Owning versus Managing: What’s the Difference?

Do you own the business or do you manage the business?*

A senior member of the board of trustees of a high-rise building walked into its administration office and asked the accountant there to order parts for a diesel generator set.  The senior board member believed that the generator needed a minor repair and not only does he tell the accountant to buy parts, he also tells the building technicians to do the repair the coming weekend.  At no time does he talk to the building manager or the engineer both of whom were at the office. 

The building manager didn’t agree with the board member.  She made that clear in a previous board meeting where the senior member as well as the president and other board trustees were present.  The building manager felt that an outside contractor, with special expertise in generator sets, should diagnose and repair the building’s diesel generator.  It shouldn’t be entrusted to the building’s technicians who themselves said they were not qualified to do the job. 

The senior board member didn’t care for the building manager’s opinion and didn’t bother to talk to the engineer.  When asked why, the senior board member said the technicians agreed to do the job and the engineer didn’t seem to be interested. 

We can easily see that the board member was wrong for pushing ahead with a job that is the responsibility of the manager.  But this kind of thing happens a lot not just in buildings but in businesses.  Owners hire managers but take it upon themselves to micro-manage daily activities.  

Owners would insist on being part of every daily decision, from approving every petty cash disbursement to studying every project, big or small.  Managers end up paralysed; they won’t move until the owners tell them what to do. 

Thus, the question to enterprise owners: are you there to own the business or manage the business

Managing the business is about planning, organising, directing, and controlling the enterprise’s day-to-day activities and projects.  It’s about supervising people, procuring resources, budgeting & accounting, and compliance to rules & regulations.  Managers make sure goals are met and strategies executed. 

Owners set the standards and peg the objectives of the enterprise they have stakes in.  They monitor the performance of the enterprise in which management delivers and reports.  They listen to management’s recommendations on issues such as budgets, plans, projects, and strategies.  It is the owners who decide via their boards or executive committees whether plans push through or not and how much resources will be planned, procured, and given.   And of course, it is the owners who hire and fire the managers. 

Both managers and owners share the same common interest:  make the enterprise prosper.   Each just have different roles.  But because we are human in which we each have our own opinions, owners sometimes cross the line and interfere with management. 

There is nothing wrong when owners complain when they notice employees come in late for work or when they question why customers aren’t receiving their orders quickly.  There is nothing wrong when owners suggest ideas to managers whether it be for process improvement or for a new gadget. 

It becomes wrong when owners push managers on how to address a complaint or how to adopt whatever idea or suggestion is raised.  Managers are there to figure out how to do things.  Owners are there to see how managers perform. 

Managers represent the owners when they deal with clients, vendors, contractors, community, and government.  Managers therefore should make sure their decisions and policies are in line with the owners’ standards and objectives. 

Owners lead.  Managers execute.  Owners set the destinations; managers map the routes.  Owners approve the strategies; managers act on them. 

There should be no overlap.  No crossing over.  Owners should know their place as much as managers should too.  If owners want to manage, then they should assume the position but be ready for the consequences, one of which is organisational paralysis. 

*Thank you to Mr. Jovy Jader of Prosults for coining the question and inspiring this blog. 

About Overtimers Anonymous

Published by Ellery

Since I started blogging in 2019, I've written personal insights about supply chains, operations management, & industrial engineering. I have also delved in topics that cover how we deal with people, property, and service providers. My mission is to boost productivity via offering solutions and ideas. If you like what I write or disagree with what I say, feel free to like, dislike, comment, or if you have a lengthy discourse, email me at ellery_l@yahoo.com ; I'm also on LinkedIn: linkedin.com/in/ellery-samuel-lim-40b528b

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