Published: March 02, 2009
Benevolent Dictators Are More Effective Small Business Leaders
Expert Says "Benevolent Dictators" Are More Effective Small Business Leaders
Whether its recession time or boom time, small business owners should look at the way they operate in order to maximize their revenues. Many small businesses are run a little loosely; because many owners believe they lack the overhead and the staff to require a lot of strict policies and procedures.
That's a mistake, according to Jim Muehlhausen, CPA and author of The 51 Fatal Business Errors and How To Avoid Them, from Emerald Publishing (www.51errors.com).
"Every business owner is enrolled in the world's most expensive business school: The School of Hard Knocks," Muehlhausen said. "Instead of acquiring business knowledge the slow and expensive way, business owners need to capitalize on the hard-fought lessons of others. That's why benevolent dictators are the best small business leaders, because ruling by committee against that landscape rarely works."
Small Business face more challenges than the large corporations with huge cash reserves to help them through financial crises. They are more susceptible to market fluctuations, have fewer clients to support them and generally have more transient staff. On the flip side, they also make up 70 percent of the businesses in the U.S., so as goes small business, so goes the economy.
In order to swim with the big fish without getting eaten, Muehlhausen suggests that small business owners get a little tougher and smarter to survive the nasty water.
"There are several practices that are considered standard operating procedure that actually work against small business owners," Muehlhausen said. "First, many insist on learning hard lessons themselves rather than learn from the mistakes of their competitors. To compound the problem, they also tend to hire employees away from their competitors without realizing that chances are that the employee may be leaving because they had been fired, or they are about to be fired. In essence, they wind up with their competitors' rejects, who they wind up firing soon after."
Muehlhausen also stresses that CEOs need to be benevolent dictators to be more effective.
"Managing employees is a lot like parenting," he said. "Employees may not like what you do, but you'll have to do it, anyway. Many CEOs are afraid to be authoritarian, but they should do it, anyway. They should remember two things - first, being authoritarian does not mean you can't be nice, and second, it's the CEO's name on the big door. No one else will be blamed for the failure of staff. An autocrat is not automatically a jerk, and businesses aren't a democracy. Hire good people, listen to input, but after you've listened, call the play and make sure you have a team on board who's going to execute it."
Jim Muehlhausen CPA, JD has had articles feature in numerous publications including Businessweek.com, Entrepreneur, Inc., Indianapolis Business Journal, The Small Business Report, Undercar Digest, Digitrends and NAICC Legal Journal. Jim graduated from Valparaiso University with a B.S. in Accounting, passing the CPA exam while still in college. While subsequently attending the Indiana University School of Law, he became the youngest franchisee in Meineke Discount Muffler history (1987-1991). After successfully selling that business, Jim founded an automotive aftermarket manufacturing concern. During his 9-year tenure, the company achieved recognition from Michael Porter of the Harvard Business School and Inc. Magazine in the IC 100 Fastest Growing Businesses. Over the past eight years, Jim has personally coached hundreds of business owners in more than 3,500 face-to-face coaching sessions and has clients in North America, Europe, Asia, and the Middle East.
Search News
