When I got out of the Army in late 2013, I thought I could conquer the world.
I had spent just under 14 years in military service (to include 4 years at West Point, 24 months in Afghanistan, and over 30 months of really hard military schools), and I believed I could do anything and be successful.
So when the CEO of my holding company asked if I wanted to run a small manufacturing subsidiary in Indiana, not even a year after my separation from the Army, I graciously accepted. I fully intended to do a really great job there and start my civilian professional career with a bang!
But as I mentioned in some of my previous articles, it was not as easy as I believed. Simply put, I wasn’t ready for the responsibility and made A LOT OF mistakes.
For context, what I mean by a small businesses are the types of portfolio companies that some Private Equity firms are interested in purchasing. They are typically comprised of 30-60 people, have had a track record of increasing profitability, and have typically $5M-$20M in sales ($500K-2M EBITDA). I am not referring to a side-project business, like a t-shirt printing business or dropshipping.
Four big takeways when assuming the owner-operator status:
1. It’s all about YOUR Leadership.
Someone once said, “Change + Uncertainty = Chaos.” As the new owner-operator of the company, people will be sizing you up and checking you out. How will you fare as the new leader of this family business? Will they still have jobs?
Remember that your employees will have had significant years with the company, doing whatever job they’ve gotten accustomed to do. And most people don’t want change. Uncertainty will certainly lead to chaos.
As the incoming owner-operator and Leader, you must ensure everyone that stability and means gain their trust. If you don’t have particular experience in the industry, it may be tough to “lead” at first.
Ensure you ask questions and observe how things have used to be. Before impressing everyone of your revolutionary new ideas to increase sales 10x, seek first to understand the current culture (almost a year!), then share your vision to be understood.
2. You are your company’s Chief Salesman, Marketer, and Customer Service Rep.
Be prepared to talk to customers. You are the lynchpin to how they perceive your company especially through this transition.
Yes, they’ll know you’re not the previous founder/owner but that you are now responsible for the entire business. And that means your products and services to them. If something does not happen, in terms of meeting their expectations or delivery, they will go directly to you.
As the new owner-operator, you must learn about your products and services, and what value you provide to your current customers. Get smart, quick! All eyes will be on you.
Be proactive of your customer engagement; you should never be eating lunch by yourself in your office! Customers love that the leader of a company is at their service, ready to take care of their needs.
3. Focus on the relationships, both internal and external.
As you are engaged in consistent, proactive relationship-building with your customers, don’t forget to do the same with your internal customers -- your team.
People will only trust someone they will learn to know and respect. This is built through conversations, transparency, and relationships. Get to know your people and their relationships with each other. Understand the culture and motivations.
There will no doubt be odd processes and procedures you will discover. Don’t rush to make changes ASAP! Just as we were taught in Leadership 101, it’s best to allow others to come up with their own solutions for change.
In the end, your employees and team will only work as hard as they believe in you. Learn their passions, strengths and weaknesses, and if you can continue to trust them to be a part of the team.
4. You don’t know what you don’t know. Prioritize ruthlessly!
Yes, you will not know it all. You’re most likely going to assume a company that the owner has started 30-some-odd years ago. He knows it all, down to every equipment purchased and what employee has drama with others.
In most of these organizations, they are centered around the founder and her involvement. Since you won’t immediately learn it all, focus on what’s most important (people and customers) and find others to help. Seek outside help if in need, like an executive coach!
Whether internal or trusted consultants who can handle operational efficiencies or cost cutting, prioritize your efforts to what you can impact the most. As others gain more of your trust and confidence, place them as important contributors/decision-makers for your processes.
MilSpec Capital is a boutique headhunting firm that connects High-Impact Veterans to our client companies in various industries. Our Veterans typically have 5-15 years of private sector experience, in addition to their successful track record of Leadership.