Have you ever wondered why some business owners/entrepreneurs seem to be able to start and grow businesses rapidly and others can’t? Or why some business owners/entrepreneurs seem to be able to lead their businesses and have a life whereas others can’t?
Well, one of the reasons why is because only a small set of business owners/entrepreneurs really get and own the idea that to grow their business, they have to become more of a CEO than an owner. Why?
If you’ve read any of my content for any length of time you can probably guess what I’m about to say. It’s because …
No business can consistently perform at a level beyond the capacity of their senior executive.
You are both the primary reason for your business’ success and its primary bottleneck. As the business owner/entrepreneur in charge (or managing partner), you have to learn to let go and build a team and a system that will do what you used to do. In essence, you have to learn to transition from being an owner of your business to being a CEO of your business.
But what does that mean? Well, let me give you six key differences between how CEOs think and how business owners think to help you make this transition.
1. See Your Business as External To You, Not an Extension of You
One of the more common beliefs you’ll hear from business owners these days is that the business they lead is an extension of themselves. This occurs for a number of reasons. For example, how many times have you heard someone talking about starting a business say, “Pursue your passion!” Exactly. Way too many times. The problem with this kind of thinking is that it causes the business owner to think that everything their business is and does represents them as a person (i.e. it’s rooted in their passion). How could it not be personal?
Another reason this occurs is because a business is like a baby. Those of us who’ve started companies all get this. We get an idea. We gestate it for a period of time. And then we give birth to it as it’s launched into the world. And just like any other parent, we view that “child” as ours. It’s our baby. We gave it life. It’s an extension of us.
Likewise, because of all the sweat equity (hours and hours of time poured into it) and actual financial commitments to this “child” we’ve made, it’s easy to see this business as an extension of us. Not only have we given it birth, we’ve nursed it and trained it and fed it, etc.
However, all of those issues actually get in the way of us growing our businesses into maturity—something no CEO ever has to deal with. Why? Because CEOs always see the business as something that’s external to them.
Now, to be honest, it’s usually easier for a CEO to think this way because most CEOs come late to the party. They’re rarely the founder so they didn’t go through the birthing process (though, some do). But even those who do know that a business is an idea, not an extension of themselves.
So, how are you doing? Do you see your business as an extension of you (your passions, your ideas, your efforts, your child)? Or do you see your business as something external to you?
2. Realize the Money in Your Business is the Business’, Not Yours
This is a classic extension of the first principle. I’m continually shocked at how many business owners see the finances of the business they lead as “their” finances and treat them as such. They try to “run everything through the business” that they can. Can you imagine a CEO doing that? No way.
Another classic example of how a business owner thinks about the money in the business is when they’re confronted with an opportunity and they evaluate it against something personal for them. For example, “I can either send Bob to this conference for $3,000 or I can put braces on my daughter. Which should I do?”
Anytime you find yourself evaluating a business expense vs. a personal expense, you know you’re thinking like a business owner who sees the business as an extension of themselves.
On the other hand, if you can separate the two and see the revenue and expenses of the business as separate from your personal expenses, then you’re thinking like a CEO.
CEOs get paid a salary and then a bonus. They’re not evaluating how much they can “draw” out that month.
So, how are you doing with difference number two?
3. Remove Yourself From Everything Possible
Most business owners want to be at the center of everything. They like control. They like knowing everything that’s going on in their business. And I totally get that. As a control-freak, I love being engaged in everything. I love both the big picture and the little picture. I love knowing all the details of everything.
However, that’s a recipe for slow growth. If you need to be engaged in everything or give approval for everything, you will be the bottleneck and everything will be slowed down. To grow faster, you have to remove yourself from everything possible.
Back in my old pastoral days, I used to create a list every year of what I was going to give up doing. It’s one of the reasons we were able to grow at 32.5% per year for over a decade. Why? Because even though I was the founder, I knew I had to keep giving up control over more and more things.
CEOs get that. They don’t want to be at the center of everything. They want to hire well, delegate well and trust their people and systems to get the job done. That gives them the bandwidth to focus on the more important issues, which leads to difference number 4.
But first, how are you doing at removing yourself from everything possible? And what are you going to give up this year?
4. Focus on the Big Picture, Not the Day-to-Day
Another classic business owner mistake is to be “working in the business, not on it” (a la Michael Gerber of E-myth fame). Probably the biggest complaint I hear from business owners is, “I just don’t have time to work on the big picture strategic issues.” Exactly. Why? Because they’re thinking like a business owner and not a CEO.
CEOs know that their number one responsibility is to see the future. Their job is to chart the path and then rally a team around them to complete that preferred future.
However, it’s now the middle of February when I’m writing this and I still know plenty of business owners who haven’t completed their plan for this year. Over 10% of the year is gone and they still don’t have a plan. Why? Because they’re stuck in the day-to-day operations of their business.
On the other hand, when you start seeing your role as more of a CEO role where you’re focused on the future and not the day-to-day operations, you’ll easily find time to work on what matters most (which will be a result of taking care of number three above).
So, how are you doing? Are you more focused on the day-to-day in your business or the big picture/future of your business?
5. Empower People to Make Decisions vs. Make Them
Hopefully, you’re beginning to see a pattern unfold here. Most business owners want to make all the decisions—especially all of the big decisions. But frequently, even some of the small ones.
I remember years ago being in a large church when they probably had about 1,500 people attending. The senior pastor took a call during our meeting because his secretary told him it was urgent. What was the urgency? One of his staff members wanted approval to buy … an extra gallon of paint. Amazing! Note: I’m sure that’s no longer the case.
Whenever you or I want to make all the decisions, we become the bottleneck. But to grow a fast growth company (and have a life) we have to get out of the decision-making business and into the empowering others to make decisions business.
CEOs don’t want to be the decision maker for everything. They want to be out building relationships, raising capital, recruiting team players, developing strategy, etc. They can’t do that if that have to be “around the office” to make all of the decisions.
The key here is to train your people in how to make wise decisions, give them parameters (and checks and balances) and then entrust them to make the right decisions. And the good news is that when you do this, you get your life back. In fact, you can be gone on vacation for two weeks in Tuscany and never be needed. How cool is that?
So, how are you doing? Do you need to make all of the decisions? Or have you empowered your people to make all the decisions?
6. Manage More By Metrics and Reports Than By Gut or Like
If you were to evaluate the average managerial ability of most of the business owners you know, what letter grade would you give them? Most of the business owners I’ve met are at a C level or below. And one of the reasons why is because they not only dislike managing employees, they do it poorly.
For example, they often “manage” based on their gut. If they “feel” that they need to attend to something, they do. If they don’t, they don’t. If they “feel” someone is underperforming (or over performing) then they believe that person is (whether that’s true or not in reality). If they “feel” everything is “good” then it is (whether or not it is in reality). Everything is gut or feeling driven.
Another common problem is that they tend to manage based on who they like. If they like someone, they manage that person very easily (basically, do whatever you want). If they don’t like someone, then they manage that person very toughly (e.g. constantly inspect that person’s work or give that person undesirable tasks).
On the other hand, CEOs don’t manage either of those ways. Good CEOs manage based on metrics and reports. They want data. Gut and instinct are good, but they’re not always right. That’s why CEOs love metrics and data. They affirm or challenge what they, the CEO, believe to be true.” Is Joey a good employee or not?” It has nothing to do with gut or like-ability. The question is, “Did Joey deliver the results he was supposed to achieve in his position or not?”
So how are you doing? Are you more gut and like driven as a manager? Or more metrics and report driven?
If you want to build a more scalable and successful business, then you’ll want to make the shift to leading more like a CEO than an owner. And to do that, you’ll want to follow each of these six CEO guidelines.
- See your business as external to you, not an extension of you
- Realize that the money in the business is the business’, not yours
- Remove yourself from everything possible
- Focus on the big picture, not the day-to-day
- Empower your people to make decisions vs. make them yourself
- Manage more by metrics and report than by gut or like
If you do these six things on a consistent basis, you’ll be shocked at the results. Okay, you’ll actually enjoy them.
To your accelerated success!