How To Divide Duties Of The Owner And The Director?

At what stage and how should you delegate part of the duties to a hired manager? And what is the difference in their approach to work?

Earlier or later, every business owner starts to think about hiring a director and turn operative management over to him. Some manage to do so, especially if company’s work method is not too complex in itself. But most of the owners in small to medium sized businesses can only dream about it – while day after day they still continue to handle strategic and operational targets.

Round and round

For most business owners, their business is like a “hamster wheel”. And in business, the faster you spin the wheel, the bigger it gets and the faster you need to run to be able to keep up with the speed. The way out of this “wheel” is to sort out what is actually happening and what is the direction you need to go. Because the wheel makes you move forward, but to get out of it you need to jump sideways.

And this exact “sideways jump” for the owner starts with gaining a clear understanding of what exactly he is supposed to be doing as an owner and what are the duties of a director, as well as the differences between these two jobs. At this point, I should clarify, that by “business owner” in this case I mean company’s founder, who usually works towards company development.

In a joint-stock corporation or companies, whose expansion is fuelled with investors’ money, such a person usually doesn’t even own the controlling stake. In small private companies, he is usually the only owner or at least a co-owner of a business. As long as he doesn’t know, what his actual role is and how it is different from the job of a director, he has no chances to stop running “round and round”.

The true role of a business owner is similar to the work of an architect. First of all, he studies the terrain in order to understand, how future building should look like. Then he creates a design, and after that he supervises the works to make sure that the ideas he put into the project are not altered. And the director is like a foreman: he manages builders, solves all operational matters, which will be plenty.

On one hand, they help each other; on the other hand, they have a covert conflict of interests because there are two different ways to solve problems. If something doesn’t go right, you can either shift away from the project and do it “the simple way” or work harder and do it “the right way”.

Stakes on experience

One my friend, owner of a restaurant network, created a rule: only mature people can be hired as waiters – there can be no students “in uniform” in his restaurants. As an architect of his business, he was completely aware of the fact, that there can be no restaurant without first-class waiters. And what kind of waiters can students be? For them, it is a temp job, they think of it as shameful and they constantly look for “something better”.  And really good service starts with people that are striving to serve their guests as best they can.

So it is almost impossible to make students deliver a very good service. For the director of a restaurant this rule is not easy to adhere to, as mature people need decent pay, and it is harder to hire them. So he gets tempted to “cut corners” and hire someone simpler. If you urgently need a waiter, no one wants to think about level of service, costs of staff turnover, expenses of double training and the headaches of managing student waiters.

If a rule is not described in official policy of the company and if there is no control, then it will be sacrificed to everyday operation – and sooner or later the company will pay for it.

Reward for courage

If an owner deals with both strategic and operative management, he usually doesn’t even dare to create rules, as he himself will be the one who will have to adhere to them, and he already has enough difficulties as it is. Or he is a good manager, but he can’t do the functions of the architect of a business.

By the way, this is why franchises are so popular – they let you “buy a system”. And of course, in that case you will have to share the profits with those, who have already developed it. Basically, the creator of a franchise is already doing the biggest part of the owner’s job.

Those, who won’t or can’t buy a franchise, will have to heavily work their own brains. As long as work system is not described on a paper and not implemented in actual operation, it is either entirely impossible to turn operational management over or it will bring unpredictable results. Who knows what a hired director will do with the company if you don’t show him his limits and rules right from the start?

So if it is necessary for you to delegate part of the duties, I recommend you to have patience and start with allocating time every week for development of rules that describe the system of your company’s work, all the while continuing to run operative management.

Of course, if you try to do that at your workplace, you will fail – routine will take up all of your attention, and operational matters will constantly distract you. So it would be better to schedule at least one “academic day” a week and find a quiet place where you can work. Then you will be able to start becoming an architect of your business: read books that describe the job of a business owner, write necessary politics, analyze data and plan.

At first, it is going to be hard and even scary – you are so used to the “hamster wheel” by now! But you don’t have any other choice; it is time to reach the next level in the game.