Is Your Company Ready for Absentee Ownership? 20 Key Elements
- Absent is not Really “Absent” – Understand that being an Absentee Owner is not truly “absent”, but instead you are the air traffic controller that is essential to keep the business driving in the right direction, lead management and prevent any major disasters.
- Hire the Right Manager/Management Team – You have the right people in the right seats. You need a management team that is highly competent and talented in all aspects of management…specifically decision making, planning, time management, communication and accountability.
- Set Expectations – Set the expectations with your management team long before you start to become absent about how
- Transparent Numbers – Be transparent with all of your company numbers so you can talk about and check up on things freely
- Incentive Programs – Have an Incentive program setup for your management team that ties the results of the company goals (such as revenue, profitability, client attrition rate, etc.) to a commission or profit sharing with the management team
- KPI’s – Have Key Performance Indicators (KPI’s) that are true leading indicators that you and your leadership team review regularly. You should have a collection that you review weekly and some monthly.
- Leadership Operational Structure – Have structure for how you will lead your Management team and continue to communicate with them about the company vision, key numbers, company goals and department goals. Your leadership structure will include your accountability and oversight of the business.
- Company Culture – Be sure your management team are capable and actively spreading your company culture.
- Effective Communication – You have a practice of open communication with your management team where everything can be discussed without hurt feelings, without people feeling like they need to bury or hide their mistakes. Company “issues” and the plans for their solution should be discussed as a part of your regular structure.
- Budgets – Your management staff is going to need to make decisions that may take some money, so instead of watching transactions piece by piece you will need to set budgets for your team.
- Financial Plan – Have a financial plan where the management team has access to the funds that they need to make necessary purchases within their budgets, but you have qualified oversight. This oversight is likely you, or an accountant that is acting as a CFO.
- Core Values – Your company core values should be identified and known by all in your company, and all of your people must live the core values or they do not fit the organization.
- On–Site meetings – Plan to have onsite meetings at minimum quarterly.
- Financial Stability – The company should have stability delivering a consistent profit, never have a cash crunch that threatens payroll cash, etc., before you step away.
- Company Savings – Before you step away you should have a little nest egg of savings in case of emergency, and contribute to the savings weekly.
- Red Flags – When red flags appear, be ready to intervene with a measured response, immediately. Absentee Ownership means you get to live the life as an absentee, BUT you are ready to drop everything at a moment’s notice if you need to.
- Company Culture – Be sure your management team are capable and actively spreading your company culture.
- Your High Level Territory – Identify the high level departments that you will handle. For example, company vision, insurance, leases, major contracts, large liability issues, etc.
- Provide Vacation Relief – Your top Manager will need to go on vacation, and if you do not have other layers of management to step in, you will need to plan to be the acting manager while they are gone…so vacations need to be coordinated.
- Test Run – You have a manager or management team that handles full responsibilities for at least 3 months. No micro-management. If you can’t resist the urge to micro-manage, listen to that inner voice and know the company is not ready for you to leave.
Tags:Absentee Ownership
