November 12, 2007
Whose in control here? The danger of co-owners, managing together..
Posted by Donald Todrin under Blogroll, building profitable business orgs., business development, business turnarounds, business workouts, solving difficult business problems, start-ups | Tags: co-ownership, husband and wife as co-owners, management organizational plan, mutually agreable, partnership relationships, shared decision making |There are many bad habits that frequently evolve out of partnership relationships in the business environment. One of the worst however is the issue of shared decision making.
Another aspect of this unsucessful strategy is the frequently usurped decision making authority, done when convenient. Both management styles must be identified and routed out as they will surely lead to disaster.
I see it in two specific situations, first when a husband and wife team or any co-owners decide to run a business as co-owners, together, as co-presidents, co- CEO’s or co anything, even co-signatures on the check book, its all very dangerous.
Second, when two equal partners run a business, with clearer organizational boundries with either one jumping their boundaries and usurping authority by making a random decision outside of their prescribed organizational authority, because they are a partner and can do that.
Here is what happens, because of the concept of co-ownership, or shared leadership, there is this sense of equal empowerment, after all she is a half owner, co-CEO and the wife, or partner, so she can jump in and make whatever decision she may feel is appropriate at the moment.
Another aspect of this are the endless discussions trying to reach a mutually agreeable conclusion, which because of different views may force compromise which waters down the right decision into something inappropriate for the issue as well as it taking far too long. Additionaly this is usually far too public and everyone can see there is no clear leadership and no clear decision making and thus the company is run by adhoc committee meetings to work out a simple decision that two people see differently… Ouch.
This leads to inconsistent management, inconsistent orders, changing directions mid stream, and confused order of communications, leaving employees in a quandary as to what to do and who to follow, so they do nothing or worse yet play one boss off against the other, making certain nothing productive gets accomplished.
Simply stated this must not be allowed to happen, there can never be a co-owner in a co-leadership position under any circumstances as it will not and cannot ever work, especially if there is an outside relationship such as a marital one or an ownership relationship, there always needs to be a clear definition of who is in charge, who makes what decisions regarding what areas of responsibility. There cannot ever be two authority figures equal and available both armed and dangerous, both spewing out commands. This will not and cannot ever work.
The solutions are obvious although implementation is sometimes extremely difficult. Despite partnership relationships or ownership sharing, the organizational lines must be clearly established and intensely respected. A usurping of authority or co-decision making cannot be allowed. It will not and cannot work successfully and will only cause a breakdown in leadership and a destruction of the business process. This must be avoided at all costs and routed out firmly and immediately if and when it ever occurs.
There can be only one manager of the business or any particular division of the company and his word must be law.
There can and should be manager meetings during which differences of opinion can be explored but in the end the lead managers decision is holy and must be respected at all times.
This also sets the stage for a divide and conquer action by mischievous employees who would exploit this management weakness for their own self perceived benefits. It further creates competition for control of the decision making process and wrecks havoc with the company.
It goes back to effectively designing the management organizational plan and committing to it, thus each partner must have a clearly defined position, and work within the boundaries of their job description, deferring to the other managers who are responsible for other decisions in other areas of the business.
If its happening, stop it immediately. If your in the planning stages do not allow this to happen, as it is surely a mistake.