As a business owner, are you a CEO, Chairperson or Shareholder?
As a business owner or entrepreneur, you know that you find yourself wearing many hats every day.
Sometimes you’re customer service, other times, your finance or marketing, and a lot of the times, you’re management and sales. It’s just the nature of running your own enterprise.
But what if I told you that, as a business owner, you actually have three main roles that sit above these general operation tasks? They are:
And what if I also told you that the majority of people naturally become entrenched in only one which neglects the other two, preventing their business from growing? Not to mention, causing a lot of stress and frustration in the process.
You can probably guess where most business owners spend a lot of their time.
Let me explain what I mean and how you can get the balance right.
The three critical roles of a business owner
When you own a business, you’re the leader.
This means that, by default, you assume the roles of CEO, Chairperson and Shareholder. That is until you eventually outsource any of these roles – but it takes a while to get to that point. So, in the meantime, you have to balance all of them equally, as they’re all equally important.
Let’s start by defining them.
- The CEO
As the owner of your business, you’re the Chief Executive Officer (CEO), responsible for making all managerial decisions. This is the day-to-day hustler, keeping the business operational.
You’ve probably already suspected that this is where you spend so much of your time: making the business run, managing your team, making on-the-fly decisions, putting out fires, providing instructions, setting goals and so on. It’s natural to spend the majority of your days in this role as you have no choice. If you don’t call the shots and take the lead, then your business will fall apart. The CEO is also where you feel most comfortable because it’s the role that got you this far – and you should be proud of this.
But what about the other two roles?
- The Chairperson
Think of the Chairperson role as a neutral third-party who objectively monitors the CEO’s decisions, achievements and track record. In other words, they hold the CEO accountable without getting directly involved in their responsibilities.
You can see the difficulty here. As you have assumed both roles, it’s hard to mutually run the business and also assess how well you run it. However, that’s exactly what you have to do.
The Chairperson role is actually critical to play as a business owner. That’s because it allows you to gain more perspective over the effectiveness of your CEO decisions by lifting you out of the day-to-day and instead, see how the business is tracking and where it is headed.
For instance, one question I always ask business owners is this: if you were to completely separate yourself from your CEO role, and look at it objectively, would you endorse, question or even fire you? Is your CEO acting in the best interests of the business, both in the short and longer-term?
This is just something to think over when you’re in the mindset of the Chairperson.
- The Shareholder
Last but definitely not least, is the Shareholder. Because shareholders are technically owners, they reap the benefits of a business’ success in the form of profits and dividends. Conversely, if the business declines, their share value drops and they lose money too.
So, in other words, the Shareholder is interested in the monetary value of the business – both its profitability and its ability to fetch a strong sale price in the future.
You may be thinking, “well of course I care about the financials behind the business”. But a Shareholder thinks one step further. The Shareholder looks more at the return on the investment of resources, such as time, money and labour and what the value of it all is. As business owners, we often neglect thinking about the true cost vs return ratio and even the end game of selling the business. That’s how we end up with the default “I want to just do better than last year” mentality, which can hold you and the organisation back.
So, don’t forget to take the time to think like a Shareholder too.
How do you balance all three?
You can see how important each role is and why it’s crucial to allocate time to play all three at different times.
Spending too much time as just the CEO means you’re operating, but it’s short-term focussed and tends to be responsive rather than proactive. It’s hard to grow your business when you’re always in CEO-mode, getting bogged down in small projects, client work and wearing multiple hats.
If you’re an aspirational business owner looking to reach your organisation’s (and your own) full potential, you need to spend time in the other two roles, too.
Of course, it’s easier said than done. It’s hard to switch, especially as you’ve probably been in the CEO role for so long.
I use this metaphor to explain it to business owners: you naturally drive to work and park in the CEO car spot. You do your day to day tasks and you leave. But you need to allocate days where you drive to work and park in the Chairperson and Shareholder spot, too. On those days, it’s important to act accordingly and spend time looking at the CEO’s role to guide the operations towards an overarching goal as the Chair, and monitoring the value-making capabilities as the Shareholder.
How I can help you find your balance
Do you want to work out how to be the perfect CEO, Chairperson and Shareholder for your business? I can help.
As a Business Coach and Mentor, I work with business owners like yourself to provide clarity around your goals and guide you on the right path towards achieving them.
Whether you want help breaking out of the constant CEO cycle or you want to learn how to adopt the other roles, I’m here by your side.
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