Business Owner or Hat Rack?
As an entrepreneur, business owner or manager, how many hats do you wear? Dave McClure, Master of 500 Hats, “refers to the many hats that entrepreneurs have to wear as they get a new startup venture off the ground. It’s also a reminder to entrepreneurs to spend time identifying all those hats, find talented people to wear them productively, and gradually take off & transfer the hats to others who can best help the business grow. “
As a small business owner, I’ve worn more than my share of hats. I mentioned in my last post that I’ve been the project manager, programmer, designer, account manager, marketing manager, and so on. Chris Garrett pointed out that by starting my own blog, I’ve just given myself ten more hats to worry about. Now I’m writing, researching, networking, etc. in addition to all the things I’m already doing. It occurred to me that I’m spending more time as a hat rack than as a business owner. A business owner should be negotiating deals, formulating strategies. A hat rack keeps hats from falling on the ground, getting trampled and lost.
Sadly, for most entrepreneurs this is a necessary evil. If I’d had the cash for a professional accountant, I would have hired one. God knows I’m clueless when it comes to accounting. Matt Inglot points out in his blog that the areas we struggle in tend to be the hats we spend the least time wearing. That explains why, before we hired an accountant, our accounting hats only showed up once a year in early April.
You can learn a lot about yourself by looking at the way you solve problems like drooping sales. A tech-savvy owner might put his programming hat on and implement a cutting-edge CRM application to better track leads and customer information. A marketer will put his marketing hat on and find new ways to reach customers or new target markets to enter. The engineer will reach for his inventor’s hat and start working on his next big idea, guaranteed to draw crowds of customers. Which hat do you reach for? A true entrepreneur will consider each hat in turn, weighing his options until he comes up with the best combination of hats for the task at hand.
Unloading a Few Hats
The hardest thing for most business owners to do is let someone else wear a few hats. In The E-Myth Revisited: Why Most Small Businesses Don’t Work and What to Do About It, Michael Gerber outlines some of the dangers of taking this step. By hiring people to do the jobs I hate, I’m ensuring that they get the attention they deserve. But to whose standards? Not mine. I’m just trusting that the new guy knows what he’s doing. And then when he cooks the books and disappears with all of my money, who do I have to blame?
The critical component in effectively delegating tasks is learning how to handle each task yourself, THEN deciding how to delegate. You’re in charge. You have to set the rules.
Start by creating an Organizational Chart. It may seem ridiculous in a company with one to three employees, but this is critical. Take a look at my company’s first org chart. Initially, all of those boxes were filled with just two names.
Once you have the chart, create a position contract and job description for each box. For each position, what are the expectations? As VP of Marketing, what are my responsibilities? How do I know I’m fulfilling them? Who do I report to? Who reports to me? This should all be clearly defined when there are only a few employees, because it will get much harder the larger the company gets.
You should now have an Organizational Chart and a stack of position contracts. For each box that has your name on it, sign the position contract to seal the deal. This is especially important in partnerships, where responsibilities are not clearly defined. There’s got to be some accountability right from the start.
As you grow, you now have the structure to hire employees and present them with clearly defined roles. Each new employee takes one of your hats, and signs a contract indicating that they understand what is expected of them. This is just a small step forward, but it’s a step most small businesses never take. Once you start hiring, you need to worry about training, communication, record keeping, and all sorts of other things well beyond the scope of this post. More on all that later…
Your turn… what hats are you wearing? What hat do you instinctively reach for when there’s work to be done?
Other Bloggers on The E-Myth
Naomi at IttyBiz wrote a (not surprisingly) great post last week about how to make the jump toward starting a business when you hate your current job. Johnathan posted a number of statistics from the book over at WiseVisions. Marc Melvin presents a great summary of the goal behind The E-Myth: creating a “place of community that has purpose, order, and meaning… A place where the generally disorganized thinking that pervades our culture becomes organized and clearly focused on a specific worthwhile result.” Michael Gerber’s blog is definitely worth checking out too. Pick up a copy of The E-Myth, it’ll be worth your while.
What an inspiration! Go Kyle Go! Buckets and buckets of blessings on your...
Nicely done. Maybe the better question is “What hats am I NOT wearing?” When you run a small business you are most often wearing them all, at least to an extent. I feel like the hat juggler at the circus, using my hands, my head and my feet to keep all the hats from hitting the ground.
Juggle Defined: To keep (two or more objects) in the air at one time by alternately tossing and catching them.
The analogy fits as we juggle multiple responsibilities. Invariably, in any circus I’ve been to, the juggler drops a hat now and then, sometimes several times. That’s how I often feel when I really get buried, and it’s usually my own fault because of the hat(s) I prefer wearing.
Like you I hate accounting, so that gets left to the end. I love creating, writing and doing sales. Those hats I never drop, but I’ll often spend more time in those areas than I should. The trick is finding the balance, and being disciplined enough to maintain it.
Speaking of balance, I’d better go. I’ve got some accounting to do…
March 12th, 2008 at 3:05 am
Hi Kyle –
I almost skipped the section with the org chart because I don’t intend to hire employees. So glad I didn’t pass it by:
Although my intent is to automate as much of my business as possible—leveraging technological resources instead of human ones—an org chart with contracts like you described is still an incredibly useful tool.
I imagine following your steps to create feature requirements rather than (or in addition to) job descriptions for the roles. From exploring and documenting the many hats, I can approach service vendors with a detailed and prioritized list of specific tasks I need their application to manage.
This is far better than just choosing the vendor with the larger featureset. They could offer the sun and moon, yet lack one feature I really need.
Buckets of thanks for your inspiring idea,
Crystal
March 18th, 2008 at 6:56 pm
Crystal,
Awesome point about picking application vendors. That’s yet another benefit to defining your business using tools like the Org. Chart. What we found was that it very clearly pointed out the hats that we didn’t like to wear. We drew out the chart with all the different positions and responsibilities, then picked the roles that we had each been filling. My partner and I quickly realized there were some jobs neither of us liked or wanted. We realized these were potential weak spots in the business and divided them up so that we could each focus on a couple. Hopefully our business is better and stronger as a result.
Thanks again for the comments,
Kyle
March 21st, 2008 at 1:29 am
Reading your comment about Partner Charting, another use for your org chart came to mind: divvying up household chores with my husb.
There are a number of tasks that keep falling through the cracks. I bet if we charted them out as you described, we’d find they are chores we both dislike…
March 27th, 2008 at 6:20 am