What is the Owner's Job?, Part 2

The question is, “What’s the job of the person running the business?” In our last installment, we focused on the primary duty – to make and meet all budgets. In addition, we said they also are responsible for reporting on their progress of meeting the budgets to the stakeholders. Okay, you may ask, but how does that relate to print shop tasks such as writing up jobs, waiting on customers and ordering supplies? Well, it doesn’t because that’s not the job of the general manager. Huh?

We must organize around functions – not people. In our size shops, the job of the general manager is not a full time job – even after you read all the things I am going to list. Rather, the job is a part-time effort even at the two and three million dollar level. So, the general manager also accepts other additional duties and that is where the details of writing up jobs and waiting on customers are considered.

The General Manager’s Other Job

Each and every day we need to get jobs out (production), get jobs in (sales) and get paid (finance). Each of these is a separate and distinct function. The general manager’s job is not to specifically do these tasks, but assure that they are done. Now, the general manager also MUST fill an additional role of their choosing at the next level of organization – but it can’t be finance.

Why must the general manager fulfill an additional role? There isn’t enough real work for a person to do all day as general manager.

Why can’t the additional duty be finance? The tasks of finance in our businesses are the tasks of a bookkeeper. Bookkeeping is vital, but it is not a line function. There is a reason that the chief of staff at the hospital is a doctor – not an administrator. There is a reason that the commander of a flying unit is a flyer – not a supply officer. There is a reason that the person running the business needs to be involved with the real business of the business. The reason is leadership. The reason is morale. The reason is you can’t drive a car by sitting in the passenger seat reading a map.

Someone is saying, “Yes, but the CEO of General Motors doesn’t know how to build cars!” Pish-posh. The CEO of General Motors knows a LOT about building cars. Anyway, we’re not General Motors. They have the financial strength but we don’t. If you have put yourself in the position of being Ray of Ray’s Plumbing then you’d better know about plumbing otherwise you will be forever hostage to skilled workers. But, again, that’s another article. So, the general manager should oversee and know about finance, but not run the business from the position of bookkeeper.

The general manager’s other role must be at the next level of organization – production manager or sales manager. The general manager can’t report to someone who is reporting to them.

I have seen general managers try to operate their business from the position of salesperson. The general manager (and owner) told us that he was continually peeved at his old boss for not providing him the time and price that he needed to be competitive – so he started his own shop. Now he just promises whatever time and whatever price the customer wants and demands his print shop meet the commitment.

Organizationally, he was general manager and he had a production manager. He even had a sales manager to manage him! So, in his job as salesperson, he reported to the sales manager who reported back to him as general manager. Sound like a circle? It was. It’s also a way for this person to avoid the real responsibilities of running a business. Instead, this owner sold without impediments – promised whatever time and a whenever delivery. Did it work? Nope. He wasn’t making any money this way and couldn’t figure out why.

This is not to say that a general manager should not be involved in sales. We highly recommend it. In many instances we have the part-time general manager also taking on the part-time role as sales manager and the mostly full-time role of salesperson. You just can’t have circular reporting relationships where the sales manager reports to the general manager and the general manager acting as salesperson reports to the sales manager.

Another popular hiding place for owners is the function of estimator. Most use the “force” method. You know – “Let the force be with you.” Some people ascribe something magical to estimating – like it’s the Holy Grail of printing. It’s not. Estimating is nothing more than applying a price. Granted, some calculations are harder than others because of job complexities (a booklet as opposed to a flat sheet). But it’s still applying a price, which is trainable.

Estimating is a function of production management. Production management is essentially being asked how much it will cost to produce a job (please estimate how much it will cost, etc.). It is the selling function that should put the actual price or market value on the estimate. Since this is not practical to vary this from job to job in most cases, management then devises a price per function – or a price list if you will – based on cost but also taking into consideration market values. Most of what we call estimating is not estimating; rather it’s applying the price to the job.

Now many poor printers get wrapped up in this “estimating” role. They spend hours and hours estimating – ciphering if you will. And always the price they end up with is less than the price list that was previously established. After all, we need to have a lower price in order to get the job. So, we compensate by cutting back on the other end of the equation – the amount of time estimated to complete the job. And, if it actually takes more time than estimated – well, we’re back to the spoiled salesperson position only that this time we are talking estimator. This is particularly difficult when the general manager-estimator knows little about performing the real job being estimated. We usually compensate or augment in these cases by focusing on negotiation training, but again this is another article.

Now, again this doesn’t mean the general manager can’t estimate. Important is you must prevent circular reporting or the estimator (you) reporting to the production manager who reports to the general manager (you). It is permissible for the part time general manager to be production manager (full time) and a part-time estimator, of course.

So, the general manager of the business must be involved with the real work of the business at the highest level and that is either production or sales – you may choose one or the other, but not both. Why not both? Our purpose in “getting organized” is to separate tasks into separate jobs. If we are general manager, finance officer, production manager and sales manager, then we are not organized; we’re just doing everything ourselves.

Now let us add the duties of discipline and oversight to this list of functions of the general manager.

Discipline and Oversight

Discipline – the way I use it – is defined as doing what is most important not what is most fun. This begins with the self-discipline of the general manager. From there the general manager is responsible for the organization’s discipline – assuring everyone else also does what is most important not what’s most fun.

If we had a real corporate job, there would be parts of it that we didn’t like. For some people it’s accounting and the details of understanding where they are. For others it’s selling or dealing with people – one family told us that pop was okay as long as we kept him from three kinds of people: workers; customers; and vendors.

If we are going to drive the car then we are responsible for getting jobs out, getting jobs in and getting paid plus everything that those tasks entail. Sure, we are better at some tasks than others and sure we like to do some but not others. But our business is not simply a refuge for adults who don’t want to do what they don’t want to do. Severe damage is done to our business and family when this attitude is taken.

Yes, we can hire others to assist us with these tasks – even ones we don’t like. But that does not relieve the responsibility of the general manager to assure these tasks are done and participate in their completion. As Michael Gerber said in his book, “The E Myth Revisited,” delegation is not abdication. So we are responsible to assure that we – along with everyone else – gets jobs out, gets jobs in and gets paid each and every day we drive the car.

Where does this breakdown? A father hires a son who previously was a salesperson for a large corporation to be a salesperson in the printing company. The son, after doing the job for three weeks, announces that he doesn’t want to do that anymore – he doesn’t like it – rather he would like to be the graphic designer. As you can guess, the son then goes about doing graphic design work and the sales function goes vacant. That’s organizing around people, not functions.

In another case, a spouse chooses the role of salesperson but doesn’t make sales calls. In another, a spouse chooses the role of financial officer but lacks the details of getting the financials prepared. A son is a salesman but doesn’t do the job because their jobs aren’t getting out of the shop. Result, the son stays inside to shepherd his jobs through while others do the same. This is all because the person who is supposed to do production management doesn’t do it.

It is even more common to see the person who is supposed to be driving the car actually playing with their computer in the trunk – or contemplating the navels of other printers online.

One general manager told us they do a lot of quotes because no one else is trained to do them. They check on the status of “their” jobs because there is no production manager doing it. They talk on the telephone with customers a lot because deadlines aren’t met. Of course, we have to do a lot of reading about the state of the industry and participate in trade associations – neither of which is bad unless it is at the expense of the final invoicing not being done for two months during a period where sales are down 25%. He had hired a CSR to help out but she had been there three months and had received no training – and complained that she couldn’t find enough things to do to keep busy.

Much of this is due to the lack of discipline on the part of the general manager and the failure to organize around functions. The job of the general manager is to make and meet all budgets – and to maintain the organizational discipline. Or, in short, to do what is most important not what is most fun and make sure everyone else does it as well.

That means the production manager makes and meets customer commitments, the sales manager creates demand for existing capacity and the finance manager manages cash.

Let’s review. What’s the general manager’s job? To make and meet all budgets, report to stakeholders on the progress of the business, and to maintain organizational discipline and oversight. Additionally, this is a part-time position that must be filled with someone accepting one of the two leadership functions one level down – production or sales management. Next article, I’ll add to this list.