’re going to do it.” And they’re going to apply their expertise and experience to improve it.

Accidental entrepreneurs aren’t necessarily experts in business. So if, for example, they hire a finance guy who knows more about finances than they do, they’re wise to let the expert make financial decisions.

Another difficulty for owners is that they often have trouble expressing themselves — telling other people what they’re trying to do or what’s important to them. It’s easier to just do things themselves and sort out in their own brain what they want.

This is where coaching comes in and can make a big difference. Coaching is all about helping owners figure out what to do, and in what order. It helps them gain clarity. Coaching helps owners get out of their own way.

If you’ve been trying to extricate yourself from the delivery aspects of your business, but can’t quite seem to break free, give me a call. It’s time to end the subsidies and get your business standing on its own two feet.

About Tom Stimson
Tom Stimson MBA, CTS is an authority on business and strategy for small- to medium-sized companies. He is an expert on project-based selling and a thought leader for innovative business processes.
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