Not long ago I was speaking to a good friend of mine Don Dalrymple about micro businesses and some of the inherent and common problems that are not acknowledged. Suffice to say that there are too many to list here but the one that seems to be among the chief issues appears to be “people problems”.
Forget about the #PeopleProblems hashtags on social media. Yes, some of those are funny and timely but there is a more urgent nature to that topic.
Let’s approach this a bit more rationally. Let’s define “micro business”. I see a “Micro Business or MB” as a business that has grown to a $1M – $10M revenue. It has a small team of employees or sub-contractors that attend to delivering services and products. It has systems and procedures combined with some elementary quality assurance procedures that enables it to deliver goods and services at a “OK level”.
So what is the problem you ask? The answer is simple: growth and scaling. MB is likely to be agile and adaptive, fast moving and inherently more nimble than its counterparts. Yet those advantages are usually overshadowed by lack of the ability to grow the bottom line via scaling. There are many factors that contribute to lack of scaling ability however the most obvious reason is people and the respective problems with people: i.e. People Problems. People problems are usually and inherently a natural part of managing people.
Large and enterprise businesses have been dealing with it for many years.That is where you see concepts such as Human Resource Management, Human Capital Management, Knowledge Management, wellness programs, etc. Those are ways large businesses have been trying to deal with people and the inherent people problems.
So what about MB? How does a micro business deal with the same issues without the same resources? Well, it doesn’t or if it does it is on a limited scale with debatable results. Are there exceptions? Yes of course there are exceptions. As in anything in business there are those that can and are doing it all successfully. That is where you see those MB’s grow and scale. Yet that is not the norm – it is the exception.
In traditional MB when they hit those revenue bench marks a few things tend to happen: they struggle either internally or externally with adding new clients and maintain the same quality, taking short cuts to circumvent quality assurance measures in order to keep up with the work load, make rush judgements in hiring, overworking team members, losing track of customer satisfaction, tuning out or minimizing internal debates, etc. The list is too long to mention here however you get the gist of it. They stop being a coherent team and grow into disorganization and chaos (again there are certainly exceptions).
I think of the above as “People Problems” and how they relate to a MB. A MB has products and services, it has systems and procedures as well as a track record of being able to successfully service clients; however, it can’t grow past a certain revenue. So how do you address that? There is no right or wrong answer but rather just preferences.
Some businesses opt to address people problems by hiring contractors so the burden falls on another business entity. Others opt to invest into training and mentorship, yet others bring in short term consultants adhoc to address particular issues. All of those can and will have results however not addressing the fundamental and the underlying cause: inherent human nature. Of course there isn’t a magic bullet to handle it all either. It needs to be understood that most of those people issues are not “one offs” nor “temporary”. Those are persistent because those issues are human.
Here is where I suggest that a Chief Operating Officer is ideal. The issue with having a COO is usually a question of the attitude of the business owner and available resources:
Business Owner: this is the biggest issue. Most small business owners don’t feel as they need someone to attend to their daily operations. I have heard it many times, “It is my business; no one can run it like I can”, “It is insulting that you would suggest that you can run my business … I built it from ground up”.
You get the gist of it. It is a combination of the need to be “in charge” and the pain to have to admit that people management does not come naturally. It doesn’t matter if you are managing dozen or a few hundred people the principals stay the same. Team members have to be managed, inspired, motivated and yes …… encouraged. The need to be “in charge” is equally flawed. It is inherent that the business owner is in charge. The need to be “the boss” and / or “problem solver” only interferes with the actual running of the business. The average working day can be effectively used to generate business and attend to maintaining clients however there is very little time for the business owner to attend to daily operational matters. Hence doing so interferes with both and results in meager outcome on both fronts.
Resources: MB has inherently limited resources that need to be strategically deployed to the greatest benefit of the organization. Having a full blown COO is usually not an option. Its cost and work load both would not be justifiable. So what is the alternative? A eCOO (e Chief Operating Officer) Or Remote COO which would both address the workload and resource expenditure.
No, the above is not an infomercial for my services. There are many qualified COOs that offer such services. I am not that special nor do I suggest that I would do a better job than anyone else. I ,however, believe that this need has not been articulated nor acknowledged.
Small business owners have been made to believe that an entrepreneur / small business owner has to have a bookkeeper, an accountant, a lawyer yet never an operations person or eCOO that attends to his/ her daily operational and people issues.
If nothing else this piece should serve as thought provoking fodder for all trying to grow a business.